Use the body fat percentage calculator to estimate your current level of body fat.

If muscle definition is your goal, you will need a low body fat percentage since fat will cover your muscle tissue.   Aim for a body fat percentage of 8% or less to achieve that "ripped" look.  During competition, many bodybuilders decrease their body fat levels to levels as low as 3-4%.

Male Bodyweight (lbs) Waist Girth (at umbilicus) Female Bodyweight (lbs) Waist Girth (at umbilicus) Wrist Circumference (widest point) Hip Circumference (widest point): Forearm Circumference (widest point):

Average Body Fat Ranges

Body Fat Percentage for The Average Population
Age	Up to 30	30-50	50+
Females	14-21%	15-23%	16-25%
Males	9-15%	11-17%	12-19%

Benefits Of A Low Body Fat Percentage

Aside from the aesthetic benefits of having a lower body fat percentage, there are also important health benefits that should be taken in to consideration.  Healthy levels of body fat have been proven to decrease joint problems, metabolic disorders, and diseases such as cancer and cardiovascular disease.
Keep in mind that your body does require a certain amount of fat in order to function properly, so having a level of body fat the is too low can actually cause health problems as opposed to prevent them.
You may also find there there is a certain fat percentage that your body "likes", and tries to maintain.  For this reason it can be difficult for people to sustain extremely low levels of body fat for extended periods of time.

How Can I Lower My Body Fat Percentage?

In order to lower your levels of body fat, you will have to perform cardiovascular exercise and restrict your calorie intake to encourage the body to burn off excess fat stores. 
Step 1:  Use the BMR calculator to estimate your body's Basal Metabolic Rate.  This is the number of calories your body requires in order to function.

Step 2:  Estimate the number of calories you burn during daily activities, and add this number fo your BMR.

Example:  John has a BMR of 1800, and burns another 1000 calories while working, playing with his kids etc.1800 (BMR) + 1000 (daily burned) = 2800 cal
Step 3:  Now that you have added your BMR and daily calories burned, you can estimate your exercise requirements and caloric intake needed to lose weight.
Aim for consuming between 200-300 calories less than your total value calculated above, and performing any exercises that burns between 300-400 calories.  This will result in a caloric defecit of 500-700 calories daily, and should theoretically help you lose 1-1.5 lbs of fat weekly.
Example:  John's knows that based on his calculation above, he has to come in well under 2800 calories burned at the end of the day in order to force his body to burn fat stores.  John decides to consume 2400 calories via diet, and jog until he has burned 300 calories.  This means that at the end of the day his caloric intake will be at 2100, while his body needs 2800 to maintain it's current body weight.
2800 cal - 2100 = 700 cal. John is forcing his body to burn 700 fat calories for this day.

You can be more aggressive with your caloric restrictions and exercise, however, losing too much weight too fast can hinder your progress by accelerating muscle loss and decreasing your metabolic rate.