Four Ways High Earners in Georgia Can Maximize Retirement Savings

For high earners in Georgia, maximizing retirement savings requires careful planning and leveraging all available opportunities to grow and protect your wealth.
In this article, we’ll share key strategies, including optimizing employer-sponsored plans, tax-efficient investment options, diversification, and estate planning.

1. Start by Maximizing Opportunities

To make the most of your retirement savings, it’s important to evaluate your existing opportunities and ensure you’re taking full advantage of them.
High earners have the advantage of contributing more to 401(k)s, IRAs, and other retirement plans due to higher income limits, for example. For 2024, the 401(k) contribution limit is $23,000, with an additional catch-up contribution of $7,500 for those over 50. Similarly, IRAs have a contribution limit of $7,000, with a $1,000 catch-up contribution.

We highly recommend taking advantage of employer-sponsored plans. By contributing enough to get the full match from your employer, you’re essentially benefiting from “free money” which can significantly impact your overall retirement savings. You can also explore other employer-sponsored benefits like stock options or deferred compensation plans, which can provide substantial future benefits.

Because high earners often face higher tax rates, making tax-efficient investments is crucial. Consider investing in tax-advantaged accounts like Roth IRAs, which offer tax-free withdrawals in retirement. Municipal bonds and index funds are other tax-efficient investment options that can help minimize your tax burden while growing your wealth.

2. Tax and Retirement Planning in Georgia

Speaking of tax, Georgia offers several tax benefits that can aid in retirement planning. For instance, the state exempts Social Security benefits from state income tax and provides a significant retirement income exclusion for residents over 62.

High earners should also be aware of the Georgia 529 Plan, which provides state tax deductions for contributions made towards education savings, indirectly freeing up more of your income for retirement savings.

3. Diversify, Diversify, Diversify
Diversifying your investments across various asset classes—stocks, bonds, real estate, and alternative investments—can help manage risk and ensure steady growth. To diversify successfully, you must consider several things, including risk tolerance, time until retirement, and financial goals.

Thanks to higher cash flow, high earners often benefit from the ability to absorb more volatility and take more losses, but it’s still important to carefully consider your risk tolerance.

Your investment strategy should also reflect your time horizon until retirement. Younger high earners can afford to take on more risk for potentially higher returns, but if you’re closer to retirement, your focus should be on preserving your wealth and minimizing risks.

Have you clearly defined your financial goals? For instance, are you planning an early retirement, or do you want to ensure a certain standard of living post-retirement? Your goals will influence your savings rate, investment choices, and overall retirement strategy.

4. Estate Planning Considerations

Effective estate planning can help minimize the estate taxes your heirs will have to pay. There are no inheritance or state taxes in Georgia, and you can utilize gifting strategies and irrevocable trusts to reduce the taxable value of your estate.

A comprehensive estate plan is essential for wealth transfer. Draft a will to specify how your assets should be distributed. Consider setting up trusts, which can offer more control over asset distribution, protect assets from creditors, and potentially reduce estate taxes.

Financial Security and Peace of Mind in Retirement

As your life changes, so should your retirement plan. Regularly reviewing and adjusting your plan ensures it remains aligned with your current financial situation and future goals. Regularly consulting with a financial advisor to make necessary adjustments will help keep you on track.

Maximizing your retirement savings as a high earner requires strategic planning and a proactive approach. At Black Oak Wealth Management, our expert financial advisors specialize in personalized retirement planning in Georgia. We’re here to help you maximize your retirement savings and achieve financial security.

To review or create your plan and take the next steps toward a secure retirement, get in touch today.

If you need assistance navigating medical benefits, developing a long-term care plan, or protecting your or a family member’s wealth, reach out to our team today.