QUESTION: My wife and I are 46 are considering retiring next year. We estimate we'll qualify for combined Social Security payments of about $17,000 when we reach age 62 if we stop working, and we currently have about $350,000 in IRAs and $1.1 million in other investments. We hope to buy a $350,000 house by using $150,000 in savings and taking out a $200,000 mortgage. Based on our lifestyle, we figure we need about $65,000 a year to live on. What do think - is early retirement possible or is this a pipe dream?

—B. H., Rockville, Maryland

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I don't know that I'd say your plan is a total pipe dream. But if by retire you mean stop working completely and rely solely on your investments and Social Security when it kicks in, I'd say you're probably cutting it kind of close, and that you could give yourself a nice margin of comfort by hanging in for a few more years.

Here's my thinking. You say you need about $65,000 a year to live on, but keep in mind that if you want to retain your purchasing power in the face of rising prices, you're going have to make inflation adjustments each year.

Generally, for each dollar of inflation-adjusted income you want to draw from your investment portfolio, you should probably have about $25 in assets.

That rule of thumb, however, assumes you want a high probability of your money lasting 30 or so years. If you retire at 47, you're probably talking 40 to 50 years in retirement, which means you're going to need more than $1.6 million, or considerably more than you currently have.

I realize that Social Security will pick up some of the slack. But that won't happen for 15 years. And in the meantime, you're going to be drawing on that portfolio.

I also wonder if you've factored in the cost of medical care and health insurance. You won't qualify for Medicare until you're 65, so you'll need some sort of coverage in the meantime.

And have you factored in your new mortgage payment - plus insurance, property taxes and maintenance - into that $65,000 you estimate you can live on?

You've got a lot of moving parts here. If I were you, I'd consider sitting down with an adviser who has access to a good retirement-planning software package and can run a variety of scenarios for you. For example, see how your plan will fare at different rates of return on your portfolio, at different rates of inflation and different levels of spending.

If I were you, I'd also consider working at least part-time - or perhaps you and your spouse could alternate part-time gigs. The extra income would mean you could draw less from your investment portfolio and maybe you could get health benefits at a more affordable cost as well. An adviser should be able to factor part-time income into the various scenarios as well. (You can find financial planners in your area who specialize in retirement planning at the Web site of the Financial Planning Association.

Of course, this sort of analysis can't tell you with 100 percent certainty whether your plan will work. But it can give you a sense of your odds of success, and how those odds change if you fine tune your plan a bit - say, working a few more years or working part-time after you retire or invest more aggressively, or do all these things and perhaps more.

Who knows, maybe you're a lot closer to your early retirement dream than you think. Or maybe you can achieve a compromise version of the dream that's just as acceptable.

But the only way you'll know for sure whether this is a pipe dream or a dream you can turn into reality is to run the numbers.

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