Retirement Planning: How To Build Towards A Secure Future

Retirement isn't a finish line—it's a strategy.

For many of our clients, creating a retirement planning strategy starts well before age 65. Maybe you’re aiming to retire early, live off your DCP funds, or leverage equity comp to create long-term financial freedom. Whether you're a few years out or simply want options, the key is having a retirement plan that evolves with your life and compensation. 

At Schmidt Financial Management, we help tech leaders build retirement strategies that reflect their goals—early exits, travel, legacy, or simply more time freedom. It’s not about generic timelines or rules of thumb. It’s about modeling smart decisions, understanding what’s possible, and planning so you can act with confidence now and later. 

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What Is Financial Retirement Planning? And How Is It Different For Tech Execs? 

Retirement planning is more than accumulating wealth—it’s about designing a future that reflects your priorities and values. For technology professionals and executives, this means taking a holistic view of your financial life, including equity compensation, RSUs, stock options, and concentrated positions.

At Schmidt Financial Management, we help you align your retirement strategy with your unique career and financial trajectory. That means: 

• Allocating assets intentionally across qualified and brokerage accounts.
• Understanding how equity fits into your long-term income plan.
• Managing tax implications from stock sales, bonuses, and deferred comp.
• Coordinating Social Security and any pension benefits, if applicable.
• Creating a personalized withdrawal strategy that supports lifestyle and legacy goals.

But it all starts with your definition of retirement. 

In our conversations, we ask: What does success look like in your next chapter? Is it traveling the world? Investing time with family? Starting a foundation or advising startups? 

Once you’ve defined your ideal future, we’ll help you reverse-engineer a clear, customized roadmap to get there—with the aim to minimize costly detours along the way. 

How To Plan For Retirement As A High Income Earner 

When we talk about retirement planning for high earners in tech, it comes down to this: How do we turn your portfolio into a reliable income stream when your monthly income stops along with injections of RSUs or hopes of the subsequent IPO? That's where investment strategy really starts to matter.  

Schmidt Financial Management's advisors think through not just how your money grows, but how it supports your lifestyle later on, especially if you're nearing retirement and starting to shift from building wealth to living off it. This is where informed planning around asset allocation, cash flow planning, and risk management all blend together. Let's break down how that works in practice. 

Investment Strategies For Retirement 

One of the most common questions we hear from clients is: Am I invested the right way for where I am in life? That’s a smart question—and one that evolves over time. Your investment strategy should reflect not only your goals, but also your timeline, income needs, and how much risk you’re comfortable taking on. 

When we work with clients at Schmidt FM, we focus on two core pillars of retirement investing: asset allocation and risk management. Together, they form the foundation of a portfolio that grows when it should and protects when it needs to. 

Let’s take a closer look at how these strategies come together. 

Asset Allocation

Asset allocation is about putting your money to work in the right places—across stocks, bonds, real estate, and cash equivalents—in a way that supports both growth and stability. It’s the engine behind your portfolio’s long-term performance. 

We help clients build diversified portfolios that spread risk across different asset classes. That might mean blending high-growth stocks with more stable bonds, or layering in real estate for additional income and inflation protection. Cash equivalents also have their place, especially when preserving capital or preparing for short-term needs.

The key is balance. Too much risk and you're vulnerable to market swings. Too little and your money may not grow enough to sustain your lifestyle. And that balance shifts over time. The right allocation at age 40 often looks very different at age 65. 

We’re constantly modeling how different allocation choices impact long-term probabilities of success—because your portfolio shouldn’t just match your age. It should match your goals. 

Risk Management

Every investor faces risk—but not every investor experiences it the same way. That’s why we start with understanding your personal risk tolerance. How much volatility are you willing to live with? How would a market dip affect your financial plan—or your sleep? 

From there, we design strategies to help protect your portfolio. That could include reducing exposure to concentrated stock positions, implementing hedging techniques when appropriate, or simply building in enough liquidity so you’re not forced to sell during downturns. 

We also stress-test your plan against worst-case scenarios. What if the market drops 20% right before you retire? What if inflation sticks around longer than expected? Planning for those possibilities upfront helps ensure you’re not just reacting to risk—you’re ready for it. 

Retirement savings options

Once your investment strategy is in place, the next question is: Where should those dollars live? The types of accounts you contribute to—and when you access them—can significantly impact your after-tax income, both now and in retirement. 

At Schmidt FM, we work with tech professionals navigating compensation structures that go well beyond the 401(k). From optimizing DCP contributions to strategically managing RSUs and ESPPs, the goal is to align your savings vehicles with your career stage, income trajectory, and early retirement goals. 

The right account mix isn’t just about tax deferral—it’s about flexibility. It’s the ability to access income before age 59½ without penalties, to shift your taxable income year to year, and to balance your portfolio across tax buckets (pre-tax, Roth, and after-tax). That’s what sets the foundation for smarter withdrawals later. 

Let’s break down some savings tools that may be impactful for high-earning professionals, and how we help clients put them to work. 

401 (k) Plans

If you're a W-2 employee, your 401(k) is likely the cornerstone of your retirement savings. These employer-sponsored plans allow you to make pre-tax contributions, which reduce your taxable income today while deferring taxes on growth until retirement. 

Many employers offer matching contributions, which is essentially free money. At the very least, you want to contribute enough to capture the full match. 

Within the plan, you typically have access to a range of investment options, including: 

• Mutual funds 
• Company stock and bond funds
• Target-date funds that automatically adjust your asset mix as you approach retirement

We help clients make sure they’re not just contributing, but also optimizing their allocations inside the plan. Sometimes that means going beyond the default fund and building a more tailored mix. 

Individual Retirement Accounts (IRAs)

Even if you’re maxing out a 401(k), IRAs can be another key piece of your strategy—especially when paired with tax planning. 

Traditional IRA for High-Income Earners

Traditional IRAs offer tax-deferred growth and, in some cases, tax-deductible contributions. That means your investments grow without being taxed each year, and you only pay taxes when you take money out in retirement. 

However, high-income earners may find their ability to deduct contributions is phased out depending on income and participation in a workplace plan. Even so, a traditional IRA can still be useful—especially if you're using it for backdoor Roth conversions. 

Keep in mind, these accounts come with required minimum distributions (RMDs) starting at age 73, which can create taxable income whether you need the funds or not. That’s why coordination with your broader withdrawal strategy is key. 

Roth IRA for High-Income Earners

Roth IRAs are funded with after-tax dollars, but once the money is in, it grows tax-free—and withdrawals in retirement are also tax-free. 

For high earners who don’t qualify to contribute directly, a backdoor Roth strategy allows you to make a non-deductible contribution to a traditional IRA, then convert it to a Roth. 

One of the biggest benefits? No RMDs. That gives you more control over your income in retirement and helps with estate planning as well. Roth accounts are often a key component in our clients' long-term tax strategy. 

Deferred Compensation Plans (DCPs)

For many of our clients, a Deferred Compensation Plan (DCP) is one of the most powerful tools for retirement and early exit planning. These plans allow you to defer a portion of your salary or bonus—and in some cases, RSU income—beyond the IRS limits of a 401(k), creating opportunities to manage your tax bracket and build an additional stream of retirement income. 

We help clients use DCPs to their full advantage by modeling how deferral decisions impact their long-term cash flow, tax exposure, and retirement timelines. This is especially useful for clients looking to retire before 59½, since DCP distributions can be scheduled to fill that income gap before tapping into traditional retirement accounts. 

The key with DCPs is planning ahead. Once deferrals and distribution schedules are elected, they’re generally locked in—so we make sure those decisions are aligned with your goals and future cash needs, not just today’s paycheck. 

Solo 401 (k)

For independent contractors or business owners with no employees (other than a spouse), a Solo 401(k) combines the benefits of both a traditional 401(k) and a SEP IRA. 

You can contribute both as the employee and the employer, which allows for very high contribution limits—especially useful if you’re trying to catch up or aggressively build wealth later in your career. 

Solo 401(k)s may be a good fit for high-earning entrepreneurs who want to maintain control, maximize deductions, and keep their retirement strategy on pace with their income. 

Retirement Income Planning 

Once you’ve built up your retirement savings, the next big question is: How do you turn it into income you can count on? 

For most high earners, retirement isn’t a finish line—it’s a transition. And that transition comes with a new challenge: replacing your income in a way that supports your lifestyle, manages risk, and minimizes unnecessary taxes. 

At Schmidt FM, we help clients move from accumulation to distribution with intention. That means building a strategy that not only meets your income needs and desires, but does so efficiently—taking into account taxes, market conditions, longevity, and more. 

Here’s how we think about it. 

1. Income Replacement Strategies 

The first step in retirement income planning is getting clear on what your retirement will actually cost—not just the basics, but the version of life you’re excited to live. For our clients, that often includes extended travel, supporting family, or transitioning into purpose-driven work. Once we understand the lifestyle, we attempt to reverse-engineer the income. 

At Schmidt FM, we use a withdrawal philosophy grounded in Schmidt Financial Management's long-standing 3% rule. It's a conservative approach that works towards estimating how much you can safely draw from your portfolio without outpacing its ability to grow. The aim is to try to help your wealth last over a set length of years, but those years are determined by retirement age, assets available, retirement income, and much more. An equation that can greatly benefit from being calculated with the help of an advisor. 

Rather than rely on static rules, we tailor income strategies around your total financial picture—equity comp, DCP distributions, tax positioning, and market fluctuations. The result is a dynamic plan that gives you the income you need today while protecting your future flexibility. 

2. Passive Income Sources

Your investment portfolio isn’t the only way to generate retirement income. Some of our clients may have passive income streams that reduce the pressure on withdrawals and provide a layer of stability. 

Common sources include: 

• Dividend-paying investments, which can generate income while keeping your principal invested. 
• Annuities, which provide income backed by the full faith and credit of the issuer.

We help clients evaluate and optimize these streams when possible—especially when it comes to timing, tax impact, and long-term reliability. 

3. Tax-Efficient Withdrawal Strategies

You’ve saved diligently. Now it’s about keeping more of what you’ve earned. That’s where tax efficiency really shows up. 

We help clients: 

• Strategically draw from DCPs, taxable brokerage accounts, tax-deferred retirement plans, and Roth accounts to smooth income across retirement and manage their annual tax bracket. 
• Consider Roth conversions during low-income years or early retirement to lock in lower rates and reduce future RMDs. 
• Sequence withdrawals based on tax impact, healthcare costs, and estate planning goals.

Done well, this kind of planning may help reduce your tax bill while also extending the life of your portfolio. 

4. Social Security Strategies For Retirement

Social Security probably isn’t where you’re planning to draw most of your retirement income—but it’s still worth getting right. 

For tech executives and high-income professionals, exploring how Social Security fits into your overall wealth and tax strategy can be worthwhile. In many cases, our analysis shows that a well-considered claiming approach may help increase your lifetime income. When this is integrated with your broader plan—alongside your investment portfolio, tax strategy, and alternative assets—it can provide added flexibility and more options to support your financial goals. 

In our meetings, we’re helping clients: 

• May help navigate inflation by adjusting streams of income for such possibilities. 
• Can help hedge against longevity risk.
• Could offer a potential boost to legacy planning via optimized survivor benefit

It’s one of those things that feels simple on the surface—but the difference between checking the box and taking a strategic approach can be huge. And when the rest of your plan is dialed in, Social Security becomes one more lever to pull with purpose. 

Planning for healthcare costs in retirement

Healthcare is one of the most underestimated—and potentially expensive—parts of retirement. Even high earners who’ve done everything right can get caught off guard by rising premiums, out-of-pocket expenses, or long-term care needs. 

At Schmidt FM, we encourage clients to think of healthcare not as a wildcard, but as a line item—something you can plan for with just as much strategy as your investment portfolio or tax withdrawals. 

The earlier you start, the more options you may have. Let’s break it down. 

Medicare 

Most people become eligible for Medicare at age 65, but that doesn’t mean the choices are simple. There are several parts to consider: 

• Part A covers hospital care and is typically premium-free. 
• Part B covers doctor visits and outpatient services. 
• Part C covers the Medigap (supplemental insurance) or Medicare Advantage plans, which can help cover what Medicare doesn’t. 
• Part D helps with prescription drug costs. 

We walk clients through their initial enrollment periods (IEP) to avoid penalties and coverage gaps, and we help evaluate supplemental policies based on your health history, budget, and travel needs. 

Why does this matter? Because for high earners, Medicare premiums are means-tested—meaning your income determines how much you pay. That’s where strategic tax planning and income timing can actually reduce your healthcare costs. 

Long-Term Care (LTC) Planning 

Here’s the reality: nearly 70% of people age 65 and older will need some form of long-term care. That could mean in-home assistance, assisted living, or skilled nursing care. And it’s rarely covered by Medicare. 

We help clients explore their options: 

• Long-term care insurance (and when it makes sense) 
• Hybrid policies that combine life and long-term care benefits 
• Self-funding strategies using earmarked assets or trust structures 

The goal isn’t to plan for worst-case scenarios—it’s to protect your loved ones and preserve your financial plan if those scenarios happen. 

Health Savings Account (HSA) 

If you're enrolled in a high-deductible health plan (HDHP), an HSA can be a highly tax-efficient way to save for future medical expenses. 

• Contributions are tax-deductible 
• Growth is tax-free
• Withdrawals for qualified healthcare costs are also tax-free. 

While HSAs may be right for certain clients, we help evaluate if an HSA fits in the context of your entire financial picture, including equity compensation, investment strategy, and retirement timeline. 

Emerging Retirement Planning Trends

Retirement looks different than it did a generation ago—and it’s evolving fast. We’re seeing a number of trends that are changing the way our clients think about their plans: 

• Increased longevity means retirement could last 30 years or more, making income sustainability even more critical. 
• Technology-driven financial tools are making it easier to track spending, model outcomes, and stay on top of complex plans in real time. 
• Sustainable and socially responsible investing (SRI/ESG) is becoming a bigger priority. Clients increasingly want their money to align with their values—not just earn a return. 

We help clients adapt their strategies as these trends unfold—so their plan keeps pace with both their goals and the world around them. 

Potential Challenges

No retirement plan is immune to challenges—but the best plans account for them ahead of time. Here are a few of the key risks we help clients prepare for: 

• Inflation, which quietly erodes purchasing power over time if your income doesn’t grow to match 
• Market volatility, which can impact portfolio longevity—especially if it hits early in retirement 
• Unexpected healthcare costs, from out-of-pocket expenses to long-term care needs
• Longer retirement periods, requiring more income and stronger tax efficiency over a greater span of years 

The good news? With proactive planning, these aren’t reasons to worry—they’re reasons to prepare. And that’s exactly what we’re here to help you do. 

Conclusion

Retirement planning isn’t a one-time decision—it’s an evolving strategy. With the right partner, it becomes a series of thoughtful moves that build toward the future you want, on your terms. 

Whether you’re 30 years out or actively planning your exit, we help clients bring clarity to the process, confidence to their decisions, and flexibility to their plan. Because when your retirement strategy reflects your life—not just your age—you don’t just hope things work out. You’re ready for what’s next. 

Next steps

• Get a clear picture of your retirement readiness 
• Align your income, tax, and investment strategies 
• Build a flexible roadmap that evolves with you 
• Partner with a team that plans proactively—not reactively 
  

🎯 Ever wonder if your retirement plan is truly on the right track? 
Let’s take a moment to talk through your goals and make sure your strategy is aligned with where you want to go. 

Frequently Asked Questions About Retirement Planning

1. How much do I really need to retire—especially with concentrated equity holdings?

It’s not just about hitting a number. We model retirement based on the life you want to lead—factoring in equity liquidity events, lifestyle costs in high-cost-of-living areas, philanthropic goals, and long-term tax strategy. For many tech executives, the real question is: “How do I turn my career gains into enduring financial independence?” 

2. How should I time Social Security if I am already in the top 10 percentile based on income or assets?

When you have strong income or are realizing large gains—like from equity sales—Social Security timing is less about your asset level and more about tax coordination. The key questions become: Are you triggering big gains in certain years? Will income vary year to year? What’s your spouse’s plan? 

Instead of using a fixed formula, we treat Social Security as part of your overall cash flow and tax strategy, aligning it with equity winddowns, passive income, and long-term planning. 

3. How do I turn my investments—including company stock—into reliable retirement income?

Executives often have unique portfolios: concentrated equity, deferred comp, and RSUs. We create a withdrawal strategy that sequences these assets to maximize tax efficiency and cash flow—without triggering unnecessary capital gains or AMT surprises. 

4. What are the smartest ways to manage taxes in retirement, especially after big liquidity events?

Tax planning starts long before you retire. We use tools like Roth conversions during low-income years, net unrealized appreciation (NUA) for employer stock, and strategic asset location to reduce your lifetime tax bill—not just this year’s. 

5. Do I still need to invest aggressively in retirement if I have $5M+ in assets?

It depends on your goals. For many tech professionals, continued growth is essential for legacy-building, charitable giving, or offsetting inflation in healthcare and living costs. We build a portfolio that balances growth with the peace of mind you’ve earned. 

6. How should I plan for healthcare, especially if I retire before Medicare kicks in?

Bridge strategies like COBRA, ACA planning, and Health Savings Accounts (HSAs) can fill the gap if you leave work in your 50s. We model healthcare costs—including long-term care—and integrate them into your broader income and investment strategy. 

7. How often should I update my retirement plan with changing equity compensation and market conditions?

At least annually—and any time your compensation structure, job, or goals shift. Tech executives experience frequent change, so we treat your plan as a dynamic, living strategy that evolves with your life and the market. 

8. Can I retire early—even if my wealth is tied up in company stock?

Yes, but it takes planning. We help clients explore early retirement by modeling equity liquidation strategies, designing tax-smart cash flow bridges, and preparing for volatility—so your timeline isn’t limited by your liquidity. 

9. Why is estate planning so important as I approach retirement?

With $5M+ in assets, a well-structured estate plan can prevent avoidable taxes, protect your heirs, and ensure your wealth aligns with your values. We coordinate across your retirement and estate strategies to keep everything working together. 

10. What if I already have a financial plan? Can you pressure-test it for gaps?

Absolutely. We frequently review existing plans and find opportunities to enhance tax efficiency, diversify equity risk, and plan more intentionally for retirement. A second opinion often pays off—especially for executives with complex compensation and goals. 

Disclaimer: Schmidt Financial Management, Inc., (SFM) is a registered investment adviser. This information is only intended for clients and interested investors residing in jurisdictions in which SFM is qualified to provide investment advisory services. Blog posts do not intend to provide personalized investment advice through the various broadcasts and does not represent that the securities, services, or strategies discussed are suitable for any investor. Investors should consult with their financial advisors before making any investment decisions. The S&P 500 Index is a market-value weighted index representing the 500 largest U.S. public companies. The Bloomberg US Aggregate Bond Index measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market. This video is for informational purposes only and does not constitute a recommendation to buy or sell cryptocurrency. This content specifically addresses restricted stock units (RSUs), which can be complex financial instruments. The information presented here may not be applicable to your individual situation. We strongly recommend consulting with a qualified financial advisor, tax professional, or legal counsel before making any decisions regarding RSUs or other financial matters. Equity 411, presented by Schmidt Financial Management, Inc. (SFM) does not guarantee the accuracy, completeness, or timeliness of the information provided. We are not liable for any losses or damages arising from the use of this information. Investing in securities, including RSUs, involves risks and may not be suitable for all individuals.