Understanding how much you need for your retirement isn’t easy. It may feel like all you know is that it’s a big number. And with so many variables in play, it seems simpler to just pick a large sum that feels like a substantial amount of money.

Because of this, many people assume they need $ 1 million to retire. If they hit that number, they’re golden. But is a million bucks enough for your retirement savings goal ?

It might make sense to aim for this size nest egg. But the amount you need to save isn’t as simple as finding a number that sounds great. You need to look at a slew of other factors to determine what “enough” money for retirement looks like for your specific situation. Here’s some of what you need to consider.

The more you pay in taxes, the less money you’ll have for retirement. Using our $ 1 million mark as an example, let’s look at how that money could be allocated across four different portfolio arrangements — and how each has a different actual value when it comes to funding your retirement .

1) If Your Million Is in a Roth: Having $ 1 million in a Roth account , (be it an IRA, 401(k) or 403(b)), is ideal. Why? There are no taxes on distributions. In this scenario, your $ 1 million truly is $ 1 million.

2) If Your Nest Egg Is in Traditional Tax-Deferred Accounts: Now let’s imagine your million-dollar retirement nest egg lives in a tax-deferred account, like a traditional IRA rollover or a traditional 401(k). Thanks to the impact of taxes, your account may only be worth $ 850,000, $ 750,000 or even just $ 600,000.

And that’s just considering federal income tax on your distributions in retirement. Your $ 1 million could be further reduced by state taxes.

3) If You Incur a High Basis … If your $ 1 million is in a taxable account, what’s the basis (the original purchase price) of your investments? If you bought all your investments yesterday, your $ 1 million is truly worth $ 1 million.

4) … But If You’re Dealing with a Low Basis: If you bought all your investments decades ago, you are likely looking at a big tax bill when you sell anything in the $ 1 million portfolio. Said another way, your $ 1 million portfolio isn’t really worth $ 1 million after you consider taxes.

Another factor to consider when determining if $ 1 million is enough to retire on: How long will your retirement be?

Do you plan to retire at age 70 or 55? What’s your family’s average life expectancy: about 80, or were your grandparents all centenarians?

If you plan on retiring at 70 and a family history with a shorter life expectancy (or your own poor health) dictates only a decade in retirement, then $ 1 million is more than likely going to be sufficient retirement savings.

But if you plan to retire early and your other family members lived to 100? You’re going to need more than $ 1 million in savings to make it through your long retirement.

Just like the length of retirement plays a big role in how far a million bucks can stretch, so does how you plan to spend that money. How much money do you want to spend? What’s your intended lifestyle?

Do you see yourself reading books in your living room, working on your garden and playing bridge with your neighbors in retirement? If so, then $ 1,000,000 may be enough. But, if you see yourself traveling half the year and lodging at 5-star hotels, $ 1 million may leave you short of what you really need for the retirement you want.

If you think about the length of your retirement and the type of retirement you want to have and find that $ 1 million won’t be enough after all, don’t panic. Saving more and more isn’t necessarily the answer, because you don’t have to live on savings alone.

A million dollars in a vacuum won’t fund many people’s retirements, once we consider all these factors here. Assuming a 2% safe withdrawal rate, that’s only $ 20,000 in annual income. But working with one or two household Social Security income streams, and/or a pension benefit payment as well, makes a world of difference.

You won’t get far on $ 20,000 in annual income. Adding an additional $ 30,000 from Social Security benefits could bring that total to $ 50,000. You’ll have a much different quality of life living on $ 50,000 vs. $ 20,000.

Our clients are probably sick of us talking about fees all the time. But we never stop talking about fees on your investment because they matter so much. You can pay 3% for your investment funds or you can pay 0.03%. That 100-fold difference creates a huge impact on your chance for a successful retirement.

If your retirement savings goal is $ 1 million, your actual savings needs to be higher to account for the fees your investments incur. How much you pay in investment fees will help determine just how valuable your $ 1 million of retirement funding is when you’re ready to use it.

As with all financial planning questions, the answer is, “it depends.” It all boils down to your particular situation — which is why working with an objective, educated third party can be so valuable.

Talk through these factors and more with your financial adviser to get a rational — not emotional — perspective on how to make the retirement you want work for you and your financial plan.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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