Beyond the Bell: 5 Crucial Money Lessons You Wish You Learned in School

Admin • June 16, 2023

We’ve all been there, scratching our heads when faced with real-world money decisions. This is especially true for high-income earners who face uniq ue financial challenges and opportunities.

Unfortunately, when it comes to personal finance, schools often miss out on teaching crucial lessons that can significantly impact your financial success. While schools may touch upon basic financial concepts, several valuable money lessons are frequently overlooked.

Why Financial Literacy Should Be Taught in Schools

Did you know that as of May 2023, only 20 high schools across the country require a personal finance class for graduation? In today’s complex and rapidly changing world, the need for teaching financial literacy has never been more evident. Yet, it remains a glaring gap in our traditional school curriculum. 

Teaching financial literacy in schools is essential because it equips students with the knowledge and skills they need to navigate the intricacies of the financial landscape, make informed decisions, and build a strong foundation for their financial well-being. 

By introducing topics such as budgeting, saving, investing, credit management, and financial planning, schools can empower students to take control of their financial futures and become responsible stewards of their money. 

In an era where financial decisions have far-reaching consequences, providing students with the tools and understanding to manage their finances effectively is practical and vital for their long-term success and financial independence. 

Below we’ll explore five crucial money lessons that aren’t typically taught in school but are essential to understand. 

5 Crucial Money Lessons You Wish You Learned in School

Applying these lessons can help you build a solid financial foundation and maximize your earnings.

1. Mindful Spending and Budgeting

One common trap that high-income earners can fall into is the temptation to increase their spending as their income rises. This phenomenon is known as “ lifestyle inflation .” While it’s natural to want to enjoy the fruits of your labor, it’s essential to be mindful of your spending habits. By adopting a mindful approach to spending, you can prioritize your financial goals and avoid falling into a cycle of perpetual consumption. Focus on aligning your spending with your values and long-term objectives rather than succumbing to societal pressures or the urge to keep up with others.

Having a budget empowers you to save, invest wisely, and avoid unnecessary debt. It’s a lifelong tool that enables financial stability and paves the way for achieving your goals. Creating a budget is like having a roadmap for your financial journey. It will help to ensure you are in control of your finances. Remember, the key to building wealth is not just about earning big, but also about making intentional choices with your money. 

2. Building and Protecting Wealth

Earning a strong income is one thing, but building and protecting your wealth is another. Through investing and building multiple streams of income, you can help protect your hard-earned dollars. 

Investing

Investing is a powerful tool for building wealth, yet it can often be a neglected aspect of personal finance. While it is tempting to focus on earning a high income, understanding the time value of money and starting to invest early is crucial. As a high-income earner, you have a unique opportunity to amass significant wealth through long-term investment strategies.

Take advantage of retirement accounts like 401(k)s, IRAs, or SEP-IRAs, and contribute the maximum amount allowed. Additionally, consider investing in low-cost index funds or diversified portfolios tailored to your risk tolerance and financial goals. At Five Pine Wealth Management , our financial advisors can work with you to create a diversified investment portfolio tailored to your risk tolerance and financial goals. 

Remember, time is your greatest ally in investing. The earlier you start, the more your money can compound and work for you. Compound interest may not be something taught in many schools, but it is vital to understand the magic of compound interest. Albert Einstein once said, “Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn’t … pays it.”

And remember, investing is a marathon, not a sprint. So lace up those investment shoes and get moving!

Building Multiple Income Streams

A high income is fantastic, but relying solely on one income source can be risky. Renowned investor Warren Buffet cautions that individuals should never rely on a single source of income, yet many people do . Building multiple income streams provides stability and gives you the potential to accelerate your wealth-building journey. 

Having multiple income streams also offers flexibility and freedom in managing your finances. In addition, it allows you to diversify your skills and interests, pursue entrepreneurial ventures, and explore new opportunities, which can lead to a more fulfilling and balanced professional life.

Consider investing in real estate, starting a side business, or generating passive income through investments. Diversifying your income creates a safety net and increases your financial resilience.

Understanding how to accumulate assets wisely and manage risk is essential. Protecting your income requires a proactive approach. Educate yourself on investment strategies, diversification, and risk management techniques. Work with financial advisors or wealth managers to develop a tailored plan that aligns with your long-term financial goals. By taking these steps, you can safeguard your income and maintain financial security, even in the face of unexpected events.

3. Estate Planning and Wealth Transfer

Estate planning is often regarded as a topic for later stages of life. Still, high-income earners should prioritize it early on. You’ll want to ensure the smooth transfer of wealth to future generations while minimizing estate taxes and legal complications. 

Educate yourself on wills, trusts, power of attorney, and healthcare directives. Seek guidance from estate planning professionals to develop a comprehensive plan that aligns with your wishes and safeguards your wealth. By addressing estate planning early, you can protect your assets and leave a lasting legacy.

4. Debt Management

Raise your hand if school taught you about strategic debt utilization and effective debt management. Yeah, I didn’t think so. But don’t worry, you’re not alone. As a high-wage earner, you may have acquired various types of debt over the years. 

High debt levels can lead to stress, limited financial flexibility, and restrict opportunities. If you are experiencing high debt, it’s time to take control. Learn about debt consolidation, refinancing, and interest rate optimization. Develop a plan to pay down high-interest debt while strategically using debt to grow wealth.

It’s time to flip the script and make debt work for you. Debt reduction not only frees up income that can be directed toward savings and investments but also provides a sense of accomplishment and peace of mind.

5. Tax Planning and Optimization

The more money you earn, the more complex your tax situation can become. Understanding tax planning strategies is crucial to maximizing your after-tax income. Educate yourself on legal ways to optimize taxes, such as exploring tax-efficient investments, retirement accounts, charitable contributions, and other deductions. 

Seek the advice of qualified professionals who can help you navigate the intricacies of the tax code. By strategically managing your taxes, you can retain more of your hard-earned money and accelerate your path to financial freedom.

Let Five Pine Wealth Management Help You

These five valuable money lessons should be part of your journey toward financial success. Financial literacy should be a priority for everyone, regardless of income level. Remember, it’s not just about us; it’s about future generations. By advocating for financial literacy in schools, we can equip young minds with the tools they need to navigate the complexities of personal finance. 

So, let’s join forces, spread the word, and empower ourselves and others to make smart money decisions. Together, we can create a financially savvy society where everyone has the opportunity to thrive. Schedule a meeting with Five Pine Wealth Management so we help you make the best decisions to grow and protect your finances. 

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You've Maxed Your 401(k). Now What? A Strategic Guide for High Earners

January 26, 2026
Key Takeaways High earners maxing out 401(k)s at $24,500 are only saving about 8% of a $300,000 income in their primary retirement account. The mega backdoor Roth strategy can increase total 401(k) contributions to $72,000 annually with tax-free growth. A comprehensive approach can create nearly $3 million in additional retirement wealth over 20 years. It's 2026. You're checking all the boxes. You're earning upwards of $300,000 annually, and you're maxing out your 401(k) every year. You've reached the $24,500 contribution limit and feel confident about securing your financial future. Then you realize $24,500 represents less than 8% of your income. Over 20 years, this gap adds up to millions in lost opportunity. Thankfully, you're not stuck with the basic 401(k) playbook. There are sophisticated strategies beyond your contribution limit. 5 Strategic Moves for High Earners with Maxed-Out 401(k)s Here are five sophisticated strategies that can help you build wealth beyond your basic 401(k) contributions. All projections assume a 7% average annual return and are estimates for illustrative purposes. 1. Mega Backdoor Roth Contributions If your employer's 401(k) plan allows after-tax contributions, this could be your biggest opportunity. With employee contributions, employer match, and after-tax contributions, the combined 401(k) limit for 2026 is $72,000 ($80,000 if you're 50 or older). The mega backdoor Roth works because you immediately convert those after-tax contributions into a Roth account, where they grow tax-free forever. The catch: Not all employers offer this option. You need a plan that permits after-tax contributions and in-service Roth conversions. The impact: The available space for after-tax contributions depends on your employer match. With a typical employer match of 3-6% (roughly $10,000-$21,000 on a $350,000 salary), you could contribute approximately $26,500-$37,000 annually. At 7% average returns over 20 years, this creates approximately $1.1-$1.5 million in additional tax-free retirement savings. 2. Donor-Advised Funds for Charitable Giving If you're charitably inclined, donor-advised funds (DAFs) offer a way to bunch several years of charitable contributions into one tax year, maximizing your itemized deductions while still spreading your giving over time. You get an immediate tax deduction for the full contribution, but you can recommend grants to charities over many years. The funds grow tax-free in the meantime. The catch: Once you contribute to a DAF, the money is irrevocably committed to charity. You can't get it back for personal use. The impact: Contributing $50,000 to a DAF in a high-income year (versus giving $10,000 annually) can create immediate federal tax savings of $15,000-$18,500 while still allowing you to support the same charities over five years. 3. Taxable Brokerage Accounts with Tax-Loss Harvesting Once you've maximized tax-advantaged accounts, strategic taxable investing becomes your next move. The key is working with a financial advisor who implements systematic tax-loss harvesting throughout the year. Tax-loss harvesting involves selling investments at a loss to offset capital gains elsewhere. Done strategically, this can save thousands in taxes annually. The catch: Long-term capital gain rates (0%, 15%, or 20%) are lower than ordinary income tax rates, but you're still paying taxes on gains. It's less tax-efficient than retirement accounts, but far better than ignoring tax optimization. The impact: For high earners in the 35-37% ordinary income brackets, the difference between long-term capital gains (20%) and ordinary rates is significant. Effective tax-loss harvesting on $50,000 in annual gains over 20 years could save $150,000+ in taxes. 4. Health Savings Account (HSA) Triple Tax Advantage HSAs offer a unique triple tax benefit: tax-deductible contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses. With 2026 contribution limits of $4,400 for individuals and $8,750 for families, this adds another powerful layer to your strategy. You can invest HSA funds just like an IRA and let them grow for decades. After age 65, you can withdraw the funds for any purpose, medical or otherwise. The catch: You must have a high-deductible health plan to qualify for an HSA. After age 65, non-medical withdrawals are taxed as ordinary income (like traditional IRA distributions), but you still benefit from the upfront deduction and decades of tax-free growth. The impact: Contributing the family maximum ($8,750) annually for 20 years at a 7% average annual return creates approximately $355,000-$360,000 in tax-advantaged savings. 5. Backdoor Roth IRA Contributions Not to be confused with mega backdoor Roth contributions! Even if your income exceeds the Roth IRA contribution limits, you can still fund a Roth through the backdoor method: make a non-deductible contribution to a traditional IRA, then immediately convert it to a Roth IRA. The catch: If you have existing traditional IRA balances, the pro-rata rule complicates things. You may want to consider rolling those funds into your 401(k) first if your plan allows. The impact: Contributing $7,000 annually through the backdoor Roth for 20 years at 7% average annual return creates approximately $285,000-$290,000 in tax-free retirement savings. What Compounding These Strategies Looks Like Over 20 Years Let’s look at approximate outcomes based on a 7% average annual return. 401(k) Only: Annual contribution: $24,500 Total after 20 years: ~$1M 401(k) + Mega Backdoor Roth: Annual contribution: $72,000 Total after 20 years: ~$3M Note: Mega backdoor Roth space varies based on your employer's match. These calculations assume you're maximizing the total annual limit. Comprehensive Approach (under age 50): Mega Backdoor Roth: ~$3.0M HSA: ~$350K-$360K Backdoor Roth IRA: ~$285K-$290K Strategic taxable investing with tax-loss harvesting Total retirement savings: ~$3.6M+, plus taxable investments Comprehensive Approach (ages 50-59): With higher contribution limits and catch-up contributions, total retirement savings can reach ~$4M+ over 20 years. Comprehensive Approach (ages 60–63 with enhanced catch-up contributions) Higher contribution limits during peak earning years allow for meaningful acceleration of retirement savings. The exact impact depends on timing, contribution duration, and existing balances. The Bottom Line The difference between stopping at your basic 401(k) and implementing a comprehensive strategy can approach $3 million or more in additional retirement wealth over time. Why Strategic Coordination Matters These aren't either/or decisions. The most effective approach coordinates multiple strategies while ensuring everything works together. At Five Pine Wealth Management , we help high-earning clients build comprehensive plans that go beyond the 401(k). We coordinate your employer benefits, tax strategies, and investment accounts to create a cohesive approach that maximizes your wealth-building potential. This requires working across several areas: Analyzing your employer's 401(k) plan for mega backdoor Roth opportunities Implementing systematic tax-loss harvesting in taxable accounts Coordinating Roth conversions and backdoor contributions Optimizing your HSA as a long-term retirement vehicle Ensuring charitable giving strategies align with your tax situation Maximizing catch-up contributions when you reach milestone ages As fiduciary advisors, we're legally obligated to act in your best interest. That means we're focused on strategies that serve your goals, not products that generate commissions. Ready to see what's possible beyond your 401(k)? Email us at info@fivepinewealth.com or call 877.333.1015 to schedule a conversation about your specific situation. Frequently Asked Questions (FAQs) Q: Does my employer's 401(k) plan automatically allow mega backdoor Roth contributions? A: No. You need a plan that permits after-tax contributions and in-service conversions to Roth. Check with your HR department. Q: How do I prioritize which investment strategies to use? A: Generally, maximize employer match first (it's free money), then fully fund your 401(k), explore Mega Backdoor Roth if available, max out your HSA, consider backdoor Roth IRA contributions, and then move to taxable accounts with tax-loss harvesting. We can help determine the right sequence for your circumstances.

What's the Best Asset Allocation for Someone 10 Years Away from Retirement?

December 22, 2025
Key Takeaways Your guaranteed income sources (pensions, Social Security) matter more than your age when deciding allocation. Retiring at 65 doesn't mean your timeline ends. You likely have 20-30 years of investing ahead. Think in time buckets: near-term stability, mid-term balance, long-term growth. You're 55 years old with over a million dollars saved for retirement. Your 401(k) statements arrive each month, and you find yourself questioning whether your current allocation still makes sense. Should you be moving everything to bonds? Keeping it all in stocks? Something in between? There's no single "correct" asset allocation for everyone in this position. What works for you depends on factors unique to your situation: your retirement income sources, spending needs, and risk tolerance. Let's look at what matters most as you approach this major life transition. Why Asset Allocation Changes as Retirement Approaches When you’re 30 or 40, your investment timeline stretches decades into the future. When you’re 55 and looking to retire at 65, that equation changes because you’re no longer just building wealth: you’re preparing to start spending it. You need enough growth to keep pace with inflation and fund decades of retirement, but you also need stability to avoid the need to sell investments during market downturns. At this point, asset allocation 10 years before retirement is more nuanced than a simple “more conservative” approach. Understanding Your Actual Time Horizon Hitting retirement age doesn't make your investment timeline shrink to zero. If you retire at 65 and live to 90, that's a 25-year investment horizon. Think about your money in buckets based on when you'll need it: Time Horizon Investment Approach Example Needs Short-Term (Years 1-5 of Retirement) Stable & accessible funds Monthly living expenses, healthcare costs, and early travel plans Medium-Term (Years 6-15) Moderate risk; balanced growth Home repairs, care and income replacement, and helping grandchildren with college Long-Term (Years 16+) Growth-oriented with a Long-term care expenses, decades-long timeline legacy planning, and extended longevity needs This bucket approach helps you think beyond simple stock-versus-bond percentages. Asset Allocation 10 Years Before Retirement: Starting Points While there's no one-size-fits-all answer, here are some reasonable starting frameworks: Conservative Approach (60% stocks / 40% bonds) : Makes sense if you have minimal guaranteed income or plan to begin drawing heavily from your portfolio upon retirement. Moderate Approach (70% stocks / 30% bonds) : Works well for those with some guaranteed income sources, moderate risk tolerance, and a flexible withdrawal strategy. Growth-Oriented Approach (80% stocks / 20% bonds) : Can be appropriate if you have substantial guaranteed income covering basic expenses and the flexibility to reduce spending temporarily as needed. Remember, these are starting points for discussion, not recommendations. 3 Steps to Evaluate Your Current Allocation Ready to see if your current allocation still makes sense? Here's how to start: Step 1: Calculate your current stock/bond split. Pull your recent statements and add up everything in stocks (including mutual funds and ETFs) versus bonds. Divide each by your total portfolio to get percentages. Step 2: List your guaranteed retirement income. Write down income sources that aren't portfolio-dependent: Social Security (estimate at ssa.gov), pensions, annuities, rental income, or planned part-time work. Total the monthly amount. Step 3: Calculate your coverage gap. Estimate monthly retirement expenses, then subtract your guaranteed income. If guaranteed income covers 70-80%+ of expenses, you can be more growth-oriented. Under 50% coverage means you'll need a more balanced approach. When to Adjust Your Allocation Here are specific triggers that signal it's time to review and potentially adjust: Your allocation has drifted more than 5% from target. If you started at 70/30 stocks to bonds and market movements have pushed you to 77/23, it's time to rebalance back to your target. Your retirement timeline changes significantly. Planning to retire at 60 instead of 65? That's a trigger. Every two years of timeline shift warrants a fresh look at your allocation. Major health changes occur. A serious diagnosis that changes your life expectancy or healthcare costs should prompt an allocation review. You gain or lose a guaranteed income source. Inheriting a pension through remarriage, losing expected Social Security benefits through divorce, or discovering your pension is underfunded. Market volatility affects your sleep. If you're checking your portfolio daily and feeling genuine anxiety about normal market movements, your allocation might be too aggressive for your comfort, and that's a valid reason to adjust. Beyond Stocks and Bonds Modern retirement planning involves more than just deciding your stock-to-bond ratio. Consider international diversification (20-30% of your stock allocation), real estate exposure through REITs, cash reserves covering 1-2 years of spending, and income-producing investments such as dividend-paying stocks. The Biggest Mistake: Becoming Too Conservative Too Soon Moving everything to bonds at 55 might feel safer, but it creates two significant problems. First, you're almost guaranteeing that inflation will outpace your returns over a 30-year retirement. Second, you're missing a decade of potential growth during your peak earning and saving years. The difference between 60% and 80% stock allocation over 10 years can mean hundreds of thousands of dollars in portfolio value. Being too conservative can be just as risky as being too aggressive, just in different ways. Questions to Ask Yourself As you think about your asset allocation for the next 10 years: What percentage of my retirement spending will be covered by Social Security, pensions, or other guaranteed income? How flexible is my retirement budget? Could I reduce spending by 10-20% during a market downturn? What's my emotional reaction to seeing my portfolio drop 20% or more? Do I plan to leave money to heirs, or is my goal to spend most of it during retirement? Your honest answers to these questions matter more than your age or any generic allocation rule. Work With Professionals Who Understand Your Complete Picture At Five Pine Wealth Management, we help clients work through these decisions by looking at their complete financial picture. We stress-test different allocation strategies against various market scenarios, coordinate withdrawal strategies with tax planning, and help clients understand the trade-offs between different approaches. If you're within 10 years of retirement and wondering whether your current allocation still makes sense, let's talk. Email us at info@fivepinewealth.com or call 877.333.1015 to schedule a conversation. Frequently Asked Questions (FAQs) Q: What is the rule of thumb for asset allocation by age? A: Traditional rules like "subtract your age from 100" are oversimplified. Your allocation should be based on your guaranteed income sources, spending flexibility, and risk tolerance; not just your age. Q: Should I move my 401(k) to bonds before retirement? A: Not entirely. You still need growth to outpace inflation. Gradually shift toward a balanced allocation (60-80% stocks, depending on your situation) and keep 1-2 years of expenses in stable investments. Q: What's the difference between stocks and bonds in a retirement portfolio?  A: Stocks provide growth potential to keep pace with inflation but come with volatility. Bonds offer stability and income but typically don't grow as much.