![\"Businessman](\"https:\/\/www.newsbeep.com\/us\/wp-content\/uploads\/2025\/11\/rich-wealthy-senior-man-reads-paper-ipad-blue-suit-cafe_iStock-1267547577.jpg\")
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GOBankingRates’ editorial team is committed to bringing you unbiased reviews and information. We use data-driven methodologies to evaluate financial products and services – our reviews and ratings are not influenced by advertisers. You can read more about our editorial guidelines<\/a> and our products and services review methodology<\/a>.<\/p>\n 20 Years Trusted by If you\u2019ve hit the $5 million mark in retirement savings<\/a>, you\u2019ve achieved a major milestone that you should be proud of. But does that mean you can finally stop saving? <\/p>\n GOBankingRates asked financial experts to weigh in on whether this milestone signals financial freedom<\/a>, or just another checkpoint.<\/p>\n Retirement Flexibility Matters More Than Your Savings Total<\/p>\n Jeff Herman, founder and investment advisor at The Jeffrey Group<\/a>, believes that it\u2019s more important to build a retirement nest egg that can adapt to changing needs rather than aiming for a particular amount.<\/p>\n<\/p>\n \u201cA $5 million portfolio might look like financial freedom<\/a> on paper, but it\u2019s a checkpoint for many \u2014 not a finish line,\u201d he said. \u201cThe real question isn\u2019t \u2018Do I have enough?\u2019 but \u2018Can my plan adapt?\u2019 Inflation, healthcare shocks and tax changes can all erode what looks sufficient today.\u201d <\/p>\n Herman advises his clients to focus on how they can generate income in retirement by staying flexible.<\/p>\n \u201cRetirement success isn\u2019t about the number associated with your account balance,\u201d he said. \u201cWhile important, the priority focus should be on how durable your income is. Create consistent, purpose-driven income streams<\/a> that don\u2019t rely solely on market returns.\u201d<\/p>\n Your Portfolio Needs To Be Able To Withstand Market Downswings<\/p>\n If you have $5 million saved, you need to ask yourself if your plan would hold up in bad markets, said Steven Rog\u00e9, CFP, chief investment officer and CEO at R.W. Rog\u00e9 & Company, Inc<\/a>.<\/p>\n \u201cWith a balanced portfolio and a sensible withdrawal rule<\/a> of roughly 3% to 4%, $5 million can generally support about $150,000 to $200,000 per year before taxes, with periodic adjustments as markets and inflation change,\u201d he said. \u201cThe goal is to fund life from growth plus income, not to chase the highest dividend and accidentally shrink the principal that has to support you for decades.\u201d<\/p>\n You can stop saving at $5 million if your portfolio meets certain requirements: \u201cYour near-term spending is fully covered by cash and bond sleeves, your long-term money is invested for growth and your withdrawal rate and taxes have been tested against rough-year scenarios,\u201d Rog\u00e9 said.<\/p>\n<\/p>\n \u201cIf you plan to retire very early, spend at a high rate or fund large legacy and giving goals, keep saving and sharpen the tax plan,\u201d he continued. \u201cThe litmus test is simple \u2014 your plan should survive a bad market on paper and give you the confidence to sit through it in real life.\u201d<\/p>\n $5 Million Can Be Sufficient Based on Your Lifestyle Goals<\/p>\n Andrew Latham, a certified financial planner with SuperMoney.com<\/a>, believes that most people can stop saving when they accumulate a $5 million nest egg.<\/p>\n \u201cFor many, $5 million is more than enough,\u201d he said. \u201cUsing a 4% withdrawal rate, that translates to $200,000 per year in potential income<\/a>, not including Social Security or other assets. If your annual spending needs fall well below that, and your plan accounts for taxes, healthcare and inflation, you may have already hit your financial independence number and could stop actively saving.\u201d<\/p>\n However, there\u2019s also no harm in continuing to save.<\/p>\n \u201cSome people keep contributing because they enjoy their work, want more cushion or have philanthropic or legacy goals,\u201d Latham said. \u201cBut there is no rule saying you must keep contributing once you have reached your target. Instead of getting caught up in whether you are maximizing every account, focus on whether your full portfolio supports the life you want, now and in the future.\u201d<\/p>\n On the Flip Side, $5 Million Might Be Insufficient for Your Desired Retirement Lifestyle<\/p>\n![\"\"](\"https:\/\/cdn.gobankingrates.com\/wp-content\/uploads\/2023\/11\/icon-20.svg?webp=1&quality=75\"){kind=icon}
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