Anytime the pick is moving and not in contact with a string, that's wasted motion. Therefore, the player should strive to minimize the length of the pickstroke in either direction, in order to make the most of every movement. How much should the pick move? Well, the thickest string on a guitar is generally only about .050" thick, or about one-twentieth of an inch.

Obviously, it is neither possible nor desirable to limit the motion of the pick to such a minute distance, but you can see that very little actual motion is required to play the note. Therefore, I would suggest keeping the pick as close to the string as possible, while allowing enough space for the string to vibrate clearly, but no more than 1/4" of total travel. That may not sound like much at all, but that's all you need; any further motion is wasted.