A survey by brokerage firm Legg Mason released earlier this week found that the average American believes he will need to accumulate $2.5 million in financial assets by the time he retires in order to support his current standard of living for the remainder of his life.

This isn’t the first time a study of this sort has sparked debate over how much money people must save in order to avoid downgrading their lifestyles after calling it quits, but each time a new one surfaces I grind my teeth over the self-serving nature of these types of surveys.

Over the course of my 28-year career as a financial advisor, I spent nine of those years specializing in working with employees of a Fortune 500 company that were being offered a “voluntary” early retirement package that would pay them up  to one year’s worth of salary to retire prematurely. To be eligible the employee had to be at least age 55 by the time their retirement became official, and once they accepted the offer they could not change their minds.

While the prospect of being paid for a full twelve months to do anything other than report to work is tempting, most of these people intuitively understood that a year later they would be on their own with very limited employment options. For that reason, I spent a great deal of time helping many of them go through the exercise of determining exactly how much money would be sufficient for them to accept the offer and not jeopardize their financial well-being.

Based on that experience, I find it irresponsible for any company in the financial services industry, especially one as respected as Legg Mason, to put a figure like $2.5 million out there as it tends to excite emotions and result in a lot of unnecessary angst and panic among investors who know they have no chance of achieving that objective. Although the putative intent of this survey may be to encourage more investment – which is a good thing – it sometimes has the undesirable side effect of pushing unsuspecting investors into making questionable financial decisions.

I certainly don’t contest the statistical data uncovered by the survey; 60% of respondents indicated they were either not confident or only somewhat confident that they were on track to be able to maintain their current lifestyles later in life. I am also not surprised that the average respondent had a total of $385,000 saved by the age of 58. That is perfectly consistent with what I observed during my career, yet I witnessed many of these same type of people figure out a way to keep their retirement goals intact.

Here is how they did it. First, they understood that it would not be possible to fully retire until they were at least eligible for their early Social Security benefit at age 62, and in most cases not until Medicare kicked in at age 65. Second, they also understood that it would not be possible to carry much long-term debt beyond that age, so buying a more expensive house or taking out large college loans shortly before retiring was out of the question.

In short, retirement is not a question of accumulating assets so much as a matter of managing cash flow. Clearly, the more financial assets you have the more income those assets can generate, and the world would certainly be a less stressful place if every person who quit working possessed savings sufficient to generate enough cash flow to cover all of their expenses in retirement without making any sacrifices. Unfortunately, that is simply not the way the real world works, like it or not.

However, that doesn’t mean that a decent retirement is an unattainable goal for most Americans. If a survey such as this starts getting you down, here are three important points to keep in mind so you don’t give up all hope and consider doing something foolish with your money.

First, despite popular opinion to the contrary, Social Security is not going to disappear anytime soon. This canard gets passed around mostly by politicians to stoke the anxieties of voters during election cycles, but in truth the United States Treasury is not remotely close to having to default on its obligations. Admittedly, the size of the benefit will not be nearly enough to support most people’s current standard of living in retirement, but for many retirees it will go a long way towards paying the bills.

Second, for most folks the cost of housing is their single largest expense in retirement (assuming they are covered by some form of medical insurance), and you have plenty of options to keep that expense manageable. Few people have fully paid off their mortgage by the time they retire, but many have enough equity in their homes to discontinue making monthly payments via a reverse mortgage (minimum age 62 to qualify), and some will have enough equity to also pull out additional funds from time to time, to buy a new car or splurge on a nice vacation once in a while.

Third, there is no rule that says maintaining your current standard of living means not making any changes to your lifestyle whatsoever. It may mean making smarter decisions about the type of vacations you take and the ways you choose to spend your free time, but not being able to take a Caribbean cruise every six months or substituting less expensive tennis for more costly golf as a form of recreation does not constitute a true hardship.

So let’s go back to that average 58 year old with $385,000 in retirement savings. My advice would be to work for another seven years until becoming Medicaid eligible at age 65. Even if he never adds another dime to his savings, at a modest 4% growth rate it would be worth approximately $500,000 at age 65, or only one-fifth of the amount specified in the Legg Mason survey.

Assuming this person worked full-time at least 30 years and earned an average wage, he could expect a Social Security benefit of around $1,000 per month. If married, his spouse would receive the greater of 100% of her benefit or up to 50% of his benefit (assuming she is about the same age). So, a married couple could expect around $1,500 monthly (and much more than that if either one of them earned enough income to max out on their Social Security contribution most years while they were working).

As for the $500,000 in retirement savings, $400,000 could be put in an immediate annuity paying out at an annual rate of about 6% (varies with interest rates at the time the annuity is purchased) which would generate another $2,000 per month in income. Combined with their Social Security benefit, this couple would have $3,500 in monthly income from these two sources, with only a small fraction of it lost to income taxes.

And if they bought their house 15 years earlier for $200,000 with a 30-year mortgage, then the combination of principal they have paid down over the years plus some appreciation in the property means they could discontinue making mortgage payments altogether (so long as they have at least 40% equity in the property) via a reverse mortgage. In addition, many municipalities either waive property taxes for retirees or cap them at a very affordable rate.

So when you add it up, this couple could continue to live in their current home without any long term debt and have $3,500 of monthly income to pay the bills. Plus, they would still have $100,000 in savings (plus future appreciation) to cover unexpected expenses, and go towards the eventual cost of nursing home care if either one should require it later in life. Granted, this is not an ideal scenario, but it is not a doomsday scenario, either.

The good news is I can personally attest to knowing hundreds of former clients who essentially did what is described above, and after making a few minor adjustments lived very happily in retirement. No, it is not the “champagne and caviar” lifestyle of the rich and famous that many of us would prefer, but it is also not the sad existence of destitution and disillusionment so many fear.