You will not work a day beyond your 55th birthday. And you plan to spend your retirement days sipping lemonade on Capri and stiffening your neck by watching two weeks of tennis at Wimbledon. You have no intention of being a stay-at-home retiree.

You might not have much choice, though.

Most likely, Social Security and your pension or retirement plan will only partially subsidize your dreams. According to 2002 government estimates, Social Security replaces about 40% of the average worker's preretirement earnings and that percentage may fall even lower in the future. Pensions or employer-sponsored retirement plans don't always cover the rest. Your own savings will more than likely make the difference between a retirement of jet-setting and one of sweater knitting.

So, in addition to monitoring your retirement portfolio and rebalancing as necessary, you should also calculate whether that portfolio is returning what it needs to be returning for your dream retirement. Here's how to do just that.

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