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.


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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.

Rebuilding Wealth After Divorce: A Complete Guide to Your Financial Fresh Start

November 21, 2025
Key Takeaways Divorced spouses married 10+ years can claim Social Security benefits based on their ex’s record without reducing anyone else's benefits. Splitting retirement accounts requires specific legal documents (QDROs for 401(k)s) drafted precisely to your plan's requirements. Investment properties and taxable accounts carry hidden tax liabilities that significantly reduce their actual value. No one gets married planning for divorce. Yet here you are, facing a fresh financial start you never wanted. Maybe you’re 43 with two kids and suddenly managing on your own. Or you’re 56, staring down retirement in a decade, wondering how you’ll catch up after splitting assets down the middle. We get it. Divorce is brutal, emotionally and financially. And the financial piece often feels overwhelming when you're still processing everything else. According to research , women's household income drops by an average of 41% after divorce, while men's falls by about 23%. Those aren't just statistics. They're the reality many of our clients face when they first come to us. But here's something we've seen time and again: While you can't control what happened, you absolutely can control what happens next. Financial planning after divorce isn't just damage control. With the right approach, it can be the beginning of a more intentional and empowered relationship with your money. Here’s how to get there: First, Understand What You’re Working With Before you can move forward, you need a clear picture of your current financial situation. Start by gathering every financial document related to your divorce settlement: property division agreements, retirement account splits, alimony or child support arrangements, and any debt you’re responsible for. Then create a simple inventory: What you have: Bank account balances Investment and retirement accounts Home equity Expected alimony or child support income What you owe: Mortgage or rent obligations Credit card debt Car loans Student loans This baseline gives you something concrete to work with. You can't build a plan without knowing where you're starting from. Social Security Benefits for Divorced Spouses This one surprises people. If you were married for at least 10 years, you may be entitled to benefits based on your ex-spouse's work record, even if they've remarried. You can claim benefits based on your ex’s record if: Your marriage lasted 10+ years You’re currently unmarried You’re 62+ years old Your ex-spouse is eligible for Social Security benefits The benefit you can receive is up to 50% of your ex-spouse’s full retirement benefit if you wait until full retirement age to claim. Importantly, claiming benefits on your ex’s record doesn’t reduce their benefits or their current spouse’s benefits. If you’re eligible for both your own benefits and your ex’s, Social Security will automatically pay whichever amount is higher. What About Splitting Retirement Accounts in Divorce? Retirement accounts often represent one of the largest assets in a divorce settlement. Understanding how to handle the division properly can save you thousands in taxes and penalties. The QDRO Process For 401(k)s and most employer-sponsored retirement plans, you’ll need a Qualified Domestic Relations Order (QDRO). This legal document outlines the plan administrator's instructions for splitting the account without triggering early withdrawal penalties. QDROs must be drafted precisely according to both your divorce decree and the specific plan’s rules and requirements. We’ve seen clients lose thousands of dollars because their QDRO wasn’t accepted and had to be redrafted. Work with an attorney who specializes in QDROs. The upfront cost will be worth it to avoid expensive problems later. What About IRAs? Traditional and Roth IRAs can be split through your divorce decree without a QDRO. The transfer must be made directly from one IRA to another (not withdrawn or deposited) to avoid taxes and penalties. Tax Implications to Consider When you receive retirement assets in a divorce, you’re getting the account value and its future tax liability. A $200k traditional 401(k) isn’t worth the same as $200k in a Roth IRA or home equity, because of the different tax treatments. Many settlements divide assets dollar-for-dollar without considering how those dollars are taxed, so make sure yours addresses these differences. Dividing Investment Properties and Taxable Accounts Retirement accounts aren’t the only assets that require careful handling. If you own real estate investments or taxable brokerage accounts, the way you divide them matters. The Capital Gains Dilemma Let’s say you own a rental property purchased for $200k and is now worth $400k. Selling it as part of the divorce triggers capital gains tax on that gain, potentially $30,000-$60,000, depending on your tax bracket. Some couples avoid this by having one spouse keep the property and buy out the other’s share. This defers the tax hit, but you’ll want to ensure the buyout price accounts for future tax liability. Taxable Investment Accounts Brokerage accounts can be divided without triggering taxes if you transfer shares directly rather than selling and splitting proceeds. However, not all shares are equal from a tax perspective. Smart divorce settlements account for the cost basis of investments. These decisions require coordination between your divorce attorney, a CPA who understands divorce taxation, and a financial advisor who can model different scenarios. We remember a client whose settlement gave her a rental property “worth” $350,000. But the $80,000 in deferred capital gains owed when selling wasn’t accounted for. She effectively received $270,000 in value, not $350,000, a massive difference in her actual financial position. Building Your New Budget and Savings Strategy Living on one income after years of two requires adjustment. Start with your new essential expenses: housing, utilities, groceries, transportation, insurance, and any child-related costs. Then look at what’s left: this is where you begin rebuilding your financial cushion. Rebuilding Your Emergency Fund If you had to split or use your emergency savings during the divorce, rebuilding should be your first priority. Aim for at least three months of expenses, then work toward six months. Even $100 a month adds up to $1,200 each year. Maximize Retirement Contributions This feels counterintuitive when money is tight, but if your employer offers a 401(k) match, contribute at least enough to get a full match. Otherwise, you’re leaving free money on the table. If you’re over 50, take advantage of catch-up contributions. For 2025, you can contribute up to $23,500 to a 401(k), plus an additional $7,500 in catch-up contributions. If you're between 60-63, that catch-up increases to $11,250. Address Debt Strategically Post-divorce debt looks different for everyone. If you accumulated credit card debt while covering legal fees or temporary living expenses during divorce proceedings, prioritize paying these off once your settlement funds are available. Updating Your Estate Documents Updating beneficiaries and estate documents, a critical step, is sometimes overlooked. Check beneficiaries on: Life insurance policies Retirement accounts Bank accounts with payable-on-death designations Investment accounts Beneficiary designations override what’s in your will. We’ve seen ex-spouses receive retirement assets years after a divorce simply because the account owner failed to update beneficiaries. Address your will, healthcare power of attorney, and financial power of attorney, too. You're Not Starting from Zero Rebuilding wealth after divorce is about creating a financial foundation that supports the life you want to build moving forward. You have experience, earning potential, and time. It’s not a matter of if you can rebuild, but how efficiently you’ll do it. If you’re navigating financial planning after divorce, we can help. At Five Pine Wealth Management, we work with clients through major life transitions, creating practical strategies tailored to your specific situation. Call us at 877.333.1015 or email info@fivepinewealth.com to schedule a conversation. Frequently Asked Questions (FAQs) Q: Will I lose my ex-spouse's Social Security benefits if I remarry? A: Yes. Once you remarry, you can no longer collect your ex-spouse’s benefits. However, if your new marriage ends, you may claim benefits based on whichever ex-spouse's record is higher. Q: How long after divorce should I wait before making major financial decisions? A: Most advisors recommend waiting 6-12 months before making irreversible decisions like selling your home or making large investments. Focus first on understanding your new financial situation and letting the emotional dust settle. Q: Should I keep the house or take more retirement assets in the settlement?  A: This depends on your specific situation, but remember: houses have ongoing costs like property taxes, insurance, maintenance, and utilities that retirement accounts don't. We help clients run scenarios comparing both options, factoring in everything from cash flow needs to long-term growth potential, before deciding what makes sense for their situation.