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I Made $400k Last Year and Have $600k in Retirement Savings, But My Spouse Doesn’t Work. How Can I Save More for Retirement?


It’s common for even very high earners to feel squeezed, especially if you live in an expensive area like New York, San Francisco or Boston. Costs of living close to your job will almost certainly be high, particularly since you’re competing with other six-figure earners. Depending on your field, you could easily have $200,000 or more in student loans. And the long hours demanded by many lucrative jobs can lead to a surprising amount of stress. Oftentimes, one spouse will take care of the household and children to balance out the family economics.

This dynamic may require special considerations for long-term planning. If you’re looking ahead and your retirement savings aren’t what you’d like them to be, there are strategies you can take to accelerate your savings and get ahead. For advice on your personal situation, talk to a financial advisor today.

If You Are Younger, Invest Aggressively

The more time you have to save and invest, the better off you are.

For example, say you’re 45. In that case you might not have a problem to solve. Take your $600,000 starting point, work until age 70 and keep on making standard 10% contributions to an S&P 500 fund. At that rate you could retire with about $10.4 million in the bank, giving you $416,000 per year at a 4% withdrawal rate.

If You Are Older, Save Aggressively

On the other hand, say that you’re 60. With 10 years to save, that same scheme may generate about $2.2 million in savings. At a 4% withdrawal rate this would generate $88,000 per year, enough for some people to live comfortably but you will likely feel squeezed based on your income during your working years. 

So your plan here will depend almost entirely on how old you are. 

If possible, retire later so your investments have time to grow. And adjust your approach based on your age. The younger you are, the more you can compensate for an underfunded portfolio with aggressive investment strategies. Your portfolio has time to grow and to recover from market downturns. 

The older you are, the less time your portfolio has to grow and recover from downturns. Instead, you can compensate with the more secure option of aggressive budgeting and increased savings. If you’re unsure of the best strategy to maximize your retirement savings, talk to a financial advisor about your situation.

Maximize Contributions With a Spousal IRA

Don’t forget that your spouse gets annual retirement contributions, even though they don’t work. If you haven’t already, have your spouse open an IRA (ideally a Roth IRA) and maximize their annual contributions. While IRAs usually require an individual to contribute their own earned income, a spousal IRA allows the working spouse to make contributions on behalf of the non-working spouse.

The limits on an IRA are relatively low, but still useful. For example, in 2023, you can put up to $6,500 per year in an IRA. If you make that contribution to an S&P 500 fund every year for the next 25 years, you might save about $709,000.

For that matter, don’t forget to contribute to your own IRA. Given your income it’s likely that you have a workplace 401(k), which is good, but you can also invest in an IRA on the side.

A financial advisor can help you determine appropriate portfolio allocations.

Set A Retirement Income And Budget Backwards

A lot of spending power also means that you have a lot of saving power if you’re willing to budget.

So take the following steps:

First, figure out the costs of a lifestyle you would enjoy. You also likely have things you can scale back, but not cut. For example, keep traveling, but fly coach. Set the budget for a nice lifestyle, but not a lavish one. You’ll also want to build in some room for the unexpected. A financial advisor can help you project a realistic retirement budget. Ultimately, you’ll want to synchronize this budget with a reasonable projection of your retirement income.

For example, using the 4% rule, if you want to live on $150,000 per year you will need a $3.75 million portfolio by retirement. You currently make about $300,000 after taxes (roughly, based on your state). Even if you have 10 years until retirement, if you set your budget to $150,000 now and contribute the other $150,000 to your savings, you could have $3.9 million by retirement. You will have a comfortable income now, and secure that income for years to come. 

The Bottom Line

High-income, high-spending lifestyles are more common than you’d think, but it can lead to a crisis when you want to retire. The good news is that you have a lot of saving power, but depending on your age it might mean significantly rethinking your budget and lifestyle today so that you can live comfortably in the future.

Wealth Investment Tips

  • With this kind of money, it’s useful to start thinking of your finances in terms of “wealth” rather than income. Wealth management is the practice of letting money build money, and looking at those assets in the long term. It could be very helpful for someone with significant earnings. 
  • A financial advisor can help you build a comprehensive retirement plan. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

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