Why $1 Million Isn't What It Used To Be (And What Your Number Actually Is)
Becoming a millionaire used to mean you made it.
In 1990, $1,000,000 meant financial freedom. Early retirement, travel, never worrying about money again.
In 2025, it barely means “comfortable.”
If your retirement plan still uses $1M as the magic number - you may be working with assumptions that are 30+ years out of date.
Here’s the uncomfortable truth: the goalposts moved. And here’s what’s even more important: there is no universal “number” that works for everyone.
Your retirement target depends entirely on YOUR lifestyle, YOUR healthcare needs, YOUR location, and YOUR goals.
In today’s newsletter, I’ll break down:
Why $1 million has lost 58% of its purchasing power since 1990
The 6 forces that completely changed retirement math
How to calculate YOUR actual number (not some arbitrary milestone)
Strategic approaches to building retirement security in today’s reality
Let’s dig in ↓
The Inflation Reality: $1M Isn’t $1M Anymore
$1,000,000 in 1990 has the equivalent purchasing power of approximately $2.47 million today.
Based on cumulative inflation data from the Bureau of Labor Statistics.
That means today’s “millionaire” has roughly the same buying power as someone with a $420,000 net worth back in 1990.
You’re not imagining things. It genuinely is harder to achieve the same lifestyle security that previous generations experienced at lower net worth levels.
Healthcare Costs: The Fastest-Growing Retirement Expense
According to Fidelity’s 2024 estimates, the average retired couple at age 65 may need approximately $315,000 set aside specifically for healthcare expenses throughout retirement.
That figure doesn’t include long-term care, which could add $100,000+ annually if needed.
You might need to earmark nearly one-third of a $1M portfolio just for healthcare - before considering housing, food, travel, or any other lifestyle expenses.
The fastest-growing expense category in retirement isn’t travel or hobbies - it’s staying healthy.
Longevity: More Years Means More Funding Required
In 1990, life expectancy at age 65 was approximately 82 years. Today it’s approximately 86 - and rising.
That’s 4+ additional years of expenses funded from the same savings. And if you’re healthier and wealthier than average, your personal life expectancy could be even higher.
The planning implication: The longer you live, the greater the risk of outliving your savings. Your plan needs to account for the possibility you could live 5-10 years longer than average.
The Changing Withdrawal Rate Landscape
For decades, the “4% rule” served as the standard benchmark. With current economic conditions, many financial planners now model more conservative withdrawal rates of 3–3.5%.
What this means in real numbers:
$1 million × 3.5% = $35,000 annual withdrawal
$2 million × 3.5% = $70,000 annual withdrawal
These are pre-tax figures that don’t account for healthcare costs or inflation adjustments.
For many people, especially in high-cost-of-living areas, these withdrawal amounts may feel surprisingly modest.
Lifestyle Costs: The “Comfortable Retirement” Shifted
According to Bureau of Labor Statistics data, the average retiree household now spends approximately $58,000 annually.
But if you’re a high-income professional who’s spent decades earning $200K+, your personal baseline for “comfortable” is probably significantly higher—maybe $80,000, $100,000, or even $150,000+ depending on your location and preferences.
This isn’t about being extravagant - it’s about maintaining the quality of life you’ve built over your career.
Your Number Is Personal (Not Universal)
There is no magic number that applies to everyone.
Your retirement target depends on multiple personal factors:
Your desired lifestyle: Travel extensively? Stay local? Multiple properties?
Your location: $100K goes much further in Dallas than San Francisco
Your health situation: Family history? Chronic conditions?
Your other income sources: Social Security, pensions, rental income?
Your legacy goals: Significant assets to heirs or charities?
Your flexibility: Can you adjust spending during market downturns?
Someone retiring at 62 in a low-cost area with a pension might be completely comfortable with $1.5M. Someone retiring at 60 in a high-cost city with no pension might need $4M+ for comparable security.
Both plans can be completely appropriate for their specific situations.
The New Retirement Math: Working Backwards From Your Goals
Instead of asking “Is $1M enough?” the better question is: “What do I actually need?”
Here’s a simplified framework:
Step 1: Calculate your desired annual retirement spending (be specific)
Step 2: Subtract guaranteed income sources (Social Security, pensions)
Step 3: The difference is what your portfolio needs to generate
Step 4: Divide by your planned withdrawal rate (3-4% depending on your situation)
Example:
Desired spending: $100,000/year
Social Security: $30,000/year
Portfolio needs to generate: $70,000/year
At 3.5% withdrawal: $70,000 ÷ 0.035 = $2,000,000 target
This is a simplified illustration. Actual planning should account for taxes, inflation, and factors specific to your situation.
Strategic Approaches to Building Your Number
Regardless of what your personal target is:
Start early: Compound growth remains your most powerful wealth-building tool.
Maximize tax-advantaged accounts: 401(k)s, Roth IRAs, and HSAs offer valuable tax benefits.
Build multiple income streams: Don’t rely solely on portfolio withdrawals. Consider rental income, part-time work, or dividend-focused investments.
Focus on flexibility: The most resilient plans include the ability to adjust spending during market downturns.
Plan for healthcare specifically: Model it as a separate, growing expense category.
Stress-test your assumptions: What if you live to 95? If markets underperform? If healthcare costs double?
Bottom Line: It’s About Security, Not Status
The point isn’t to discourage you or suggest that $1 million is worthless.
It’s to ensure you’re planning based on today’s reality, not outdated assumptions.
$1 million might provide complete security for someone with modest needs in a low-cost area with additional income sources. It might be insufficient for someone with different circumstances.
The key insights:
Inflation fundamentally changed what “millionaire” means
Healthcare and longevity made retirement more expensive
Your personal number depends on YOUR specific situation
Cookie-cutter targets like “$1M” or “$3M” miss the point entirely
Strategic planning based on your actual needs beats chasing arbitrary milestones
Don’t aim for someone else’s number. Calculate yours. Then build a disciplined plan to reach it.
Whenever you’re ready, there are 2 other ways we can help you:
30-Day Strategy Sprint: Got a specific financial challenge holding you back? In just 30 days, we’ll tackle 1-3 of your biggest money roadblocks and hand you a personalized action plan. Perfect if you want expert guidance without a long-term commitment. Limited spots available.
Ongoing Wealth Partnership: We’ll work with you month after month to slash your taxes, find hidden income opportunities, and build lasting wealth. You set the life goals. We handle the financial strategy to get you there faster.
Opulus, LLC (“Opulus”) is a registered investment advisor in Pennsylvania and other jurisdictions where exempted. Registration as an investment advisor does not imply any specific level of skill or training.
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