Last week we addressed mistakes made by far too many young participants in 401(k) and similar Defined Contribution Plans. They are the taxpayers with the most remaining time to help themselves establish a better future retirement. Unfortunately, younger generations are not well informed and educated as to what that takes. I hope we have helped at least a few.

Today we are focused on high-earning taxpayers, who tend to be somewhat older, highly educated, and under many financial pressures, not the least of which are taxes. They face a delicate balance between daily expenses and long-term savings for retirement. Taxes often muddy the water.

Learning a few basics can be pivotal to wealth accumulation. Some of these may seem obvious, yet mistakes are made every day. Every pay period presents an opportunity for 401(k) deferrals and tax withholding, but only until that day is past. Here are a few of the “simple” rules that are often neglected:

• Enroll in your 401(k) Plan the day you are eligible
• Contribute enough through salary deferral to receive all available company matching funds
• If possible, contribute the maximum allowable by law, paying attention to available “catch-up” contributions, spread out over the year
• Higher earners may fulfill their Social Security withholding limit ($184,500 for 2026), after which funding an IRA will be easier with the temporary increase in “take-home pay”
• Taxpayers receiving large annual tax refunds are over-withholding, and should reduce the taxes withheld every payday; use the extra cash flow for Retirement Plan contributions through deductible salary deferrals
• Many people with income from second jobs, “side hustles,” or spousal income aren’t aware of tremendous available saving vehicles for that outside income, including SEP IRAs and even Individual 401(k) Plans, which allow large contributions over and above their Company 401(k)
• As taxpayers age, they must pay attention to their Beneficiary Designations, keeping them current at all times

This is not meant to be an exhaustive list of common errors and omissions made by high-earning taxpayers. Rather, we are opening the door to successful, but busy, taxpayers to seek advice from competent and experienced financial advisors. We can help.

Attaining a well-funded retirement begins with what people do today.