A good rule of thumb would be to take the value of your savings, multiply by about .07, and see what that gets you. Then take any other income you might get and add it on, like Social Security, or pensions. If you figure you can’t live on that, then I might still retire, but look for another job. You could then get your 401k out and diversify it, but just let it build for a couple more years. There are some reasonable ways to make 7% without unreasonable risk, but not in CD’s or bonds. I trade options and stocks, so I do take on more risk, but the rewards are greater. I hate to tell people about that though because many feel they can do the same as I do without any experience. CAN’T BE DONE!!! I take hits along with the gains. Some can’t stand the pressure. Much of investing is knowing yourself. If you have a fit and lose sleep over losing $1k, investing to make a living probably isn’t going to work. You have to be able to make $30k-$50k consistently to live even moderately today. As an example, I LOST $30k last month. I was stupid, it's my fault, but I know I will make it back and then some. I knew we were overdue for a 10% pull back, but my particular investments were worse than that. If I lost sleep over it or froze up, then I have to get out and go back to work. You have to be able to function under pressure and realize not every month will be a winner. The month before, I had a good month and even made over $10k in one day. It all has to average out. All this comes with experience, reading charts, knowing option calls and puts, and keeping up with current trends. I watch about 3 hours of finacial TV a day and read many letters just to keep up with what the "talk" is. I've been in the market since Carter and 22% interest rates, I've seen the crash of "87,( I was hunting in Colorado then), and the tech bubble and 9/11. There isn't too many ways to protect against such things.
Take into consideration any other income you might have and you can see that you may have bought your last new car, taken your last vacation, etc. People that are used to living on $60k-$100k per year will have a rude awakening unless their net worth is a couple of million. There are some that have it, but many don't. The biggest bugaboo in retirement, (For me anyway) is medical. If you are in good health, count your blessings. If you have even minor problems, they can become major when you retire. Even with insurance, I'm going broke. My mother in law is paying $800- to $1300 a month for prescriptions. My father in law is about $300 a month. Their retirement is $1800 a month. Guess who makes up the difference. My mother is going backwards now and refinancing her house to pay her bills. Soon, she too will probably be on my expenses. My daughter is going to college and has no job right now. She also has Crohn's. I have a bad back, tachycardia, and high blood pressure. Needless to say, doctor bills and drugs are a MAJOR problem for me. When I retired, I wasn't aware that all these families would be on my money, but they are. There is much to think about and analyze when you decide to stop working. My biggest goal now is to move out of my 4 bedroom house and get something more mobile. I may even rent for awhile. If you live in a city, chances are your taxes are high and going higher.
Everybody has their own situations and requirements. I live a very frugal life so I don't mind giving up some to help others in need. Many of my friends however can't afford a car breakdown without refinancing their home. Everybody is different.