How Far Does a Million Really Go Today?

In an era when a million dollars might seem like the ultimate financial goal, it’s important to take a closer look at what that really means today compared to the past. May 20th is National Be a Millionaire Day — which may inspire dreams of luxury and financial freedom, but as we’ve come to find, being a millionaire isn’t what it used to be.

Do you remember the book “The Millionaire Next Door”? Published in 1996, this book emphasized the power of saving and the magic of compound interest. It provided stories of regular people who, through smart financial habits, saw their wealth grow without any flashy investments or high-stakes risks.

Fast forward to today, and things have shifted.

What once seemed like a lofty sum now only feels like a stepping stone to financial security for some. Inflation and changes in the economic environment have significantly eroded the purchasing power of a million dollars in just a few decades.

Let’s dive into the numbers a bit.

How Inflation and Other Economic Factors Have Impacted Buying Power

If we adjust for inflation, the value of a million dollars in 1996 is roughly half of that today.

That puts a whole new perspective on reaching that seven-figure milestone. It’s no wonder many of us find the concept of being a millionaire today less exhilarating than it once was.

In my practice, it’s clear how these economic changes impact our perceptions and realities of wealth.

Most of my clients are technically millionaires, but does that designation carry the weight it once did?

Not quite.

Many express concerns about whether their savings will get them through their retirement years, especially as they start to draw down on those funds and consider the prospect of long-term care. The idea of taking out $100,000 annually from a million-dollar nest egg is daunting; the math simply doesn’t work as comfortably as it once might have.

People are also living longer, meaning their retirement savings may need to support them for 25+ years rather than 15.

Concerns For Today's Retiring Millionaires

So, what does it mean to be a millionaire today?

It’s more than just having a million dollars in the bank. It’s about understanding the complexities of today’s economics, recognizing the limitations of what that money can do, and planning for the future.

As we think about this, it’s clear that achieving this status is more common than in 1996, but it also comes with greater complexity. Back then, the “millionaire next door” might not have needed to rely heavily on their savings for daily living. Today, however, the situation is quite different. The challenge for modern millionaires is not just reaching that milestone but managing it effectively to ensure it lasts — potentially for up to 30 years of retirement.

This is where we, as financial advocate attorneys, come into play. We specialize in helping clients navigate these complexities to ensure their wealth not only lasts until the day they die, but that they leave a legacy for their families as well.