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Retirement Roadmap: 9 Key Steps for High-Income Earners to Maximize Their Working Years

Retirement

What are you doing with your 1.26 billion seconds during your working years?

Those 1,262,304,000 seconds—about 40 years—can be used to set up a solid financial foundation for a successful retirement at 65. Here’s a broad roadmap to make the most of that time:

1. Invest in Knowledge (First 5 Years)

  • Learn About Personal Finance: Use the early years to dive into personal finance basics—budgeting, debt management, investing, and tax planning. The more you understand these concepts, the better decisions you can make over the years.
  • Develop a Clear Vision of Retirement: Define your retirement goals, lifestyle expectations, and the kind of financial security you’ll need. This will shape your long-term plan and motivate your savings efforts.

2. Create and Stick to a Solid Budget (Ongoing)

  • Prioritize Saving and Investing: Dedicate a significant part of your income to savings and investment. Aim to set aside at least 15-20% of your income in retirement accounts, like a 401(k) or IRA, from the start.
  • Build an Emergency Fund: Secure enough liquid cash to cover 3-6 months’ expenses. This ensures you don’t have to tap into your retirement savings when life throws curveballs.
  • Pay Off High-Interest Debt: Pay off any debt with high interest rates as soon as possible to prevent them from slowing your progress.

3. Take Advantage of Tax-Advantaged Accounts (Start ASAP)

  • Fund a Roth 401(k): If you have access to an employer-sponsored retirement plan, take full advantage of it. Especially if your employer offers matching, it’s essentially free money for your retirement.
  • Fund a Roth IRA if Possible: Since you pay taxes upfront, Roth IRA contributions grow tax-free, giving you more freedom in retirement when you want to avoid additional tax burdens on withdrawals.

4. Invest Consistently and Wisely (30-40 Years)

  • Create a Long-Term Investment Strategy: Aim for a balanced portfolio that grows with you over time. When you’re younger, take advantage of stocks and other high-growth options, but gradually shift to more conservative investments as you approach retirement.
  • Rebalance Your Portfolio Regularly: At least once a year, adjust your investments to stay aligned with your goals and risk tolerance. As you near retirement, a heavier focus on income-generating assets (like bonds) may make sense.

5. Embrace Lifestyle Adjustments and Smart Spending (All 40 Years)

  • Live Below Your Means: A modest lifestyle lets you save more, reduces stress, and builds a solid financial position over time.
  • Avoid Lifestyle Inflation: Even as income increases, resist the urge to increase spending proportionally. Instead, funnel those raises or bonuses into savings and investments to accelerate your path to retirement.

6. Plan for Healthcare and Insurance (40s-50s)

  • Consider Long-Term Care Insurance: Long-term care can drain retirement savings quickly. Planning for it can give you peace of mind and help secure your savings.
  • Make Health a Priority: Focusing on physical and mental wellness throughout your working years can reduce future healthcare costs, potentially saving a large chunk of your retirement savings.

7. Diversify and Explore Passive Income Streams (40s-50s)

  • Look Into Real Estate or Side Investments: Real estate, dividends, and other passive income sources can add to your nest egg and create multiple income streams in retirement.
  • Start a Small Business: If you’re passionate about something, turning it into a side business can give you extra income and purpose in retirement.

8. Develop a Retirement Drawdown Plan (60-65)

  • Strategize for Tax-Efficient Withdrawals: Plan how to draw from taxable, tax-deferred, and tax-free accounts to minimize your tax burden.
  • Assess Your Expenses and Make Adjustments: Take a realistic look at your retirement budget, considering inflation and any new expenses that might arise.

9. Prepare for the Unexpected (All 40 Years)

  • Stay Flexible with Your Plans: Life rarely goes according to plan, so keep your finances agile. Adjust your savings, lifestyle, and investments as needed, especially if unexpected expenses or career changes arise.

By managing your 1.26 billion seconds with intention, you can turn consistent, well-thought-out efforts into a retirement that reflects your hard work and goals.

We plan for our working clients by taking complex situations and creating an easy-to-follow roadmap.

As always, check out our website and blogs for more info on these strategies.  

About Chris

Chris Heisten is the President and Founder of Heisten Financial LLC, a fee-only financial planning firm focusing on giving clients back their time so they can spend it doing what’s most important to them. Acting as a true fiduciary for his clients, Chris aims to solve their financial pain points by incorporating tax planning saving strategies and moving them toward financial freedom. In the financial industry since 2007, Chris has partnered with families with the same questions and complexities as he and his family. He guides the journey through life, striving to instill calmness and a sense of direction as he simplifies the complex. He loves seeing clients experience relief when they achieve what they thought was impossible.

Chris graduated from the University of Maine, where he played hockey on a scholarship, and retired from professional hockey in 2007. In the community, he remains engaged, serving as a youth hockey coach. Chris holds the CERTIFIED FINANCIAL PLANNER™. Outside the office, he enjoys trying new food and wine, reading, traveling, playing golf and hockey, fat tire biking, and donating to local charities. His passions include being a husband and dad, lake life with the family, watching his son and daughter play sports, and spending time with his wife. To learn more about Chris, connect with him on LinkedIn.