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Retirement Planning for High Income Earners

A lot of high earners are worried about their retirement. After all, while making a lot of money is great there is a big difference between making a lot of money and being truly wealthy. As famous writer and investor Robert Kiyosaki put it: The definition of wealth is the number of days you can survive without physically working (or anyone in your household physically working) and still maintain your standard of living.*

The Retirement Question

High-income earners good at making money, but they are also good at spending it. They have money flowing into their bank account on a regular basis, sure, but by the end of the month the balance sems to always be the same.

It's like trying to fill up a bathtub without plugging the drain.


However, High-earners enjoy living a nice lifestyle and enjoy having the nice things in their lives even if it means having to work harder and longer hours to afford them. After all, they are usually strong, in the middle of their best years, and feel like can always make more money.

High-earners cringe at the thought of having to live with less.

They don't want to have to change their lifestyle – now or when they retire.

But the truth of the matter is that even folks bringing in a high income today will want to stop working and retire some day. and unless they have something that pays for the high lifestyle when they are older even they will have to face the truth that they have to continue working after the “official” retirement age.

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And even if they own their own business, most business are not really a sellable asset or at least won't sell for enough to retire. And once they stop working their income will dry up almost immediately.

Sounds pretty bleak, right?

So what do high-income earners do then? Answer: They do what they do best: they work harder and earn more money… and the cycle repeats itself.

But at the end of the day, there is still not much to show in terms of long-term retirement funds.

prepare for retirement questions

High earners are often worried about retirement

And even though of course this above situation doesn't apply to every single high-income earner out there and some are planning diligently for their retirement, the sad fact is that too many high-salaried individuals find themselves in a vicious cycle of “earning just to spend” with no end in sight.

For good or for bad, it costs a lot of money to show the world that you have made a success of your personal life and career: the Mercedes, the big house, the fancy office – all are very expensive and along with a few nice vacations can quickly end up eating the majority of an individual’s net income.

Plus. the earn-to-spend cycle is exhausting, and after running in what I call the “The hamster wheel from Hell” for a while the frustrations start creeping in… and soon enough the collateral damage starts to appear.

vicious cycle of money

Are you trapped in a vicious cycle of earning to spend?

Now, it’s might not be a heart attack that leaves behind a grieving spouse and five kids; the collateral damage will more likely appear in the form of burnout, sickness, weight problems, and difficulties at home because the wage earner is never around.

Just to keep their current lifestyle, just to be able to pay for the expensive things, just to have the cars and “provide for the family”, some folks never see their family and accept the fact that they will never be able to truly retire – at least not without sacrificing their current lifestyle (BTW, this happens in all income classes, but it's particularly sad when it happens in the high-income segment where there are so many ways out)

And that is without even mentioning the true measure of success, which is happiness. After all, isn't all we do in life really behind it all designed to make us HAPPY?

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What kind of retirement are you planning for?

Ask yourself the following questions:

– Is your life – the way that you are living it right now – making you happy?

– Is your career – the way you are working right now – making you happy?

– Even if you love what you do, have you crafted a plan to be able to retire anytime you want?

– Even if you love what you do, have you ever even thought about how you will be able to keep your current lifestyle indefinitely?

Most people haven't seriously considered answered the above questions. Or even if they have thought about retirement, they might delude themselves into thinking that at some future point they will somehow make much more money than they do right now and will need less money to live on.

Based on common sense, how likely does that seem?

If you are falling into the category of High income, low net worth (other than the house) then chances are some of these above bullet points hit home.

But there is a solution.

How to enjoy the retirement you deserve

That solution is not working harder, it’s not about quitting their job (or getting a second job), and it’s not about cutting back and switching over to discount stores, coupon clipping and happy hour dinners.

Quite the contrary.

The answer is to take a part of the big money you earn and leverage that into separate streams of income. It's about creating streams of income that do not depend on trading hours for dollars and where there is no salary cap.

In other words, we’re talking about investing.

But not every type of investment is good for high-income earners or for retirement planning. Some investment vehicles have higher levels of risk, others are characterized by low returns, while others are safer and more profitable.

Here is a selection of the most popular investment vehicles along with their odd of success:

investing in stock market for retirement

Some people prepare for retirement by investing in the stock market


Investing in the Stock Market

For every investor who has become a millionaire by investing in the stock market, there are about a thousand who either lost money or barely made a profit. Are those really the odds that you want to plan your retirement on?





money market retirement account

Is a money market account good for retirement planning?


A Money Market account or Mutual Fund

A money market account maxes out at about 1% interest per year, and an average mutual fund will give you a return of 8-10%, BEFORE fees (which average over 3%) and Taxes, so you really just making 3-4% on that. Oh and that is on AVERAGE if you pick a good one which even meets that average. While it's true that you don’t have to work to see a return, that return on your investment (ROI) is incredibly low.





real estate retirement income

Real estate has been a tried and true retirement planning method

Real Estate

Real Estate has been around since there have been people living in towns. And it will be around for as long as there are people living in cities and towns. the US is estimated to double it's population in the next 30-40 years, and Real Estate will always be in demand. It's one of the few areas of investment which are MASSIVELY government subsidized with tons of tax write-offs. And to make things even better it's the ONE investment area that actually produces cash flow while appreciating in value. For those and several other reasons Real Estate is the One investment vehicle used by many high-income earners across the country to build wealth. Real estate investing – whether wholesaling, flipping, or buy-and-hold, can mean up to triple digit returns on your money.

How would your life and future retirement be different if you could exponentially increase your current earnings or retirement savings?

You need to break out of the cycle of earning more to spend more by learning leverage the money you already without sacrificing your lifestyle and turning your income into long lasting cash flow that will pay for your ever need. and not when you are 65 but now, when you still can an when you are still in your prime earning years.

You need to break out of the cycle of earning more to spend more Any additional stream of income that they create should be something which doesn’t require lots of time to manage. It should provide big returns and should create enough income to let them retire within a reasonably short time while keeping the lifestyle they have grown accustomed to.

For many high-income earners, the ideal way to prepare for their retirement and financial independence has proven to be not stocks, bonds, or mutual funds; the ideal way has been real estate investing. In particular, they have sought out methods that can be learned in a short time and that can start generating income within a few weeks or months of getting started.

Methods that allow them to take a fairly small amount of money (something they might just spend on a weekend in Vegas or Hawaii) and leverage that into a small additional fortune in a matter of a few years.

Click here to learn more about generating passive income

High-income earners are an incredibly important part of the American economy, but too many of them are carrying a heavy load with no end in sight.

If only they knew that there was a better way.

Robert Kiyosaki quote: http://www.richdad.com/Resources/Rich-Dad-Financial-Education-Blog/May-2013/the-definition-of-wealth.aspx