How to Maximize Retirement Savings: Proven Strategies for Growth

Learning how to maximize retirement savings is the bedrock of any sophisticated wealth plan, especially for high-net-worth individuals who can capitalize on tax-deferred growth. The first and most fundamental move is to consistently max out every single tax-advantaged account you have access to. Getting this right from the start creates a compounding effect that’s almost impossible to catch up on later, setting the stage for a secure financial future.

Building Your Foundation for Maximum Growth

For high-net-worth families, maximizing retirement savings is less about simple budgeting and more about strategic financial architecture. The most powerful lever you can pull is putting the maximum allowable amount into your 401(k)s, IRAs, and any other tax-advantaged vehicles available to you each year. This is a crucial first step for long-term financial independence.

Think of this as the launchpad for your entire financial future. By hitting those contribution limits, you’re hitting several key goals at once:

• You Capture the Full Employer Match: Not contributing enough to get your company's full 401(k) match is literally turning down free money. This is often an instant 50% or 100% return on your contribution—a rate of return you simply won't find anywhere else.
• You Supercharge Compound Growth: The more capital you have working for you from day one, the more dramatic the effect of compounding becomes over the long haul. A large sum invested early creates a powerful snowball effect that smaller, later contributions can never quite replicate. This is a core principle of maximizing your retirement nest egg.
• You Lower Your Tax Bill Today: Every pre-tax dollar you put into a traditional 401(k) or IRA directly reduces your current taxable income. For high earners, this can mean thousands in tax savings year after year, freeing up even more cash to invest. You can dive deeper into the mechanics in our guide on tax-deferred retirement accounts.

To stay on top of these crucial numbers, here's a quick reference guide for the current contribution limits.

Current Retirement Account Contribution Limits

This table provides a snapshot of the maximum amounts you can contribute to primary retirement accounts, including the extra "catch-up" amounts for those age 50 and over, a key tactic for late-stage retirement planning.

Keeping these figures in mind ensures you're taking full advantage of the tax-advantaged space available to you each year.

The Power of Consistent Contributions

This foundational step sets the stage for every advanced retirement savings strategy we’ll discuss. The sheer scale of assets held in these accounts highlights just how critical they are. As of the end of 2023, total US retirement assets hit an incredible $38.4 trillion.

Despite this, many people are still behind. The average American is facing a $442,000 savings gap, having saved $1.048 million when they really need closer to $1.490 million for a comfortable retirement. Closing this gap requires discipline and deploying the best long-term investment strategies for consistent growth. It all starts with hitting your contribution ceiling, year in and year out.

By making maximum contributions the default setting for your financial plan, you build a powerful base of tax-advantaged capital. This discipline not only accelerates your own wealth but also enables the use of more advanced techniques we will explore later.

Without this solid foundation, other sophisticated tactics just don't have the same impact. It’s the difference between fine-tuning a high-performance engine and trying to win a race in a standard family sedan. Before you explore complex retirement planning tips, make sure your core contribution engine is running at full throttle.

Moving Beyond the Basics with Advanced Contributions

So, you’ve done the foundational work. You're consistently hitting the maximum contribution limits on your 401(k) and IRA. That’s fantastic, but for high earners, it's just the starting line. Now it's time to shift gears from simply saving to strategically building wealth using more sophisticated methods to maximize retirement savings.

This is where you can create a real, tangible advantage by legally steering more of your capital into the most powerful tax-advantaged accounts out there. These advanced savings strategies might sound complex, but the concepts are actually quite straightforward. They open up new pathways to get more money into accounts where it can grow tax-free.

The Backdoor Roth IRA: A High-Earner's Workaround

What happens when your income is too high to contribute directly to a Roth IRA? Many people think that door is closed for good, but it's not. The Backdoor Roth IRA is a common and perfectly legal technique that lets you bypass those income limitations.

Here’s the gist of how it works:

1. First, you make a non-deductible contribution to a Traditional IRA. Your income doesn't matter for this step.
2. Then, almost immediately, you convert those funds from the Traditional IRA into a Roth IRA.

Since you convert it quickly, there's usually little to no growth to be taxed during the process. The end result? You've successfully moved money into a Roth IRA where it can grow and eventually be withdrawn completely tax-free in retirement. We walk through all the nuances, including how to avoid the pro-rata rule, in our detailed guide on the Backdoor Roth IRA conversion process.

Supercharge Your Savings with the Mega Backdoor Roth

If you're looking to save an amount that truly dwarfs the standard IRA limits, the Mega Backdoor Roth strategy is an absolute game-changer. This approach can allow you to funnel up to an additional $46,000 (for 2024) into your Roth accounts, on top of your regular contributions.

This whole strategy hinges on a specific feature in your 401(k) plan: the ability to make after-tax, non-Roth contributions. You absolutely have to check with your plan administrator first, because not all plans offer this option.

If your plan gives you the green light, you can contribute money after taxes have already been paid, all the way up to the overall IRS limit for 401(k)s ($69,000 in 2024). That after-tax chunk can then be converted into a Roth IRA or an internal Roth 401(k), creating a massive influx of capital into a tax-free growth vehicle. It’s one of the most powerful tools available for high-net-worth individuals to maximize retirement savings quickly.

Specialized Plans for Entrepreneurs and Consultants

If you're a business owner, consultant, or have a variable income, you aren't stuck with the standard options. There are specialized retirement plans built specifically for the unique cash-flow situations of the self-employed, and they come with exceptionally high contribution limits.

• Solo 401(k): This is perfect for a business owner with no employees (other than a spouse). You get to contribute as both the "employee" and the "employer," which can let you sock away up to $69,000 annually.
• SEP IRA: A Simplified Employee Pension (SEP) IRA lets you contribute up to 25% of your compensation, with a ceiling of $69,000. The big advantage here is flexibility; you can adjust how much you contribute each year based on how well your business is doing.

These plans give you the agility to save aggressively in your best years—something a standard corporate 401(k) just can't offer.

This flowchart shows how these foundational steps—maxing out contributions and getting the full employer match—create the launchpad for the advanced strategies we've just discussed.

Nailing this basic sequence is what allows compounding to really work its magic and sets the stage for true wealth accumulation.

Optimize Your Portfolio With Strategic Asset Location

Pouring money into retirement accounts is just the first step. Think of contributions as the fuel for your retirement engine, but it's your investment strategy that truly determines how far and how fast you'll go. Just saving isn't enough; you need to make that money work, and that comes down to two concepts that are often used interchangeably but are critically different: asset allocation and asset location.

Getting this right is especially important for high-net-worth investors. Successful people often fall into the trap of being overly conservative with their investments. While playing it safe feels prudent, it often means your portfolio can't outpace inflation. That's a slow, silent way to lose purchasing power and a common retirement savings mistake.

Finding Your Ideal Asset Allocation

Let's start with the basics. Asset allocation is simply how you divide your money among different investment types—stocks, bonds, cash, and alternatives—to strike the right balance between risk and potential reward. Your personal mix depends entirely on your timeline, how you feel about risk, and what you're trying to achieve.

A classic mistake is being too light on stocks. Yes, they’re more volatile in the short term, but equities have historically delivered the long-term growth needed to build serious wealth. Without enough exposure to stocks, a portfolio can just stagnate.

This isn't a niche problem; it's a global one. A fascinating Fidelity global retirement survey showed that workers around the world are often far too conservative, with their stock allocations lagging by as much as 35% to 65% for their age. That's a massive, self-imposed limit on their retirement's growth potential.

Key Takeaway: Your asset allocation isn't a "set it and forget it" decision. A 35-year-old executive should have a much more aggressive, stock-heavy portfolio than a 65-year-old who's about to start drawing income. The idea is to slowly pivot from a growth focus toward capital preservation as retirement gets closer.

The Power of Asset Location

Once you've settled on your ideal mix of assets, the next move—the one that separates the pros from the amateurs—is asset location. This is all about where you hold each investment to legally and strategically minimize your tax bill, a key part of how to maximize retirement savings.

The principle is simple but incredibly effective:

• Tax-Advantaged Accounts (401k, Traditional IRA): This is where you should stash your least tax-efficient assets. Think about investments that throw off a lot of taxable income, like corporate bonds, high-dividend stocks, or actively managed funds with high turnover.
• Tax-Free Accounts (Roth IRA, Roth 401k): These accounts are gold. This is the perfect home for your assets with the highest growth potential, like individual growth stocks or aggressive equity funds. Decades of compounding growth can be withdrawn completely tax-free.
• Taxable Brokerage Accounts: Use these for your most tax-efficient holdings. This includes things like buy-and-hold individual stocks, broad-market index funds, and ETFs that don't generate many taxable events. Tax-free municipal bonds are also a perfect fit here.

A Quick Scenario: Putting It Into Practice

Let's look at Sarah, an executive with a traditional 401(k), a Roth IRA, and a taxable brokerage account. Her target allocation is 70% stocks and 30% bonds.

• The Common Approach: Sarah could simply hold a 70/30 split within each of her three accounts. It's easy, but it leaves a lot of money on the table for the IRS.
• The Strategic Asset Location Approach: Instead, Sarah puts all her bonds (the tax-inefficient part) inside her tax-deferred 401(k). She then fills the rest of her 401(k) and her entire Roth IRA with her highest-growth stocks. Finally, her taxable account is reserved for tax-efficient index ETFs.

This simple change doesn't alter her overall risk profile one bit, but over decades, it can dramatically boost her net, after-tax returns by sheltering income and growth from the taxman. For those with access, certain 401(k) plans also offer institutionally priced funds like Collective Investment Trusts that can be a cost-effective way to get this exposure.

One last thing: don't forget to rebalance at least once a year. The market will always cause your carefully planned allocation to drift. Rebalancing is a disciplined way to "buy low and sell high" by trimming assets that have done well and buying more of those that have lagged, keeping your strategy locked in.

Beyond the Basics: Tapping Into Specialized Retirement Plans

Once you've maxed out the usual suspects like your 401(k) and IRAs, it's time to think bigger. Standard accounts are great, but they’re built for the masses. For executives, high earners, or professionals with less conventional careers—think athletes or entertainers—sticking only to these plans is like leaving money on the table.

Your financial picture is unique, and your retirement strategy should be, too. This is where we move into more advanced vehicles that can help you defer significant income, unlock better tax advantages, and weave your retirement goals into your overall wealth strategy. These retirement saving tips are for those looking to accelerate their wealth accumulation.

For the C-Suite: Non-Qualified Deferred Compensation

If you're a senior executive or a highly compensated employee, a Non-Qualified Deferred Compensation (NQDC) plan is probably one of the most powerful tools in your arsenal. The beauty of an NQDC plan is its simplicity and power: unlike a 401(k), there are no government-imposed limits on how much you can contribute. This lets you defer a hefty chunk of your salary, bonus, or even equity compensation.

Here’s how it works. You make an election to set aside a portion of your earnings, and your company agrees to pay it back to you later on, usually after you retire. The upside is twofold:

1. A Powerful Tax Deferral: You don't pay income tax on that money today. You only pay tax when you actually receive the cash in retirement, which is often a time when you’re in a lower tax bracket.
2. Go Beyond the Limits: You can sock away far more than the standard $23,000 401(k) limit, which can dramatically speed up the growth of your retirement savings.

Now, there is a catch. NQDC assets are technically part of the company's general assets until they're paid out. This means they are exposed to the company's creditors. So, before you go all-in, you have to be confident in your employer's long-term financial health.

The Ultimate Stealth Retirement Account: The HSA

Many people see the Health Savings Account (HSA) as just a way to pay for doctor visits, but that's a huge mistake. Frankly, it’s one of the best-kept secrets in retirement planning and arguably the most tax-efficient account available. If you have a high-deductible health plan (HDHP), you get access to an incredible triple-tax advantage.

What makes it so potent?

• Contributions are tax-deductible, which immediately lowers your current income tax bill.
• The money inside the account can be invested and grows completely tax-free.
• Withdrawals for qualified medical expenses are also 100% tax-free, at any time.

Think about that. No other account gives you a tax break on the way in, tax-free growth, and tax-free withdrawals. After you turn 65, it gets even better. The HSA essentially converts into a traditional IRA—you can pull money out for any reason and just pay ordinary income tax. But if you use it for medical costs, which are almost inevitable in retirement, it remains completely tax-free. It’s the perfect way to build a dedicated, tax-free fund for future healthcare needs.

Tying Retirement and Estate Planning Together

When you’re dealing with substantial wealth, planning for retirement isn't just about making sure you have enough money to live on. It becomes part of a much larger conversation about legacy, family, and how to pass your assets on as efficiently as possible.

The focus shifts from simply accumulating funds to strategically preserving and transferring that wealth. This is where sophisticated trust structures and a more integrated approach become absolutely essential.

For instance, you can name a trust as the beneficiary of your IRA or 401(k). Doing this gives you far more control over how those assets are eventually distributed to your heirs, protecting the inheritance from poor decisions, creditors, or a messy divorce. It’s a complex move that requires a coordinated effort between your financial advisor and estate planning attorney, but it ensures your retirement savings do more than just fund your golden years—they become a cornerstone of your family's legacy.

Manage Your Plan Proactively To Close Any Gaps

Getting your retirement plan on paper is a great first step, but it’s just that—a first step. Think of it less as a finished document and more as a living blueprint for your future. A truly effective strategy has to evolve with your life, your ambitions, and the economic climate.

This is why the old “set it and forget it” approach just doesn’t cut it anymore, especially when significant wealth is involved. Promotions, new business ventures, or changes in your family structure all have a ripple effect on your long-term financial needs. Staying on top of your plan ensures it’s always aligned with where you are now and where you’re headed. A proactive approach is essential to maximize retirement savings.

Stress-Testing Your Financial Future

You wouldn't want to find out your roof leaks during a hurricane. The same principle applies to your portfolio. Instead of waiting for a market downturn or a nasty bout of inflation to reveal the weak spots, we need to proactively stress-test your plan. This means running "what-if" scenarios to see where the vulnerabilities lie.

We need to ask the tough questions:

• Market Volatility: What happens to your nest egg if the market takes a 20-30% dive? Is your asset allocation truly diversified enough to handle that kind of storm without derailing your retirement timeline?
• Inflationary Pressures: If inflation sticks around, will your returns be enough to protect your purchasing power? This is a huge concern for many, with 67% of people worried about its long-term impact.
• Longevity Risk: What if you live well into your 90s, or even past 100? A long, healthy life is a wonderful thing, but your plan has to be built to fund it, potentially for 30 years or more.

For high-net-worth individuals, this is where professional guidance is non-negotiable. An experienced advisor can run the kind of sophisticated projections needed to pressure-test your assumptions and find the gaps before they become real problems.

A truly secure retirement is built on a strategy designed to be adaptive and resilient. Regular reviews and stress-testing transform your plan from a hopeful document into a reliable roadmap, capable of navigating unforeseen economic challenges.

Closing the Retirement Savings Gap

To stay on track, you first need a clear target. For those with international ties, it can be useful to look at benchmarks from other countries and determine how much you need for retirement in Canada, for instance, as a point of comparison.

Even in the U.S., where retirement systems are relatively strong, there's a significant $442,000 savings gap for the average American. They’ve managed to save about $1.048M but will likely need closer to $1.490M.

At Commons Capital, we tackle these gaps head-on by pushing our clients’ contribution rates into the 15-20% range, which lines up with Fidelity's recommended 13-21% guideline. We get there by using every tool at our disposal, from mega backdoor Roth conversions to highly customized family office strategies. This isn’t just about saving more; it’s about strategically managing your wealth to build genuine, lasting financial security.

Got Questions About Retirement Savings? You're Not Alone.

As you build significant wealth, the simple rules of thumb for saving often stop applying. The financial landscape gets more complex, and even the sharpest minds find themselves with nuanced questions. Let's tackle some of the most common ones we hear from our clients, with practical, real-world advice you can act on.

I'm Already Maxing Out My 401(k). What's Next?

Excellent. Hitting your 401(k) max is the price of entry, but it’s not the whole game. This is where you can really start to pull away from the pack by layering on more sophisticated strategies. The right move depends on your income and what your employer’s plan offers.

First up, look into a Backdoor Roth IRA. If your income is too high to contribute to a Roth IRA directly (which it likely is), this is your best friend. You’ll make a non-deductible contribution to a Traditional IRA and then immediately convert it to a Roth. It's a clean, effective way to get more money into that powerful tax-free growth bucket.

Next, find out if your 401(k) plan allows for after-tax contributions. This is the key that unlocks the Mega Backdoor Roth, a powerful strategy that can let you funnel tens of thousands of additional dollars into a Roth account each year. If your plan doesn't offer this, a Health Savings Account (HSA) is often your next best bet, assuming you have a high-deductible health plan. With its triple-tax advantage, it's one of the best long-term investment vehicles out there.

And of course, don't forget a standard taxable brokerage account. Consistently funding this account with tax-efficient investments, like broad-market ETFs, is the foundational way to keep building wealth outside of retirement-specific accounts.

How Should My Strategy Change as I Get Closer to Retirement?

Your financial game plan absolutely needs to shift as retirement comes into view. That 5-to-10-year window before you stop working is a critical transition period. Your focus pivots from aggressive growth to capital preservation and creating a reliable income stream.

The biggest change is usually a gradual de-risking of your portfolio. This doesn’t mean you panic and sell everything. It means you methodically dial back your exposure to stocks and increase your holdings in less volatile, income-generating assets like high-quality bonds. The goal here is simple: lock in your hard-earned gains and shield your nest egg from a nasty market downturn right when you need it most.

As you approach retirement, the central question changes from "How much can I make it grow?" to "How do I create a reliable, tax-efficient paycheck for myself?" This requires a detailed cash-flow plan and a smart withdrawal sequence.

This is also when you need to nail down your withdrawal strategy. The order you tap your accounts—taxable, tax-deferred, and tax-free—can have a massive impact on your tax bill. A well-thought-out plan can save you a fortune over your lifetime. At the same time, you need to be ready for Required Minimum Distributions (RMDs), which now kick in at age 73, to avoid some very steep penalties.

Is It Ever Too Late to Seriously Boost My Savings?

While compounding is a powerful force that gives a huge edge to an early start, it is absolutely never too late to make a major difference in your retirement picture. If you're in your later career years, you have some potent tools at your disposal to play catch-up.

If you're 50 or older, you have to take full advantage of catch-up contributions. This allows you to sock away an extra $7,500 into your 401(k) and another $1,000 into your IRA each year. Over a decade, that alone can add a very significant amount to your final number.

Beyond that, it's time to get serious about your savings rate. If your cash flow allows, pushing your savings rate to 20% of your income or even higher can have a profound impact. For high earners, advanced strategies like the Mega Backdoor Roth or even a defined benefit plan can supercharge this final sprint. And never underestimate the power of working just a few more years—the combination of more contributions, more time for investments to grow, and delayed withdrawals can dramatically improve the size and longevity of your retirement fund.

Should I Pay Off My Mortgage Early or Invest More for Retirement?

This is a classic debate, but for most high-net-worth individuals, the math almost always points toward prioritizing retirement savings over aggressively paying down a mortgage. The decision really comes down to a simple comparison of potential returns.

Historically, the long-term returns from investing in a diversified portfolio have been in the 7-10% range annually. The interest you save by paying off your mortgage, on the other hand, is likely a low fixed rate—maybe 3-5% in recent years. By choosing to pay down the mortgage, you're effectively passing up the chance to earn that higher return in the market.

Your first dollar of savings should always go toward getting your full employer 401(k) match. That's a guaranteed 100% return on your money; you can't beat it. After that, your focus should be on maxing out every tax-advantaged retirement account available to you. Only after you've checked all those boxes should you think about sending extra cash to the mortgage company versus a taxable investment account.

Navigating these complex financial decisions requires a clear strategy and expert guidance. The team at Commons Capital specializes in creating personalized wealth management plans that address the unique challenges and opportunities faced by high-net-worth individuals and families. To learn how we can help you build and preserve your wealth for generations to come, visit us at our website.