Last week I offered some ideas on how to think about wealth in different ways. While I was fairly adamant that income does not equal wealth, I didn’t touch on how much financial wealth is required for a comfortable retirement relative to your specific needs.

In part 2 this week, I’ll address that question.  “How much wealth is enough?”

Typically, this is a question we ask our financial advisors – “How much wealth do I/we need to be financially independent, and only work when I/we choose to?”

There are many industry guidelines that we can use as benchmarks to see where we stand.  Fidelity recommends having wealth equal to “10 times your final salary at age 67.” The 4% ‘withdrawal rule’ suggests having enough wealth so that you can cover your spending in retirement by withdrawing 4% of your portfolio annually, and a recent article in Barron’s suggested having saved 25 times your annual anticipated spending in retirement (i.e. if you expect to have monthly spending needs on average of $12,000 in retirement, you should have wealth of $12,000 x 12 months x 25 = $3.6 million).

But wealth is a matter of perspective. For example, whether you have $7 or $10 in your pocket right now, it probably won’t change your spending today.

Similarly, whether you have a $7 million or $10 million net worth probably won’t change how you lead your life, except perhaps influencing your decisions about philanthropy and estate planning.

But what if the difference is $700,000 or $1 million? That might determine whether you take an earlier retirement or continue to work. At $700,000, you might be notably more cautious about spending, while $1 million could offer more of a cushion and greater peace of mind.

My wife and I are approaching the “what’s enough” quandary in several ways. As empty-nesters, we continue to work and to add to the coffers, while still enjoying life without being extravagant. We also work with a fee-based financial planner to plot out various retirement scenarios to help us manage our financial risks.

In the coming years, we hope to practice what I preach and begin a phased approach to retirement by gradually reducing the amount of time we devote to working. For now, we’re relatively healthy, and fingers crossed, this will continue and we’ll be comfortable waiting to claim Social Security, thereby reaping higher monthly payments.

So, do your math homework, but also think about your own needs and wants and perspective on your finances.

I’ll close with an often-told story that I think captures quite well how subjective our views on wealth can be:

At a party given by a billionaire on affluent Shelter Island, New York, a friend informs best-selling author Joseph Heller, that their host had recently made more money in a single day than Heller had earned in total from his hugely popular novel, Catch-22.

To that, Heller replies, “But I have something he will never have.”

“And what is that?” they ask.

“Enough,” says Heller. “Enough.”