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Matthew Peyton \/ Getty <\/p>\n Matthew Peyton \/ Getty <\/p>\n
Moneywise and Yahoo Finance LLC may earn commission or revenue through links in the content below.<\/p>\n
If you have $2 million in retirement savings, congratulations. That\u2019s well above the $1.26 million that Americans believe is needed to retire comfortably, according to a 2025 Northwestern Mutual study (1).<\/p>\n
At this point, you have probably overcome the challenge of saving enough. Now, your next mission is wealth preservation. Higher taxes and the wrong lifestyle choices can quickly erode what seems like a huge treasure trove.<\/p>\n
Shifting your perspective from building wealth to protecting it isn\u2019t easy. But the journey could be less treacherous if you avoid these five common money traps that high-net-worth individuals sometimes fall into.<\/p>\n
If you follow the 4% rule, $2 million in retirement savings would give you $80,000 a year, adjusted for inflation. That could either be too much or too little, depending on where you live and how much you spend.<\/p>\n
Lifestyle inflation \u2014 where your spending habits change with the size of your portfolio and paycheck \u2014 is a real risk. It\u2019s perhaps one of the reasons why only 36% of American millionaires, according to Northwestern Mutual, consider themselves \u201cwealthy.\u201d<\/p>\n
Among these millionaires, those who don\u2019t work with a financial advisor feel less prepared for retirement and expect to retire two years later than those who do. In other words, some high-net-worth individuals haven\u2019t taken the time to properly plan their retirement budget and timeline.<\/p>\n
Don\u2019t fall into the same trap. Consider hiring a financial advisor to help you crunch the numbers and build a plan that works. While $2 million sounds like a lot, it can quickly disappear and might not be enough for everyone.<\/p>\n
Of course, hiring an advisor can be a lifelong commitment \u2014 one that might make or break your retirement.<\/p>\n
This means finding reliable advisors is crucial \u2014 and that\u2019s where Advisor.com<\/a> can help. The platform connects you with an expert near you for free.<\/p>\n Advisor.com does the heavy lifting for you, vetting advisors based on track record, client ratios and regulatory background. Plus, their network comprises fiduciaries, who are legally required to act in your best interests.<\/p>\n Just enter a few details about your finances and goals, and Advisor.com\u2019s AI-powered matching tool will connect you with a qualified expert<\/a> best suited for your needs based on your unique financial goals and preferences.<\/p>\n Finding the right advisor isn\u2019t always easy \u2014 there\u2019s no one-size-fits-all solution. That\u2019s why Advisor.com lets you set up a free initial consultation<\/a> with no obligation to hire so you can find the right fit for your needs.<\/p>\n Read More: I\u2019m almost 50 years old and don\u2019t have retirement savings. Is it too late to catch up?<\/a><\/p>\n Read More: Non-millionaires can now invest in this $1B private real estate fund starting at just $10<\/a><\/p>\n If much of your wealth is in tax-advantaged retirement accounts such as 401(k) plans and IRAs, you need to prepare for the tax consequences of making withdrawals in retirement.<\/p>\n In 2024, less than half (49%) of millionaires without a financial advisor told Northwestern Mutual they consider how much taxes could eat into their retirement savings (2). Without a proper forecast of these taxes and a strategic plan to minimize taxes, you could end up with a thinner-than-expected safety net in retirement.<\/p>\n Work with an expert to see if you can pull off strategies such as Roth conversions or tax gain harvesting to minimize these costs.<\/p>\n With $2 million in retirement savings, you have more capacity to take risks than the average investor. But that doesn\u2019t necessarily mean you should.<\/p>\n The best approach is generally somewhere between aggressive growth and conservative fixed income. Finding the right balance for you will depend on your age, risk appetite and target returns.<\/p>\n Most millionaires seem to understand this. According to investment firm Kohlberg Kravis Roberts, people with between $1 million and $30 million in liquid assets typically have 2% of their portfolio in cash, 22% in alternative assets, 33% in fixed income, 15% in international stocks and 28% in domestic stocks (3).<\/p>\n Investing across different asset classes and countries stabilizes your multimillion-dollar portfolio so that an economic crisis in a country or a correction in any specific market doesn\u2019t derail your retirement plans completely.<\/p>\n Gold is one alternative asset that\u2019s proven its resilience over the short and long term. This precious metal is worth over 58 times more than it was a century ago (4), reaching historic highs of $5,602 per ounce in January (5).<\/p>\n Investing in gold can be a great way to help preserve the value of your nest egg. And if you\u2019re looking for a way to invest in gold that also provides significant tax advantages, consider opening a gold IRA with the help of Thor Metals<\/a>.<\/p>\n Since gold IRAs allow investors to hold physical gold or gold-related assets within a retirement account, it combines the tax advantages of an IRA with the protective benefits of investing in gold. This makes it an attractive option for high-net-worth individuals looking to hedge their retirement funds against economic uncertainties.<\/p>\n You can even get up to $20,000 in free metals<\/a> on qualifying purchases for a limited time.<\/p>\n As a multimillionaire, you may be tempted by seemingly exotic asset classes typically reserved for the ultra-wealthy. Private equity funds, litigation finance, music royalties, private credit funds and hedge funds might reach out to seek some investment from you.<\/p>\n Despite their eye-catching marketing material, these types of alternative assets aren\u2019t all that, suggests research by retirement investment consultant Richard Ennis.<\/p>\n According to Ennis, from 2008 to 2024, the average alternative asset underperformed a simple passive index fund composed of stocks and bonds, primarily because of their high fees (6).<\/p>\n Simply put, you don\u2019t need fancy investment strategies.<\/p>\n However, if you\u2019re looking for solid alternative investments, real estate is worth a second look.<\/p>\n Rental properties have long been a proven source of steady, passive income for high-net-worth investors \u2014 so it\u2019s no wonder that real estate accounts for nearly 25% of the typical family office portfolio (7).<\/p>\n However, the time, effort and costs involved in managing and maintaining multiple properties prevent many from investing. So unless you\u2019re a hedge fund titan or an oil baron, you\u2019ve probably been shut out of one of the most profitable corners of the market.<\/p>\n That\u2019s where mogul can come in. This real estate investment platform offers fractional ownership in blue-chip rental properties<\/a>, which gives investors monthly rental income, real-time appreciation and tax benefits \u2014 without the need for a hefty down payment or 3 a.m. tenant calls.<\/p>\n Founded by former Goldman Sachs real estate investors, the mogul team handpicks the top 1% of single-family rental homes nationwide for you. Simply put, you can invest in institutional quality offerings for a fraction of the usual cost.<\/p>\n Each property undergoes a vetting process, requiring a minimum 12% return even in downside scenarios. Across the board, the platform features an average annual IRR of 18.8%. Their cash-on-cash yields, meanwhile, average between 10 to 12% annually. Offerings often sell out in under three hours<\/a>, with investments typically ranging between $15,000 and $40,000 per property.<\/p>\n Every investment is secured by real assets, not dependent on the platform\u2019s viability. Each property is held in a standalone Propco LLC, so investors own the property \u2014 not the platform. Blockchain-based fractionalization adds a layer of safety, ensuring a permanent, verifiable record of each stake.<\/p>\n Getting started is a quick and easy process. You can sign up for an account and then browse available properties<\/a>. Once you verify your information with their team, you can invest like a mogul in just a few clicks.<\/p>\n Alternatively, if you\u2019re looking for simple, set-it-and-forget-it investment opportunities, Arrived has you covered. This real estate platform offers you access to shares of SEC-qualified investments in rental homes and vacation rentals<\/a>.<\/p>\n Backed by world-class investors like Jeff Bezos, Arrived<\/a> makes it easy to fit these properties into your investment portfolio. Their flexible investment amounts and simplified process allow accredited and non-accredited investors to take advantage of this inflation-hedging asset class without any extra work on your part.<\/p>\n You can view their full list of vetted properties<\/a>, selected for their income-generating and appreciation potential, and start investing today.<\/p>\n If your portfolio exceeds $2 million, your wealth might exceed what you consume in retirement. In other words, you may leave money behind for your children and loved ones.<\/p>\n It would be wise to legally document how you want your assets to be distributed when you pass \u2014 and to take this step as soon as possible.<\/p>\n A surprisingly high number of wealthy people do not have a will or a formal estate plan. When Northwestern Mutual asked its high-net-worth respondents in 2024 whether they had a will, 29% said they didn\u2019t.<\/p>\n That may be why 70% of wealthy families lose their wealth by the second generation, and 90% by the third (8). But by taking steps to preserve your wealth \u2014 and teaching your heirs to do the same \u2014 you can help keep your nest egg safe for generations to come.<\/p>\n With $2 million or more saved, you\u2019re in a strong position for a comfortable retirement \u2014 but a few tax or spending mistakes could quickly change that. Avoid these five common traps and your golden years should be a lot smoother.<\/p>\n Join 250,000+ readers and get Moneywise\u2019s best stories and exclusive interviews first \u2014 clear insights curated and delivered weekly. Subscribe now.<\/a><\/p>\n We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.<\/p>\n Northwestern Mutual (1<\/a>), (2<\/a>); SmartAsset (3<\/a>); United States Gold Bureau (4<\/a>); APMEX (5<\/a>); Bloomberg (6<\/a>); Knight Frank (7<\/a>); PWM (8<\/a>)<\/p>\n This article provides information only and should not be construed as advice. It is provided without warranty of any kind.<\/p>\n","protected":false},"excerpt":{"rendered":"Matthew Peyton \/ Getty Moneywise and Yahoo Finance LLC may earn commission or revenue through links in the…\n","protected":false},"author":2,"featured_media":316750,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[72,1890,176,27450,61,60,3916,15617,174,175,1611,1830],"class_list":{"0":"post-316749","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-dave-ramsey","10":"tag-finance","11":"tag-financial-advisor","12":"tag-ie","13":"tag-ireland","14":"tag-jeff-bezos","15":"tag-northwestern-mutual","16":"tag-personal-finance","17":"tag-personalfinance","18":"tag-retirement","19":"tag-retirement-savings"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/316749","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=316749"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/316749\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/316750"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=316749"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=316749"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=316749"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}