High-Net-Worth Retirement Planning Guide

For anyone who anticipates retiring one day, planning is critical. This means saving throughout your career, calculating your future Social Security benefits and anticipating your expenses in retirement. For high-net-worth individuals, meaning those with at least $1 million in cash or investable assets, this planning process can become even more complex. Here’s a breakdown of how you should plan for your golden years if you’re considered a high-net-worth individual, including steps to maximize this time of your life.

Beyond these strategies, consider enlisting a financial advisor to tailor a retirement plan that’s right for you.

What Is Considered High Net Worth in Retirement?

A high-net-worth individual (HNWI) is typically defined as someone with at least $1 million in liquid or easily convertible assets, such as cash, stocks, bonds, or mutual funds. The U.S. Securities and Exchange Commission (SEC), however, uses a different standard in its Form ADV documentation. Under SEC rules, a person generally qualifies as a HNWI client if they have at least $1.1 million in assets managed by an advisor or a net worth exceeding $2.2 million, excluding their primary residence.

Reaching this level of wealth often provides access to specialized financial services, investment products and advisory relationships designed for individuals with larger portfolios.

High-Net-Worth Retirement Planning: 6 Essential Steps to Take

Let’s take a look at some steps you may consider when planning for retirement as a HNWI.

1. Calculate How Much You Need to Save

Retirement means you’ll no longer receive a regular paycheck for full-time work. As a result, you’ll need to have a significant sum saved to cover your expenses and fund your lifestyle. But how much?

Everyone’s answer to this question will be different. It depends on a number of variables, including your fixed monthly expenses, discretionary spending, location, retirement income streams and life expectancy. Coming up with a solid estimate is key to determining just how large of a nest egg you’ll need to build.

Keep in mind, however, that spending in retirement often doesn’t remain static. Researchers at the Center for Retirement Research at Boston College found that household consumption falls each year by an average of 0.75% to 0.80% for retirees, reaching double digits 20 years into retirement. ¹

Then again, wealthier retirees typically don’t reduce their spending as much as others, the study found. Of the retirees sampled in the CRR study, the wealthiest reduced their consumption by only 0.35% per year, while those in the middle and bottom brackets required more dramatic declines in consumption. As a HNWI, you may anticipate your annual spending falling by just 10% over the course of a 25-year retirement.

After calculating your monthly expenses and projecting your post-retirement consumption rates, you’ll also need to have a sense of how long you may live. This may feel uncomfortable, and even a bit morbid, but knowing how many years of retirement you need to fund is a vital part of the equation. The good news is it’s relatively easy to estimate using the Social Security Administration’s Life Expectancy Calculator. ²

Taking consumption trends, life expectancy and your individual spending habits into account, you should be able to calculate an accurate savings goal.

2. Max Out Your Retirement Accounts

Whether or not you’ve begun seriously planning for retirement, contributing to a retirement account is a must. As a high-net-worth individual who presumably earns a substantial income, you should max out your employer-sponsored plan as well as an IRA. Even if your income precludes you from deducting these contributions from your paycheck, your investment earnings will still grow tax-free.

For 2026, you can contribute up to $24,500 to a 401(k) and $7,500 to an IRA. ³ Additionally, those 50 and up may make additional catch-up contributions of $8,000 to a 401(k) and $1,100 to an IRA. In addition, those ages 60 to 63 can make a special 401(k) “super catch-up.” This is equal to the greater of $10,000 or 150% of the standard catch-up.

Keep in mind, you won’t be able to deduct your IRA contributions from your income in 2026 if you already have access to a workplace retirement plan, file single and make over $91,000. Married couples who file jointly cannot deduct IRA contributions if their combined income exceeds $149,000 and one or both spouses have access to a workplace retirement plan.

However, a non-deductible IRA can still be a practical way to save for retirement, offering tax-deferred growth that can complement a maxed-out 401(k). Some higher-income earners may also use this approach as part of a backdoor Roth IRA strategy.

3. Plan for Medical Expenses

Beyond housing, travel and the other typical expenses, health care is another vital area you must also consider.

Researchers from the Employee Benefit Research Institute (EBRI) recently calculated the savings that different retirees need to cover the cost of various medical expenses in retirement, including Medicare Parts B and D premiums, Part B deductibles, Medigap Plan G premiums and out-of-pocket prescription drug spending. The study found that a married couple enrolled in a Medigap Plan with average premiums would need $366,000 to have a 90% chance of covering health-care costs in retirement. Meanwhile, couples with particularly high prescription drug expenses may need up to $428,000.

People who spend less on prescription drugs can get by with lower, though still substantial, savings. A 65-year-old man with median drug expenses would need $191,000 to have a 90% chance of covering medical expenses throughout retirement. ⁴ Meanwhile, a 65-year-old woman would need $226,000, given women’s longer life expectancy.

These findings underline the importance of saving for these eventual costs. Contributing to a health savings account (HSA) is one way to do so in a tax-efficient manner. While only available to people enrolled in high-deductible health plans, they can help save for medical expenses and serve as long-term savings vehicles for retirement. That’s because you can typically invest a portion of your HSA balance in mutual funds, stocks and other assets. As an added bonus, you won’t owe tax on your investment gains.

As a high-net-worth individual, you should consider making the maximum contribution to an HSA, if you have access to one. In 2026, the IRS allows individuals to contribute up to $4,400 ($8,750 for families).

4. Factor in Long-Term Care

Your personal care needs in retirement may go beyond traditional health care. Medicare generally does not cover long-term care, like homemaker services and home health aides. These services can be costly and severely eat into your retirement savings.

For instance, the national median cost of homemaker services in 2025 was $6,292 per month, according to Genworth’s Cost of Care Survey. Meanwhile, the median monthly cost of an assisted living facility is $5,900, while a private room at a nursing home is approximately $10,600. ⁵

The good news is that not everyone will require this type of care. CRR data indicates that around 17% of retirees won’t need any long-term care. Still, approximately a quarter of retirees will have severe needs, with the remaining needing either minimal or moderate care.

Long-term care insurance can help blunt the financial blow of these expenses. Then again, you may be able to absorb the cost of long-term care without insurance, depending on your level of wealth.

5. Minimize Your Tax Liability

Optimizing your tax strategy is an important element of an effective retirement plan. By doing so, you’ll have more money to spend in retirement or to leave to loved ones.

One strategy is converting your traditional IRA into a Roth account. While 401(k) plans and traditional IRAs are subject to required minimum distributions (RMDs), Roth IRAs are not. However, the IRS bars individuals who earn more than $168,000 ($252,000 for couples who file jointly) in 2026 from contributing to a Roth IRA. As such, you’ll need to convert your traditional IRA into a Roth account using a backdoor Roth conversion. While you’ll pay income taxes on the money in the year you complete the conversion, you won’t have to start withdrawing the money at age 73 with RMDs. Instead, your money can stay invested for as long as you like. In fact, you can simply pass the account on to beneficiaries as part of your estate.

For a retiree with a traditional IRA or 401(k), a qualified charitable distribution (QCD) can be a particularly effective way to avoid paying taxes on RMDs. Instead of making the required annual withdrawals from your IRA, you can donate the money to charitable organizations using a QCD. This can be especially useful for retirees who already make charitable donations. Rather than donating money that’s already been taxed, a QCD allows you to send pretax dollars to an eligible charity while still satisfying RMD obligations. Note that QCDs are not available within 401(k) and 403(b) plans, though. You’ll need to roll over assets from these accounts into a traditional IRA to complete a QCD.

Lastly, for high-net-worth individuals who live in high-tax areas, another option is relocating to a state that does not tax income. Florida, for example, is a haven for retirees. It does not tax wages, retirement income or Social Security. Beyond Florida, the following states either have no state income tax, do not tax retirement income or offer significant tax deduction on retirement income:

• Alaska
• Georgia
• Mississippi
• Nevada
• South Dakota
• Wyoming

6. Create an Estate Plan

It’s also important to consider what happens to your assets when you’re gone. That’s where estate planning enters the equation. Estate planning is the process of arranging how your assets and property will be distributed upon your death.

As a high-net-worth individual, your financial situation will likely require more than just a standard will. Setting up a trust can protect your assets from creditors, reduce your estate’s tax liability and enable you to place restrictions or conditions for how your assets are passed to beneficiaries. A trust can also help your beneficiaries avoid probate, a legal proceeding by which a deceased person’s will is validated by a court. This process can be lengthy and the legal fees involved can chip away at a decedent’s estate.

The type of trust you choose to establish will depend on your specific needs. For example, a charitable trust can be created specifically for the purpose of charitable giving. An A/B or bypass trust allows a married couple to split their assets between two trusts and avoid estate taxes.

While there are many different types of trusts, they all must name a trustee who will oversee the trust for you. As the grantor (the person creating the trust), you may also serve as the trustee if the trust is revocable. However, if you create an irrevocable trust (one that cannot be changed once it’s created), you’ll need to appoint someone else as your trustee. All trusts also must name beneficiaries, the people who are in line to receive assets or property from the trust.

The process of setting up a trust is generally more involved than writing a simple will. Working with an estate planning attorney or financial advisor who specializes in estate planning can be helpful.

Investment Strategy for High-Net-Worth Retirees

Accumulating wealth and managing wealth in retirement are two different skills. The investment approach that worked during your earning years typically needs to shift once regular paychecks stop and portfolio withdrawals begin.

The central challenge in this shift is generating enough income to fund spending while keeping assets positioned to last 20 to 30 years or longer. A portfolio weighted too heavily toward cash and bonds loses purchasing power to inflation over time. One tilted too far toward equities exposes a retiree to sequence of returns risk, where a steep market decline in the first few years of retirement can permanently reduce the portfolio’s ability to sustain withdrawals even if markets eventually recover.

Many wealth managers use a bucket approach to manage this tension. Near-term living expenses sit in cash or short-term bonds. This allows for withdrawals without requiring asset sales during a downturn. Meanwhile, a middle layer of bonds and income-producing equities replenishes that buffer over time. A long-term growth layer, typically containing equities and alternatives, compounds over a decade or more before it is touched.

At the high-net-worth level, alternative investments become both more accessible and more relevant to portfolio construction. Private equity, private credit, hedge funds and real estate can offer return profiles and diversification that traditional stocks and bonds alone cannot provide. These asset classes generally require accredited investor status, carry higher minimums and lock up capital for longer periods. Still, for a retiree with $2 million or more in investable assets, a measured allocation to alternatives can reduce dependence on public market performance.

It’s also worth keeping in mind that where assets are held matters just as much as which assets are held. Tax-inefficient holdings that generate ordinary income, such as taxable bonds and actively managed funds, generally belong in tax-deferred accounts where that income is not taxed annually. Growth-oriented and tax-efficient holdings, in contrast, belong in taxable accounts where long-term capital gains rates apply. Roth accounts are best reserved for the highest-growth assets, since qualified withdrawals are tax-free entirely.

Municipal bonds warrant specific attention for retirees in higher federal tax brackets. Because muni interest is generally exempt from federal income tax, the after-tax yield on a quality municipal bond frequently exceeds that of a comparable taxable bond for investors in the 32% bracket and above. The math becomes even more favorable in high-tax states.

Dividend growth strategies offer another way to generate retirement income without selling shares. A portfolio of companies with long records of growing their dividends produces an income stream that tends to outpace inflation over time. Qualified dividends are also taxed at long-term capital gains rates rather than ordinary income rates. This makes them more tax-efficient than bond interest for the same dollar of income received.

Finally, the sequence in which accounts are drawn down over retirement affects both longevity and what passes to heirs. Drawing from taxable accounts first, then tax-deferred accounts, then Roth accounts is a common starting framework. That said, the right sequence ultimately depends on current and projected tax brackets, RMD timing and estate planning goals.

Social Security Strategy for High-Net-Worth Individuals

For most retirees, Social Security benefits anchor their income plan. For high-net-worth individuals, the decision is more layered. As a result, the straightforward advice to delay until age 70 does not apply uniformly.

Taxation is the starting point for deciding when to start taking benefits. Retirees with substantial income from portfolios, pensions or part-time work may have up to 85% of their Social Security benefit included in taxable income. For someone already drawing from a large traditional IRA and managing other income sources, adding Social Security can push a meaningful portion of total income into a higher bracket. This can reduce the net value of the benefit more than most people anticipate when they first run the numbers.

IRMAA compounds the issue. Medicare Part B and Part D premiums are based on income reported two years earlier, and higher-income retirees pay surcharges that can add thousands of dollars per year to healthcare costs. The year a retiree begins Social Security, starts RMDs or completes a large Roth conversion can trigger a higher IRMAA tier that persists for the following two years. Coordinating the timing of these income events requires planning that goes well beyond simply picking a Social Security start date.

Despite these complications, delaying Social Security to age 70 remains worth serious consideration for many high-net-worth retirees. The benefit grows by roughly 8% for each year of delay past full retirement age. That larger base amount applies to every future cost-of-living adjustment as well. A retiree who lives into their mid-80s or beyond typically comes out ahead by waiting, even after accounting for the years of foregone payments.

The survivor benefit argument for delay is often even more compelling than the personal break-even calculation. For married couples, the higher earner’s benefit sets the floor for what the surviving spouse collects after the first death. Maximizing that benefit through delay provides a form of longevity protection that no portfolio asset can replicate. This is particularly important when the surviving spouse is oldest and most vulnerable to outliving their savings.

Bottom Line

Planning for retirement can be a complicated and extensive process. And if you’re fortunate enough to have a high net worth, you’ll want to spend even more time planning. An effective high-net-worth retirement plan includes calculating the savings you’ll need to support your lifestyle, optimizing your tax strategy, planning for medical care and long-term care, maxing out your retirement accounts and creating an estate plan that protects your assets.

Retirement Planning Tips

• Sometimes it pays to have a professional in your corner. A financial advisor can help you plan for the future and act in your best interests. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
• It’s important to gauge your progress from time to time. SmartAsset’s retirement calculator can help you determine whether you’re on track to hit your savings goals by estimating how much money you’ll have by the time you’re ready to retire.
• While annuities are sometimes maligned for being complex and expensive, they can offer a guaranteed stream of income in retirement and superior peace of mind. The SECURE Act of 2019 made it easier for the sponsors of 401(k)s and other retirement plans to offer annuities as investments. This has led to a steady stream of financial institutions rolling out annuity products that are embedded in 401(k)s.

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