Let the cream cheese and butter sit at room temperature for about 30 minutes to soften.

In a mixing bowl, combine the softened cream cheese and butter. Beat on medium speed with an electric mixer until creamy.

Add the vanilla extract and mix on low speed until incorporated.

Gradually add the powdered sugar, one cup at a time, mixing on low speed until smooth and fluffy.

If the frosting is too thick, add 1 tablespoon of milk at a time until desired consistency is reached.

Increase the mixer speed to high and whip the frosting for 1-2 minutes to incorporate air and create a light texture.

Taste the frosting and adjust sweetness by adding more powdered sugar if desired.

Use the frosting immediately on cooled cakes or cupcakes, or store in an airtight container in the refrigerator for up to one week.