BERKELEY HEIGHTS, N.J. (TheStreet) -- Many high earners feel a false sense of security about retiring because they earn a good living with high disposable income and live well.

Let's make an assumption that being a "high earner" is all relative and largely determined by what part of country you live in. Whether you are a high earner in New York City with net after-tax of $1 million or $250,000 in a low-cost area is immaterial; the point is that pre-retirees need to take a look at their personal balance sheet to ascertain the sustainability of their lifestyle during retirement -- especially for those who have lived at or above their means for their entire lives.

Everything's fine until you get that final paycheck and face the next 30 years of retirement.

Take for example a 60-year-old with net earnings of $250,000 per year. Assume this individual spends all of those after-tax earnings or cash flow each year.

If this person has saved $1 million for retirement, it is very simple math that $250,000 per year is not a sustainable retirement spend. Doing a very quick, back-of-the envelope calculation yields a projected sustainable spend of $80,568 per year. (I assumed a 30-year retirement and 7% portfolio return and assumed all funds were exhausted by the end of year 30. This ignores inflation, market volatility, timing of market returns, Social Security and income taxes but does highlight the spending disconnect.)

High earners in their 50s and 60s need to lay the groundwork to bridge their current spending habits to what is sustainable during retirement. The first step is to get serious about creating an accurate cash flow. Next they should view their spending levels through the lens of their retirement savings. If your savings represent a mere one to two times your current spending levels, you've got some serious work to do! If your solution is "Oh I'll just keep working," there are two important things to remember: older workers cost more, so they are on the firing line in a downsizing; and your health may not allow it.

Older high earners can stay in denial about the situation until they retire because they have the cash flow to support their lifestyle. Once they get that final paycheck, reality will soon set in. Don't let yourself be caught off guard.

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Michael Maye is the founder and president of MJM Financial Advisors (, a registered investment advisory firm in Berkeley Heights, N.J. He is a member of the National Association of Personal Financial Advisors (NAPFA) and has been a speaker covering tax topics at NAPFA's national and regional conferences. Maye has also been a frequent contributor to the Star Ledger of New Jersey's "Biz Brain" and "Get With the Plan" articles. In addition to NAPFA, he is a member of Financial Planning Association, American Institute of Certified Public Accountants, New Jersey State Society of CPAs and the Estate Planning Council of Northern New Jersey.