It might not be enough for 40% of Americans to retire with $1 million or more.

Saving a million dollars for retirement is still an uncommon feat, despite the fact that it is no longer the universal symbol of wealth.

According to a recent CNBC Your Money retirement survey conducted with SurveyMonkey, only 16% of retirees claim to have more than $1 million saved, including all personal savings and assets.

Among those currently saving for retirement, 57% say they hope to save less than $1 million. It's unclear whether these individuals are being realistic about their ability to save or if they believe they can get by on less.

It's challenging to envision your retirement being funded by a single large sum of money.

Financial planners usually suggest considering the opposite approach when planning for clients' retirement. First, you should determine the annual income you'll require to maintain your desired lifestyle after retirement. After factoring in other sources of income, such as Social Security or a pension, you can calculate how much you can safely withdraw from your portfolio to cover any remaining expenses.

Withdrawing money from your portfolio too quickly can significantly reduce the likelihood that it will sustain you throughout your retirement. Following a traditional guideline, you may withdraw 4% of your portfolio's value in the first year, and subsequently adjusting for inflation, you can continue to withdraw that amount thereafter.

To calculate the amount you need to retire with if you want to pay yourself $100,000 a year from your portfolio, divide that figure by 4%. This will give you $2.5 million. If you plan to retire with $1 million, you can expect to withdraw $40,000 in your first year.

How much you'll spend in retirement

The amount of retirement income you'll need depends on various factors, such as your lifestyle, life expectancy, and the level of medical care you'll require.

"According to Jamie Bosse, a certified financial planner and senior advisor at CGN Advisors in Manhattan Kansas, there is a general guideline that suggests that about 80% of what you spend today is what you will likely spend in retirement. However, Bosse notes that this can vary during the retirement years, particularly during the first decade, which is often more expensive as people tend to spend money on things they've always wanted to do."

Bosse and other advisors believe that many retirees have major, fixed expenses that decrease, allowing them to safely spend the money they were previously saving. Additionally, some expenses like college tuition and mortgage payments may no longer be necessary in retirement.

Gerika Espinosa, a CFP with DMBA in Salt Lake City, Utah, advises that you should assume a status quo when it comes to your spending. She suggests that you might switch out your mortgage payment for a medical premium payment.

Based on my experience, it's extremely challenging for individuals to accept a reduction in their standard of living.

To maintain or slightly decrease your standard of living in retirement, consider what you need to save.

If you claim Social Security at full retirement age, your benefit will replace approximately 40% of your pre-retirement earnings. However, if you wait until age 70, the U.S. government will increase your benefit by 8% per year.

With private pensions becoming increasingly rare, you may need to rely on savings withdrawals to cover your retirement expenses. As a result, saving at least $1 million by retirement may seem like a necessity rather than a lofty goal, depending on your income.

""Saving a portion of your income for retirement is crucial for your future financial independence, especially now," advises Bosse. For young people considering these matters, she suggests finding a balance between enjoying life today and planning for the future."

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