Sun Nov 23 2025, by Tyler Gardner

How to Manage $2.5 Million in Retirement for Lasting Wealth

I'm Tyler, a former financial advisor and portfolio manager. Now I make financial content for free so you don't have to pay for it.

1. Invest in Low-Cost ETFs

I would start by investing $1.8 million in a low-cost ETF that tracks the S&P 500, like Vanguard's VOO. Not only would I now own a piece of some of the world’s most profitable and stable companies, but I would also collect about $20,000 a year in dividends alone from the fund.

2. Allocate to Blue Chip Dividend Funds

Then I would invest $500,000 in a blue-chip dividend fund like Schwab's SCHD or Vanguard's VIG. This will slightly stabilize my portfolio by investing in more mature companies that have stood the test of time and continue to pay out dividends, which means another $20,000 from dividends alone.

3. Maintain Liquidity with Money Market Funds

Next, I would invest the remaining $200,000 (just under 10% of my portfolio) in a short-term money market fund like S-Gov for volatility mitigation and liquidity in down markets.

4. Strategic Withdrawals

However, I don’t want to live off of $40,000 a year net taxes. So on the second day of each month, I’d sell 0.5% of the VOO, netting another $90K or so post-tax. By drawing down only 6% per year, and knowing the market on average historically returns 7%, I’d have my cake while my portfolio eats it too.

5. Enjoying Retirement

Finally, I’d complement that $130,000 a year with a national average of $24,000 a year in Social Security, allowing me to live in Vermont on $150,000 a year—buying flannel in bulk, heating my house with pure maple syrup fumes, and entering my bloodhounds in every small-town Halloween parade dressed up as Ben and Jerry.

Conclusion

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