As others have said, you have to consider what you are living on now and allow for inflation of all expenses. Remember that all expenses do not inflate at the same rate (at least not lately). Medical in particular has gone up a lot each year.
I'm in a similar situation - I save so much (out of necessity) that my salary has no relation to what I need to live on. Be sure to get at least enough health insurance that if something catastrophic happens, you have coverage for that. If you pay the first $5K or whatever, and they pay most or all of the rest, you won't become bankrupt if you have an illness or car accident or whatever. Think of it as bankruptcy protection.
If you know how to use spreadsheet software (hey, not everyone does) that's what I used, painfully, to consider options. What I did was look at my actual expenses, year by year, and inflate them by various amounts each year. I was trying to figure out if my money would last until I was nearly 100 (not likely but my dad is almost 89 so not unlikely). Anyhow it was a lot of work but IMHO well worth it.
Periodically I take my current assets and just lump them into a kind of starting point for the year, subtract expenses, and see how long it lasts. You don't have to track every penny but it helps to know roughly what you are spending on food, utilities, and so on.
I'm not usually this compulsive
but I am heading toward early retirement (hopefully in June) and it is critical that I feel comfortable financially.
Smartmoney.com has retirement worksheets that seem to do the same thing with less work, but I wanted more control over the inflation % and so on.
