So, you're looking at your 401 or profit-sharing account balance and you realize: Hokey Smokes! There's $300,000 in there. Or a half a million bucks.

Does this mean you can retire?Maybe. A big maybe. Thanks to a stock market that keeps on going and going, the balances in the retirement plans of some people have ballooned to seemingly small fortunes.

So how do you figure out how much is enough? Sure, there are ways to precisely nail the answer to that by using complex work sheets and software. And we'll look at two couples with roughly the same amount in savings - one that could retire, and one that will have to work 10 more years.

But here's how you can get a rough idea while drinking coffee at the office. Start by thinking about how much your nest egg could generate if you invested it with moderate risk, earning 8 percent a year. (That's less than the 10 percent that stocks earn over time, but stocks are volatile and your income year-to-year could fluctuate quite a lot.) A $300,000 portfolio would generate $24,000 a year. A $400,000 portfolio would kick off $32,000. You get the idea.

Now ask yourself: Could you live on $24,000 or $32,000 a year? Right now? (Remember, you'll have to wait until age 65 to almost age 67 for full Social Security to kick in.) Maybe you could swing it - if you don't have a lot of debt, have paid off most of your mortgage, aren't worried about paying college tuition for your kids and are in good health. Keep in mind you might also have to pay for your own health insurance until you qualify for Medicare at age 65. That could cost $4,000 to $10,000 a year.

On the positive side: Maybe you have a working spouse whose health plan will cover you, or your employer provides retiree medical coverage. Maybe you could move to a low-cost town, and work part time so you wouldn't have to spend as much of your income each year. Throw in other assets you might have (savings, rental income, options, severance pay, trust funds). And don't forget your spouse's retirement assets. If you look at all this, you might realize that your dream of retiring early could be a reality.

But practically speaking, a lot of people who are used to living on a higher income may find living on $32,000 a year difficult. That means they'd be tempted to dip into their principal. Or they'd have to take on a lot more risk with their investments. After all, inflation will chip away at the buying power of their annual payout. So, after working through the numbers, many people will discover that they aren't financially ready to retire just yet.

A professional couple in Laramie, Wyo., both age 40, went to see a financial adviser this year to find out if they have enough to retire. "They said they wanted to retire tomorrow," says Denise D. Smith, a fee-only financial adviser and CPA in Laramie. Looking at the numbers, she found that the couple has $260,000 in 401 and 403 retirement plans and IRAs (individual retirement accounts), $140,000 in savings, $15,000 in a college savings account for their two children (one in preschool and one in grade school), $50,000 in equity on their home, and rental property with $40,000 in equity. Sounds pretty good.

However, if they retire next year, they could run out of money in 10 years, after taxes and inflation, even in a low-cost town like Laramie. Smith advised them to work another 10 years, and strive to save $50,000 a year (not too hard to do with their combined income of $160,000). Added to their current portfolio, and assuming a 9 percent annual return, their nest egg would grow to $1.6 million in 10 years.

We've left out about 50 details from Smith's calculations, but it should give you a general idea about how you'd go about thinking through the numbers when you sit down with the work sheets and calculator.

Now, take a look at another couple with roughly the same amount of retirement assets, who discovered that they can afford to retire.

Tom Jones, a 60-year-old restaurant manager in Indianapolis, was utterly burned-out after more than 40 years with the same company, working 12-hour days, six days a week. Though desperate to retire, he still felt that the $375,000 in his profit-sharing plan, and $16,000 in IRAs, wouldn't be enough.

But JoAnne Paynter, a fee-only financial planner in Hilliard, Ohio, whom Jones consulted, pointed out that he could afford to retire immediately. Here's why: Jones owes only $9,000 on his home, all three kids are on their own, and his wife, Sherry, 50, still works at a job that provides medical coverage and an annual income of $25,000.

Mr. Jones retired in January last year, and rolled his retirement-plan money into an IRA, which has grown by $120,000 since then. Although he could afford not to work, Mr. Jones also took a job delivering electrical equipment, work he enjoys, which brings in $12,000 a year. The couple won't have to tap their nest egg until Mrs. Jones retires. And even then, they won't tap much, because they're thrifty and live in a low-cost area.

The couple, married for 30 years, were surprised to discover they can even afford the occasional vacation ("and stay in a motel! Not just with family!" says Mrs. Jones). In fact, they have budgeted to travel to Hawaii in three years. "This is like a dream come true," she says. "We had no idea we could do this. We thought retirement was always something far away."