Let's take a closer look at a hypothetical 55-year-old couple with $2 million total -- $1 million in after-tax savings that they'll dip into first, and $1 million in pretax accounts that they don't want to touch until age 70 1/2.

Jason Flurry, president of Legacy Partners Financial Group, uses a "bucket system" to show how simple it can be to meet income needs of $60,000 per year, factoring a 3 percent withdrawal rate, without taking unnecessary risks. (Early retirees with $1 million total and income needs of $30,000 a year can follow this strategy by dividing the amounts, shown below, in half.)

In this scenario, Flurry divides the money into three hypothetical buckets to be drained one after the other. Any additional interest this couple may earn or other income streams they may have, such as pensions or Social Security, would serve as a hedge against taxes and inflation over time.

The assumptions used here are conservative, giving early retirees a little room to tinker. For example, a 4 percent withdrawal rate might be used with a high probability for success. However, Flurry prefers using a 3 percent withdrawal rate for this example.

Copyright 2014, Bankrate Inc.