Fiction: $1 million is a lot of money and plenty for retirement.

Fact: $1 million is certainly not a "little" money, but it is unlikely enough to support a retirement given longer life expectancies and lifestyle needs.

As a rule of thumb, you should plan on withdrawing no more than 4 percent of your retirement portfolio in your first year of retirement, or you will run the risk of depleting your resources too quickly.

For people making six figures and wanting to maintain their preretirement lifestyle, $1 million in retirement savings will not suffice. For people wishing to live on around $90,000, or earning around $110,000, they must withdraw at least $70,000 and depend on social security for the remaining $20,000. This equates to putting aside approximately $2 million for retirement.


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