For years, many investors believed that $1 million was the “magic number” for a comfortable retirement. But today, with rising healthcare costs, inflation, and longer life expectancies, that figure is no longer enough for most families. At VestGen, our experience shows that roughly $5 million is a more realistic benchmark for investors to target to maintain their lifestyle, safeguard their wealth, and potentially leave a legacy.

Why $1 Million Now Falls Short

Even with careful planning, $1 million or even $2 million can be spent faster than in previous years. Healthcare and long-term care expenses have risen, and property taxes and everyday living costs vary widely depending on where you live. For individuals and families in higher-taxed states like California, Illinois, New Jersey, and New York, greater financial demands may mean more careful and proactive planning to retire comfortably. A nest egg of $5 million provides not only the income needed for daily living but also a cushion for unexpected expenses, helping to ensure financial strain doesn’t impact you and your family during retirement years.

What $5 Million Realistically Provides

A retirement portfolio of this size can generate sustainable income over two decades or more, while still preserving flexibility for estate planning. Assuming a conservative annual return of 3–5%, $5 million translates to $150,000–$250,000 in pretax income per year. That allows for:

• Healthcare Preparedness: Adequate funds for medical expenses, assisted living, or in-home care.
• Lifestyle Maintenance: The ability to continue traveling, supporting family, or enjoying meaningful experiences without cutting corners.
• Legacy Building: Greater capacity to transfer wealth tax-efficiently to children and grandchildren, as well as to charitable causes.

Strategic Portfolio Planning

Achieving and sustaining this level of wealth requires more than market returns; it requires intentional strategy. During your working years, equities are essential for growth. But as you approach retirement, diversification into more conservative investments becomes crucial. At VestGen, we also emphasize tax planning. Many successful professionals and business owners underestimate how much taxes erode retirement wealth. By structuring accounts, withdrawals, and investments strategically, we help clients maximize what they keep and minimize the risk of needing to return to work later in life.

Don’t Delay Retirement Planning Any Longer

Retirement is always customized based on the needs of the individual and/or family. The right number for you depends on your goals, family commitments, location, and plans for enjoying retired life. But a good rule of thumb is to target $5 million as the magic number. The earlier you start adjusting your plan, the more options you’ll have to secure your lifestyle and protect your wealth long-term.

At VestGen, we work with clients to ensure their retirement strategy is sustainable and keeps pace with current financial realities such as higher taxes, inflation, and rising healthcare costs. If you’re unsure whether your current plan is enough, now is the time to evaluate and refine it. Connect with a VestGen advisor to explore how we can help you align your wealth with the future.