Q. I turned 55 six months ago and am contemplating retirement. My current salary is $114,000 per year and my major expense is $1,800 monthly rent. I have no debt, a $75,000 CD and pension plan that will pay $3,200 a month or $430,000 if I cash out. I can get an additional $1,629 per month in Social Security when I turn 62. Is retirement possible?

A. You've done an admirable job in saving and planning for an early retirement.

But most financial experts agree that the best measure of whether you're ready to retire is whether you can replace 80% of your pre-retirement income -- or $9,500 a month in your case.

If you retired now, you could only count on your monthly pension check and the interest from your CD -- or $3,500 a month. After you've paid your rent, you'd only have $1,700 a month to live on.

When your Social Security benefits kick in, that would boost your monthly income to $5,100, or just over half of what you're making now.

Given your age, we wouldn't encourage you to cash out your pension. You have many years of life ahead of you and the guaranteed monthly income it provides is a good start towards a comfortable retirement.

The same goes for your CD. You're too young to start whittling away at the principal.

So unless you're prepared to live on a lot less money, you're not ready to stop working.

A better idea would be to spend the next several years building a bigger, better nest egg.

We recommend your employer's 401(k) program, if it offers one, or an Individual Retirement Account (IRA), which will allow those savings to grow tax-free.

Take a look at our "5 steps to saving for retirement". It will help you make all the right decisions.