You've saved $2 million for retirement — but these 5 traps could be quietly devouring your nest egg

You've got $2 million saved for retirement — now you need to watch out for these 5 traps that'll devour your nest egg

If you've got $2 million tucked away for retirement, you're sitting well above where most Americans think they need to be.

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The average U.S. adult now pegs the " magic number " for a comfortable retirement at $1.46 million, according to Northwestern Mutual's latest retirement savings study — up sharply from the year before as inflation, longer lifespans and Social Security uncertainty push expectations higher. High-net-worth Americans set the bar even higher, at $2.67 million on average.

At this point, you've got savings on lock. But even $2.67 million could be insufficient if you're not thinking now about wealth preservation.

Shifting your perspective from building wealth to protecting it isn't easy. But the journey could be less treacherous if you avoid these five common money traps that high-net-worth individuals sometimes fall into. Here's what you need to know.

'Knowing your number' matters more than having one

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.

Lifestyle inflation — where your spending habits change with the size of your portfolio and paycheck — is a real risk. It's perhaps one of the reasons why only 36% of American millionaires, according to Northwestern Mutual's study (1), consider themselves "wealthy."

Many high-net-worth individuals haven't taken the time to plan their retirement budget and lifestyle needs. Nearly half of millionaires told Northwestern Mutual their financial planning could use improvement, and their top concerns center on the impact of taxes in retirement, the risk of outliving their savings and long-term care costs.

Don't fall into the same trap. And remember that you don't have to figure out your budget needs on your own — a financial advisor can help you craft a budget that you can stick to easily.

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