What Should High Earners in Their 40s Be Doing to Get Real About Financial Planning?

You’re in your 40s, household income is climbing north of $300-400k.  Most months, it feels like you’re doing fine. The bills are covered, life is busy, and things are generally moving forward.

But something keeps nagging at you.

You’ve worked hard to build this life, yet you’re not totally sure where you stand. You wonder if you should be saving more. You’ve thought about retirement, but it still feels vague. You haven’t gotten around to setting up wills, or maybe you did years ago but haven’t looked at them since. You keep thinking, “We should probably talk to someone.”

This post is for you. Whether you work with a planning firm like ours or not, here are five places to focus right now if you're ready to stop drifting and start getting more intentional.

1. Understand What It Actually Costs to Be You

This is not the same as budgeting. It’s about getting clear on the total cost of your lifestyle. Most couples know their mortgage payment and maybe daycare or tuition, but they haven’t added up what they spend across categories or considered annual one-off costs.

To start, ask:

• How much money actually leaves your accounts each month across checking and credit cards?

• Are there expenses you only see quarterly or annually, like insurance premiums, holidays, or summer camps?

• Have your spending habits crept up over time without you noticing?

You don’t need to overhaul everything. But without knowing your current burn rate, it’s impossible to plan for the future with confidence.

2. Set a Monthly Savings Target and Automate It

When income is high, it’s easy to fall into the trap of saving “whatever’s left.” That usually means saving less than you should, or being too inconsistent to make progress.

Instead, work backward. Once you know what you spend, decide what you want to save, and automate that number into specific accounts:

• Max out your 401(k) through payroll. If both spouses are working, that’s potentially $46,000 per year.

• Use backdoor Roth IRAs if eligible and appropriate.

• Open a taxable brokerage account for goals that aren’t retirement. Think second home, college funding, or career flexibility.

• Fund 529s for kids if you want education costs to be covered without tapping retirement savings.

• Maintain a true emergency fund. Ideally, three to six months of expenses in cash.

Savings doesn’t happen because you want to do it. It happens because you set up a system that does it for you.

3. Review Your Tax Position Now, Not Later

Most high earners are overpaying the IRS simply because they haven’t built a tax strategy. A CPA filing your return is not the same as forward-looking tax planning.

Ask these questions:

• Are you harvesting losses in your investment accounts to offset gains?

• Could a donor-advised fund help you make larger charitable gifts and get a bigger deduction?

• Is your tax withholding accurate, or are you floating the government a five-figure interest-free loan each year?

• Are your 401(k) contributions going into pre-tax or Roth, and do you understand the impact of that choice?

Taxes are one of your largest annual expenses. Planning ahead can reduce that cost significantly over time.

4. Make Sure You’re Properly Insured

This is often the most neglected area in high-income households. The assumption is, “We’re healthy, we’re young, we’re fine.” Until something happens.

Review your coverage across four key areas:

• Life insurance: Do you have enough to replace income through your spouse’s retirement and cover future expenses like college? Employer-provided group policies are rarely enough.

• Disability insurance: If your family relies on your paycheck, this coverage matters. Make sure you understand how your policy defines disability and whether the benefits would be taxed.

• Umbrella coverage: This protects you if something major happens—like a lawsuit or serious accident—and your home or auto policy limits are exceeded.

• Legal documents: Wills, healthcare directives, and financial powers of attorney are a baseline. If you already have these, check whether they’re still accurate and updated with your current situation.

You cannot build a financial plan on top of an insurance gap.

5. Begin Mapping the Bigger Picture

Even if retirement feels far off, you’re close enough that every decision you make now will echo into that future.

Start thinking through:

• What will it take to sustain your lifestyle in retirement?

• At what age would you ideally stop working, and how realistic is that?

• Do you have a plan for funding college without derailing your own future?

• How much of your wealth is locked inside retirement accounts, and how accessible is it if you need it earlier?

• Are your assets aligned with your goals, or just a collection of accounts?

These are not abstract questions. They directly inform how much you need to save, what accounts to prioritize, and how to invest based on timing and risk.

This Stage Is About Taking Control

This isn’t about guilt or shame. It’s about realizing that income alone doesn’t create peace of mind. Clarity does. Structure does. A plan does.

You don’t have to be perfect. You just have to start taking action on the areas that matter.

Whether you build your plan on your own or work with someone, these are the topics that deserve your attention now—not five or ten years from now when it feels more urgent.

If you're ready to bring structure to your finances and finally understand where you stand, we’re here to help.

Any discussion of taxes or legal considerations is for general information purposes only, does not purport to be complete or cover every situation, and should not be construed as legal, tax, or accounting advice. Clients should consult with their qualified legal, tax, and accounting advisors before implementing any strategy discussed herein. CRN202809-9775729.