It has always had a beautiful ring to it, no? The word "millionaire" probably conjures feelings of financial security for many of us. I know it does for me. But these days, it's not the financial silver bullet that many of us may think.

It depends
For starters, having a million dollars means different things to different people.

Imagine, for example, that you're 68 years old and about to retire, and you have $1 million as your nest egg. It's what you're counting on to carry you through your golden years. In our Rule Your Retirement newsletter, I learned that in order to make your nest egg last, you should conservatively plan to withdraw about 4% of it per year in retirement to live on. So 4% of $1,000,000 is about $40,000, or roughly $3,333 per month. Will that be enough? For many people, the answer is a resounding "yes!"

According to our friends at the U.S. Census Bureau, between 2003 and 2004 the real median household income was $44,389. So retiring on $40,000 would put you darn near the middle of America. That may sound good, but remember the old real estate agent refrain: "Location, location, location." According to the ACCRA Cost of Living Index, living in Manhattan costs twice as much as the national average, so $40,000 would be sort of like $20,000 there -- and that sure doesn't sound like much to live on. In McAlester, Okla., meanwhile, the cost of living is just 77% of the average, so living on $40,000 there would be like living on $52,000.

Then there are differences to consider between people. If you want your retirement to feature a lot of fishing at the lake down the road and maybe some gardening and crossword puzzles, you might do just fine with that $40,000. But if you want to finally see the world and do a lot of traveling to visit grandchildren (with bags full of gifts), $40,000 may not be enough.

If you're young ...
Another critical consideration is age. If you're 65 and have a million dollars, that's quite different from being 40 with a million smackers. A 40-year-old might leave that money to grow in the stock market for another 25 years. If it grows at 10% per year, on average, it can become nearly $11 million by retirement time. Retire on 4% of that each year, and you'll be enjoying more than $400,000 per year. Amazing, eh?

And if that's not enough, remember that you might earn even more than that if you're invested in the right places. Our Rule Your Retirement newsletter regularly offers some suggested stocks and funds. About a year ago, First Data (NYSE:FDC) and Colgate-Palmolive (NYSE:CL) were highlighted, along with many other examples of attractive values. (A free trial of our newsletter will permit you to review every past issue and all its recommendations.) First Data has advanced about 16% per year, on average, over the past 14 years. Colgate-Palmolive (hardly an exciting-sounding company, wouldn't you agree?) has surged an average of 22% per year over the past 25 years. So if you find some terrific long-term performers (and we'd love to help you find them), you can grow your nest egg relatively quickly, whether it's $1 million or $15,000.

Here are some other strong historical performers:

  • Dell (NASDAQ:DELL) has gained about 35% per year, on average, over the past 15 years.
  • Southwest Airlines (NYSE:LUV) has gained about 13%, on average, over the past 25 years.
  • General Electric (NYSE:GE) has gained about 13%, on average, over the past 25 years.

Of course, not all well-known giants fare well in the long run. Eastman Kodak (NYSE:EK), for example, has gained an average of about 3% per year since 1981 and has lost about 40% of its value over the past five years. Pfizer (NYSE:PFE), meanwhile, is priced lower than it was eight years ago. I don't mean to suggest that these are lost causes -- only to point out that some seemingly great companies can falter and that it's important to select your investments well and monitor them over time.

More considerations
So you're 40 and you've got that million dollars, right? OK, probably not. Don't stab yourself in the chest with that pencil, though -- all is not lost. MSN Money writer Liz Pulliam Weston recently pointed out that what might seem like a grim future ahead of you might be a little brighter than you expected. Social Security, for example, is likely to be with us in some form for a long time despite all the fear tactics of politicians. You can probably expect to receive something from it in your golden years. Also, many retirees find that they spend less in retirement than they did while working. Plus, they're no longer forking over payroll taxes. And some of us even have pensions to rely on.

So despairing is a bad thing to do. A good thing to do is to take action. If you're not saving and investing regularly and aggressively, consider doing so. We'd be happy to help you via our Rule Your Retirement newsletter. You can, and should, try it for free for a whole month. Doing so will permit you to peek at all past issues, which feature a host of "Success Stories," profiling people who retired early and are willing to share their strategies.

Here's a sampling of some very useful articles from past issues:

  • In the April 2006 issue, Robert discussed bonds and bond funds, recommending several funds and ETFs (exchange-traded funds) to help us diversify our portfolios.
  • The October 2005 issue delved into dividends and offered some recommended dividend payers.

These articles may also be of interest:

Here's to a happier portfolio!

Colgate-Palmolive and Dell are Motley Fool Inside Value picks.

Selena Maranjian's favorite discussion boards include Book Club, The Eclectic Library, Television Banter, and Card & Board Games. She owns shares of Pfizer and Dell. For more about Selena, view her bio and her profile. You might also be interested in these books she has written or co-written: The Motley Fool Money Guide and The Motley Fool Investment Guide for Teens . The Motley Fool is Fools writing for Fools.