(MONEY Magazine) – WHAT'S YOUR NUMBER--how much money do you need to retire on? The conventional wisdom is that you'll need 70% to 75% of your pre-retirement income to maintain your standard of living after you stop working. So if you now make $100,000 a year, you'd need $70,000 to $75,000 to get by in retirement. That certainly sounds reasonable. Where things get scary, though, is when you start figuring out how much it takes to generate that kind of income year after year. If you want $75,000 the first year and plan to increase that amount each year in line with inflation--and you want to play it completely safe--you'll need $1.9 million in today's dollars.

The reality, however, is that your true number can vary enormously. Choices you make today and after you leave work will determine the actual amount you need. We all know retirees who live comfortably on far less than they spent when they were working but still enjoy a rich life. The aunt and uncle who sold their sprawling five-bedroom house on two acres and moved to a condo because they didn't need as much space. Or the neighbor who, once he no longer had to drive 50 miles to and from work every day, stopped buying a new car every four years. Now he makes do with a classic Mercedes sedan that has 100,000 miles on it and still travels in style.

Moreover, conserving money in retirement isn't just about cutbacks that you tolerate grudgingly. You'll have a huge intangible asset that you may not even recognize now--and that's time. Often you can spend time instead of money, and if you're doing something you like, that trade-off can be a pleasure, not a compromise. Take a professional cooking class, and you'll be able to entertain your friends far more cheaply than you could at the latest hot restaurant. And you may find that you savor the experience as much as the food.

In short, treat 75% as a starting point. You can fairly easily reduce your annual spending--possibly well below that conventional figure--without necessarily lowering your quality of life. But before you can figure out where you have room to maneuver, it helps to understand what's behind the standard 75% assumption.

THE EASY CUTS

One reason it's assumed you'll be able to live well on less is that you'll face lower taxes. In part, that's simply because you will have less income. And once you're not collecting wages, you no longer have to pay Social Security and Medicare taxes. Beyond that predictable subtraction, your exact tax savings will vary depending on the source of your income in retirement. Withdrawals from 401(k)s are typically fully taxable, while long-term capital gains and dividends on stocks are generally taxed at only 15%, and Roth IRA income is entirely tax-free. So if you trade a paycheck for a dividend check, you'll pay less in taxes.

The biggest single factor, though, is something you might overlook. After you retire, you no longer have to keep saving for retirement. Whatever you were saving, be it 5% or 15% of your income, is now that much less you have to earn.

Finally, the standard formula takes into account that housing costs are typically lower for retirees. The averages cover a broad variety of scenarios, however, from paying off a mortgage to trading down to a less expensive house. You'll also probably spend less on clothes and commuting.

On the other side of the ledger, your health-care costs will likely increase during retirement, and that added cost burden is factored in as well (to see how the formula could work for a typical retiree, see the box above).

THE SECOND ROUND

Since the 75% figure is a total generalization, you may well be able to live on even less. In the gatefold that follows, you'll find a game board that lays out other ways to cut your retirement spending target, as well as a few reasons you might have to raise it. The board is split into four sections. Start playing at Money. The decision about when to retire and whether to work part time has a huge impact on your savings target, as does your willingness to be flexible with how much you earn and spend in any given year. Then move to Family. Do you plan to die broke, or leave an inheritance? Pay for your grandkids' college, or have your son pick up your golf tab? Depending on the answers, you'll need more or less money.

Next up comes Home. Your choices about where you live, where you vacation and whether you pay off your house can greatly alter the amount of money you need. Finally, think about certain Lifestyle questions, from how often you'll travel to what your health-care expenses might be. You may enjoy taking a pricey vacation each year, but could you give it up for a year or two if you had to conserve capital?

KEEP PLAYING

Once you end up with an income you can live on each year, you may want to convert that to a lump-sum savings target. A simple way to do that is to first subtract Social Security and any pension income. Then multiply the result by 25. (That formula assumes you follow the standard advice to spend only 4% of your investment portfolio the first year, and increase the dollar amount each year after that to keep pace with inflation.) So if you finish the game with a $60,000 target income and expect $20,000 from Social Security and a pension, your goal would be a cool $1 million.

When you finish the game, you may discover that you still have a daunting savings goal. Don't despair. Life is always unpredictable, and you'll adjust to whatever comes along. Same goes for retirement. The path isn't always clear, you have lots of choices to make at each turn, and there's more than one way to play the game.

Open the gatefold to play

Cut That Number!

THE CLASSIC FORMULA

You've no doubt heard the conventional wisdom that to be comfortable in retirement you'll need 70% to 75% of what you made when you were working. But you may not know what's behind that number. Here's how a typical retiree could get to 75%.

INCOME WHILE WORKING $100,000

SAVINGS

LOWER INCOME TAXES -$6,000

NO SOCIAL SECURITY/MEDICARE TAXES -$7,290

NO MORE SAVING FOR RETIREMENT -$10,000

LOWER HOUSING COSTS -$3,710

(because you paid off a mortgage, say)

LOWER DAILY EXPENSES -$2,000

(no more commuting or work clothes)

ADDITIONS

HIGHER HEALTH-CARE COSTS +$4,000

INCOME NEEDED IN RETIREMENT $75,000

SOURCE: MONEY estimates based on Aon Consulting research.

How to Score:

To see if you can live on less than 75% of your pre-retirement income, total up the number of moneybags you saved and subtract the number you spent.

If on balance you saved...

• 15 moneybags or more, you might be able to get by on 60%.

• 10 to 15 moneybags, you might be able to get by on 65%.

• 5 to 10 moneybags, you might be able to get by on 70%.

• Fewer than 5 moneybags, 75% remains your best guide.

If you spent moneybags ...

• You'll need something closer to your current income.

[THE FOLLOWING DESCRIPTIVE TEXT APPEARS WITHIN A DIAGRAM]

START

Cut That Number!

HOW TO PLAY: Start above and move clockwise, looking for squares that apply to you. Keep a tally of the moneybags you "save" minus the ones you "spend." Then check "How to Score" to see the impact on your target retirement income.

MONEY

FAMILY

HOME

LIFESTYLE

DON'T QUIT YET!

• Delay retirement by three years. That could pad your 401(k) by the equivalent of six to nine months' salary.

Save 4

GO PART TIME.

• As an accountant (or copy editor or nurse), you can easily find temporary work after age 60. You're lucky: While lots of people think they'll work in retirement, only 27% actually do.

Save 6

HIT THE ROAD.

• Your company downsizes, and you take a severance package and early retirement.

Spend 4

WHAT INFLATION?

• You figure you'll spend less in your seventies than you did in your sixties. So your income won't have to rise fully with prices.

Save 4

YOUR HOBBY PAYS.

• You collect and trade classic cameras, a pastime that's worth $10,000 a year in income now that you have time to indulge it.

Save 3

FIRE THE GARDENER.

• Buy a $1,300 riding mower and do your own lawn. Buy a $20 home repair guide and lose the handyman's phone number.

Save 1

DIE RICH.

• You want to leave your children as large an estate as possible. Limit your annual spending to 4% of your principal.

Spend 8

DIE BROKE.

• You don't believe in inherited wealth. Remind your children that less than 2% of people inherit more than $100,000.

Save 4

OOPS, SCHOOL AGAIN.

• Your divorced daughter wants to enter a seminary. Three years' tuition: $37,000.

Spend 1

THE KIDS ARE ALL RIGHT

• Reap the rewards of raising prosperous children. Your kids give you their three-year-old Volvo station wagon when they buy a new one. Value: $16,260.

Save 1

YOUR GRANDKID'S A GENIUS!

• A decade from now, four years at Harvard will likely cost more than $325,000. You want to chip in.

Spend 2

SANDWICH-GENERATION BLUES.

• Your mom moves into a nursing home. The typical cost tops $70,000 a year. You want to help.

Spend 6

PAY OFF THE HOUSE.

• On a 30-year fixed-rate mortgage at 6%, you'd save $7,200 a year for each $100,000 of principal.

Save 4

GOOD-BYE CITY LIFE!

• Relocate to a smaller town. Living costs in Chapel Hill, N.C., for example, are at least 33% cheaper than in Boston or San Francisco.

Save 6

DOWNSIZE THIS!

• Sell your four-bedroom colonial in Leesburg, Va. and buy a two-bedroom condo in Falls Church. Invest the $250,000 of equity you free up.

Save 4

MOOCH OFF THE KIDS.

• Your children buy a five-bedroom vacation home near the beach. They let you use it when you want.

Save 1

THE KIDS MOOCH OFF YOU.

• Buy a vacation home near the beach. Even in affordable areas like the Texas Gulf Coast, you can easily pay $400,000.

Spend 2

THE KIDS DON'T WANT YOUR HOUSE.

• Get a reverse mortgage. An FHA-insured home-equity conversion loan pays about $550 a month for $200,000 of equity.

Save 2

I FEEL GOOD.

• Your health is excellent, and your parents lived to 95. Buy a Medigap insurance plan with the highest possible deductible and save $2,200 a year.

Save 1

GENETIC LOTTERY LOSER.

• Your family has a history of chronic illness. Buy a comprehensive long-term-care policy for $3,000 a year.

Spend 2

JOIN THE JET SET.

• Finally, you have time to travel first class. Sign up for Yale's London Theatre week in March, including six shows ($7,000 for two, plus air fare).

Spend 2

MAJOR IN TAPAS.

• Complete a cooking course. Your new set of Wüsthof knives cost you $999, but entertaining at home pares your restaurant bills by $5,000 a year.

Save 2

BE A TIGER YEAR ROUND.

• Joining a private golf club in Arizona or Florida, where you now spend the winter, starts at around $3,000 a year for a family.

Spend 2

LIVE CHEAPLY.

• Take advantage of public concerts, free days at museums, etc.--and fill out your social life by volunteering with a charity.

Save 2