your biggest expense healthcare there was 'for a family of four' if you are retiring, you should not generally have more then a single dependent, your spouse.
o right away we can at least half that cost. We should be able to further reduce it by including medicare, you probably sitll want supplemental medical insurance, and likely a dental plan.
Housing, again lots of people retiring that still have mortgage payment, that is probably a mistake unless it is for strategic reasons like you have a really good fixed rate and are not paying it off because you are getting better returns on the cash but easily can... At any rate the cost should not be 1500 a month that should be several hundred in maintenance and upkeep costs perhaps but not 1k. I know there are counter arguments and small number of counter examples in terms of history, but generally speaking non-strategic renting (IE you have a temporary position / contract somewhere you don't plan to stay after) is generally a bad bet. Better to buy something, anything, however you have to finance it in most cases as far as real-estate goes, at least long term.
Next consider you have some social security income that will offset what has to come out of your portfolio.
I think most couples could/can retire comfortably on 1.2million, even today. That is still a big pile of money that for a lot of folks is hard to amass maybe even out of reach but it isn't 2million either.
People have to be realistic though, if you are going to reach retirement age, still have dependents, and insist on renting home/apartment/condo/etc close in town - well you are not going to be able to retire, unless you are already independently wealthy.. Its just not going to happen. Our whole economic system just isnt structured for that. If the kids are expected to still be on your dime, and you don't have a housing 'investment' in addition to a financial portfolio yeah better get real and come up with a different plan now, because you're not going make it.