"Create a realistic picture of where you are and where you expect to be when you step out of work, and make a [retirement] plan that reflects that," said certified financial planner Peter Creedon, chief executive of Crystal Brook Advisors. "If you have a plan, you have a much better chance of succeeding."
For a couple of decades, the industry rule of thumb has been that a 4 percent annual withdrawal rate, adjusted yearly for inflation, provides the best chance of not outliving your savings.
While some experts question whether 4 percent should remain the standard, T. Rowe Price recently released research confirming it remains a reasonable withdrawal rate.
The study examined returns in a diversified portfolio of 60 percent stocks and 40 percent bonds over rolling 30-year periods starting in 1926. The results showed that an initial 4 percent withdrawal rate, adjusted for inflation, could be sustained for 30 years with a 90 percent chance of not outliving your savings.
Financial advisors say that, whether 4 percent should be an assumed safe withdrawal rate or not, a person's individual circumstances dictate how much they can afford to take out each year.
For some, that could be 1 percent or 2 percent; for others it could be much higher.
"But once you get above the 5 percent range, you need to start looking at whether it will be sustainable for the rest of your life," said Daniel Lash, a CFP with VLP Financial Advisors.