How Does Retirement Planning Change at $1 Million, $5 Million, and $10 Million?

Most people assume retirement planning gets easier as the number gets bigger. More money, fewer problems. That is not what we see in client conversations. The problems do not go away as wealth grows. They change shape, and advice that is exactly right at $1 million can quietly cost you six figures at $5 or $10 million.

This matters even if you are nowhere near retirement. If you are an executive in your 40s or 50s, you are still earning, vesting, and saving. The decisions you make right now with your equity, your account mix, and your company stock are already deciding which retirement problem you will be solving at 60.

So we ran an experiment. We took one couple, kept their lifestyle the same, and gave them three different portfolios. By the end of this article, you will know what question your plan should be answering at $1 million, $5 million, and $10 million, and which moves you can make now to shape the version you end up with.

$1M vs $5M vs $10M Retirement: What Actually Changes?

Tom and Kate are hypothetical, but think of them as a preview of you at 60. Tom spent the last 15 years as a VP at a public company. Kate built her own solo business and is ready to step back too. They are both 60, the house is paid off, and they want to spend about $200,000 a year after tax. They live in Connecticut, so we will call out where state rules come into play. Every state is different, so check the rules where you live.

We hold their lifestyle constant and change only one thing: the size and mix of their portfolio. Pay attention to the mix. What your money is made of matters almost as much as how much of it there is.

Version one has $750,000 in 401(k)s and IRAs, $150,000 in a taxable brokerage account, and the rest in a small Roth and some cash. Spending $200,000 a year means withdrawing 20% of the portfolio. Even with Social Security, that math will not hold for 30 years.

At this level, the plan has one job, which is making the money last, and that question drives almost every decision. Two pieces do most of the work:

• Social Security timing: It becomes a longevity decision. Often the higher earner delays to 70, because that check is among the best inflation-adjusted lifetime income they will ever own.
• Withdrawal protection: The investment plan covers the next few years of withdrawals, so a down market never forces a sale at the bottom.

The biggest lever here usually is not a tax strategy. It is time. If Tom consults for 5 to 10 more years, even part time, more of the portfolio keeps compounding instead of being drawn down. That is the power of a Hybrid Retirement, our phased approach where full-time work gives way to flexible, optional work instead of an abrupt stop.

At $1 million, the plan's job is to make the lifestyle fit the math.

Version two has about $2.5 million in IRAs, $2 million in taxable brokerage, $300,000 in Roth, and $200,000 in cash. That is a very typical mix for the clients we work with. Now $200,000 is about 4% of the portfolio, and Social Security covers a real chunk starting at 70.

Running out of money is no longer the main worry. Taxes are.

In Tom's last working years, he earned about $800,000 in taxable income. In 2026, the 37% bracket for married couples starts at $768,700 (the IRS list of inflation-adjusted tax items has the 2026 thresholds). Every dollar Tom put into his 401(k) saved tax at the top rate.

When Tom retires at 60, they live off the brokerage account, and their return might show $40,000 to $50,000 of income. Those are the lowest tax years they will have as adults. Their CPA calls it a great tax year. It is actually a missed opportunity.

The $2.5 million IRA keeps growing and could reach about $4.5 million by 75. That puts the first required minimum distribution (RMD) somewhere between $180,000 and $200,000, which lands them back in the 24% bracket or higher and deep into Medicare surcharges. If one spouse passes, the survivor files single with the same distributions and half the bracket space. That is the widow's penalty.

The fix is to convert part of the IRA to Roth every gap year, deliberately filling the lower brackets. We call this window the tax control phase: the years between the last paycheck and the start of Social Security and RMDs, when you have more control over your taxable income than at any other point. We unpacked it in Retire at 48 vs 56 vs 60: The Math They Don't Show You.

In 2026, the 22% bracket for married couples tops out at $211,400 of taxable income. For Tom and Kate, that means converting roughly $230,000 a year, or more than $2 million over a decade. Money that was deducted at 37% gets taxed at 22%, and the IRA shrinks to closer to $1 million by 75. The brokerage account funds their spending and the conversion taxes.

That is Life Driven Investing (LDI) in action. LDI is our approach of building the portfolio backward from your life: every bucket has a job, and the order you use them in is part of the strategy. If you want to go deeper, here is how to find your own Roth conversion window.

• Medicare surcharges (IRMAA): These look back 2 years, so conversions at 60, 61, and 62 do not touch premiums, and that is when you convert the most. From 63 on, every conversion is also a Medicare decision. Sometimes we land in the second surcharge tier on purpose, which costs a couple roughly $5,800 a year, because a few years of that can beat decades of bigger required distributions.
• Net investment income tax (NIIT): This 3.8% tax kicks in above $250,000 of income for married couples, so conversions have to be sized with the brokerage account in mind.

At $5 million, your tax return becomes the most important document in your plan. You are designing it year by year, not just filing it.

Version three has about $3.5 million in pretax accounts, $500,000 each in Roth and cash, and $5.5 million in taxable. But $4 million of that taxable account is Tom's company stock, from years of RSUs he never sold, with a cost basis just over $600,000. That puts 40% of their net worth in one company.

Spending $200,000 is now 2% of the portfolio. Unless something goes badly wrong, the portfolio could keep growing through their whole retirement, possibly to $15 to $20 million in today's dollars by their late 80s. The question becomes what this money is for, and who it is for.

The concentrated stock stands in the way of answering it. Selling it all at once realizes $3.4 million in gains, roughly $800,000 in federal tax before Connecticut takes its share. Holding it ties the family's future to one company's next few years. What works is usually three moves together:

1. Build a custom index of individual stocks: Pair the company stock with other assets in the portfolio. That lets us harvest losses throughout the year to offset gains as we trim, and we can exclude Tom's company and its closest competitors so we are not buying back the same risk.
2. Give the lowest basis shares to a donor advised fund: The embedded gain is never taxed, they deduct the full market value (subject to IRS limits), and Tom's final high income working year is the best time to do it. Grants can go out over time, which is a natural way to involve the kids.
3. Keep some of the lowest basis shares on purpose: Size the holding so the plan still works if the stock drops by half. When you pass, your heirs get a step up in basis and that embedded gain disappears for them.

The state exemption is $15 million per person in 2026, with a flat 12% tax above it. Unlike the federal rules, Connecticut does not let a surviving spouse pick up the unused exemption. If Tom and Kate leave everything to each other and the estate grows toward $20 million, the first spouse's exemption can be wasted.

The fix is usually a trust that takes effect at the first death and has to be in place before anyone needs it. Our Modern Trust Playbook covers the options. Rules vary widely by state, so check yours with your attorney.

Even Roth conversions change purpose at this level. Converting at 32% or 35% can make sense for their kids, who would otherwise have to empty an inherited IRA within 10 years, likely during their own peak earning years.

Some of the most common rules of thumb reverse as the portfolio grows:

It is the same couple with the same lifestyle and three completely different plans.

A bigger number does not make the plan easier. It changes the question. And you do not get to pick which version you end up with at 60. You shape it in your 40s and 50s, through what you do with your equity comp, how big you let one stock grow, and whether all your savings go pretax or you build flexibility across account types.

• Before: You assume a bigger balance means an easier plan. You follow advice built for someone else's numbers, let your company stock keep growing, and pour everything into pretax accounts without thinking about what that means at 60.
• After: You know which question your plan needs to answer. Your gap years have a conversion strategy, your concentrated stock has an exit plan, and your estate structure matches your state's rules. Your decisions today are shaping the retirement you actually want.

This is written for corporate executives and senior leaders in their 40s and 50s, with household income of $500,000 or more and complex compensation like RSUs, options, an ESPP, or deferred comp. If that is you, you are still in the window where your equity, your account mix, and your company stock can shape which retirement problem you will be solving at 60.

At Tailored Wealth, this is the work we do. We model your future across every account type, stress test your equity and tax decisions, and map out which problems you are likely to be solving at 60, so you can start shaping them now. We use professional planning software to run the scenarios that matter, like gap year Roth conversions, Medicare surcharge tradeoffs, concentrated stock exits, and state estate tax exposure.

Then our Quarterly Strategy Rhythm, the review cadence where we revisit your tax, equity, and cash flow plan every quarter, keeps the plan current as your income, equity, and goals change.

If you want to know which of these three plans could look like yours, and what you should be doing now to shape it, book a Free Wealth Strategy Call. It is a low-friction conversation about your numbers, your equity, and your timeline, not a sales pitch.