3 Money Tips for Busy Corporate Executives to Act on Now

Yes, you're busy. But make time to check off these three critical financial tasks.

(Image credit: londoneye)

Most corporate executives work hard for their money — but devote little time to managing it. They are often traveling around the nation or the globe, cellphone in hand, constantly speaking to managers, clients and vendors, as well as sending and returning texts and emails. And these executives are hoping to spend at least a few minutes each day on their personal and family life.

But, fear not, road warriors. If you can carve out less than 1% of your time each week — 90 minutes — you can help put your money on a fast track to growth. To get started, here are three critical steps to take:

Contribute the Maximum Amount to Your 401(k) Retirement Plan.

Start by finding out the current account balance as well as the amount you are contributing to the plan from each paycheck. One of the biggest mistakes executives make is believing they are contributing the maximum amount allowed by law if they are putting in the minimum amount needed to get the company’s matching amount. If the company match is 6%, that’s the percentage of their own pay they are contributing.

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Instead, people under age 50 can contribute up to $19,000 in 2019, while those age 50 and over can contribute up to $25,000 — and each of these figures goes up by $500 in 2020. This can save thousands of dollars in income tax, as well as making a huge impact on their long-term retirement savings. Once you’ve truly “maxed out” your 401(k) plan savings, never lower your contribution percentage, never.

Next, determine how much of your contributions should be allocated to stocks, bonds and cash. People in their 20s and 30s should consider investing most of their money into stocks, since those investments have the ability to provide the highest returns over a long period. But if you plan to retire soon, consider allocating between 50% and 70% of your contributions to stocks. If the stock market takes a nasty fall soon, you don’t have as much time to recover.

Finally, make certain the right people are named as the beneficiaries of your 401(k) plan; they inherit this money in the event of your untimely death. I’ve seen many cases where the beneficiary field is blank, or an executive believes their will controls what happens to their 401(k) assets.

For example, I’ve had clients who have divorced and remarried, yet their ex-spouse is still listed as their 401(k) beneficiary. In other cases, an executive worked with an attorney to set up a special trust so his children would inherit the money, but the trust was not named as the beneficiary.

Make Certain Your Wealth Isn’t Too Dependent on Your Employer.

Many corporate executives have a lot of their wealth tied to their employer’s stock. Not only do they depend on a solid paycheck from their employer, but they receive stock options, restricted stock grants, 401(k) match and other compensation that depends on the company’s economic well-being. The danger here, of course, is that any executive’s net worth can plummet if their company begins to underperform and the stock price drops.

To avoid such a scenario, especially for those nearing retirement, a good rule of thumb is to keep no more than 10% to 15% of all assets in company stock. For example, if all of your 401(k) retirement savings plan is in your employer’s stock, it makes sense to diversify these holdings, which can be done with no tax cost. As an alternative, consider placing this money in a combination of U.S. and international stock funds, as well as bond funds, available in your 401(k) plan.

Develop or Update an Estate Plan.

As unlikely as it seems, most of my new clients don’t have a will. And for many of those who do, it’s usually decades old. Others don’t have other important pieces of an estate plan in place, such as financial or health care powers of attorney.

I’ve heard great advice from lawyers over the years that one should review their will and estate plan every five years. For example, a married couple with young children may have designated a parent as the executor of their will a decade ago. But if their children are now young adults, does that still make sense? The same strategy should also be applied to the financial and health care power of attorney documents.

If catastrophe strikes, dying without an estate plan can leave a huge mess for your loved ones to clean up; assets can go unaccounted for and huge legal bills can accumulate. It’s much less expensive to get an estate plan done during life than to die without your financial affairs in order.

Life moves fast for most corporate executives. But at some point, just about all of them will want to leave the company that has played a major role in building their wealth. When that time comes, making moves now to secure your finances will help provide the freedom needed to retire or for your next career move.


This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Lisa Brown, CFP®, CIMA®
Partner and Wealth Advisor, CI Brightworth

Lisa Brown, CFP®, CIMA®, is author of "Girl Talk, Money Talk, The Smart Girl's Guide to Money After College” and “Girl Talk, Money Talk II,  Financially Fit and Fabulous in Your 40s and 50s". She is the Practice Area Leader for corporate professionals and executives at wealth management firm CI Brightworth in Atlanta. Advising busy corporate executives on their finances for nearly 20 years has been her passion inside the office. Outside the office she's an avid runner, cyclist and supporter of charitable causes focused on homeless children and their families.