High-Income Millennials, This Advice Is for You

If you are in your 20s or 30s and making $150,000-plus a year, your financial planning needs are more advanced, and need more attention, than the average Millennial.

A Millennial couple looks at a tablet on their living room floor with their dog.
(Image credit: Getty Images)

We Millennials making high incomes need to understand that our financial situation is different than most. We also need to understand we are blessed to have this opportunity, might I add. Most people do not make a high income in their 20s and 30s. Ninety-plus percent of people our age make less than $100,000 and are more concerned about needing to be frugal to ensure they can save enough for the future.

This is part of why Dave Ramsey is so popular. His main focus is helping people in that crowd. Although some of Dave Ramsey's advice will apply to people making more than $100,000, not all of it may be applicable, and some of it may not be advanced enough. You may need to think about financial planning differently, and I will explain why and how in this article. I hope this is a paradigm shift for you, so you can find more value and purpose with the money you work hard for.

What is your purpose with money?

The first thing we always ask our Millennial clients is: What are your goals, and why are you taking on a job that requires more time, expertise and work? Is it to accumulate wealth? Retire at age 50? Travel? Enjoy your high income now instead of saving every penny you make? Be charitable? Give your kids more opportunities?

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Only you can answer these questions for yourself, but your choices can be a guide to help design your financial plan.

I would also suggest you look into coaching. Not only financial coaching but life coaching, which would involve deeper conversations about your goals and purpose. This is something we implement into our process for the clients we serve.

Advanced financial strategies

To accomplish the goals you choose, you may need a different approach from what is commonly taught to most people in your age group, like paying off credit card debt, saving for retirement and building an emergency fund. Most likely, you’ll need more advanced strategies. Here are some of the strategies we use to help our high-income clients who are in their 20s and 30s.

Tax allocation. Should you invest in a Roth or traditional 401(k)? What do you do next to minimize taxes ongoing if you are maxing out your 401(k) and IRA each year? You will need to be more intentional and specific about which investments are right for you and in what accounts they should be held.

Non-qualified investments. Once you have maxed out your 401(k) and IRA, this is an investment option that many use. The key with this investment is to know you have to pay capital gains tax on the growth here; however, if you plan correctly, you could potentially reduce or eliminate this tax. Planning strategies could include tax-loss harvesting, charitable donations, selling them off in years with low incomes, etc.

Backdoor Roth IRA. If you make too much money, you can’t contribute to a Roth IRA, although this is a loophole you could potentially take advantage of. Find out more about this in my YouTube video about backdoor Roth IRAs.

Roth conversions. Do you have an old 401(k) or IRA lying around? If so, you may want to look at moving it to a Roth while tax rates are lower and before your income/assets increase even more! Find out more in my Kiplinger article I Love Roth IRAs and Roth Conversions.

Charitable gifting. If you are currently giving or are going to give significant amounts to charities over the coming years, do not forget your tax savings! For our Millennial clients, we look at strategies like donor-advised funds or bunching charitable contributions into one year. These strategies allow you to maximize your charitable deductions.

Life insurance strategies. This one is not for everyone but could be a good opportunity for those looking for more ways to get tax-free income if they are already maxing out their Roth 401(k), Roth IRA and health savings accounts (HSAs). There are also other tax benefits to life insurance, like being able to use it for healthcare in the future tax-free. Also, if you pass away, the death benefit will be left behind tax-free.

When looking at this strategy, make sure you are working with a professional who is a fiduciary (be cautious of what you see on TikTok). You can often run into “insurance salespeople” who are only looking for a commission and not required to act in your best interest. Working with a fiduciary professional will also help you make sure your policy is structured in the right way.


Whenever dealing with high-income people our age, we say, “You are a busy professional in your field; we’re experts in our field. Let us handle and help with your finances while you focus on your career.” I believe wholeheartedly in this, which is why I delegate everything in life that I either do not enjoy or that I could pay someone to get done more efficiently.

For example, I do not clean my house. I am terrible at cleaning, and it takes me five hours to do it. Instead, I can pay someone $200 to clean my house. If it takes them the same five hours, then that means I am paying them $40 an hour. I am confident that if I free up those five hours for work, then I will more than pay for the cleaning and will be able to do something I enjoy much more! Or it could buy me time to spend with my family/friends and give my life more purpose. Time is priceless. We have only so many hours in a day, and we can’t get them back once they’re gone.

As part of our coaching with our clients, we help make lists of what they feel comfortable delegating. What would make their lives better? We make it specific, like paying someone to mow your lawn or do your laundry, hiring a travel agent to plan your trips, having someone cook your meals or deliver your groceries, etc. With your higher income, these are things you should be easily able to afford to buy you more time.

My best advice, though, is to delegate your financial life. There is too much to know, and there are too many opportunities to miss things when you’re doing it on your own. The value you receive from a financial planner should far outweigh the fee.

In finding that financial planning team, make sure you work with a team who is going to see you through (and is not going to retire soon), will meet with you regularly and ongoing, does comprehensive financial planning and is a fiduciary.

At PRP, the majority of our advisers are in their 20s and 30s. We are both the current and next generation of financial planners and want to make an impact on our peers’ lives because most financial planners will only serve people with a higher net worth or who are in or near retirement.

For more information, see my YouTube video on how and why to invest in the accumulation phase of retirement planning.


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.

Joe F. Schmitz Jr., CFP®, ChFC®
Founder and CEO, Peak Retirement Planning

As Founder and CEO of Peak Retirement Planning, Inc., Joe Schmitz Jr. has built a comprehensive retirement planning company focused on helping clients grow and preserve their wealth. Under Joe’s leadership, a team of experienced financial advisers use tax-efficient strategies, investment management, income planning and proactive health care planning to help clients feel confident in their financial future — and the legacy they leave behind. Joe has also written a book, titled I HATE TAXES. You can find Joe on YouTube, where he creates educational videos for those in or near retirement. If you would like to talk to Joe’s team, you can schedule a meeting.