BRIDGEPORT, W.Va (WDTV) - Question: "Why do you think it so hard for high income earners to have enough money to retire?"
Answer: (John Halterman, Beacon Wealth Management) "My clients earn a tremendous amount of money. They do have challenges. A lot of times people think if you earn a high income that automatically retirement should be easy. I'll give you a couple examples of why it's not always so easy.
"Number one, taxes. Taxes kill high income earners because a lot of times high income earners are paying over 40 to 50% of their total income due to various taxes. What I always tell people is, if you can find solutions to reduce your tax burden by just 10 or 20% that's 220% more money that you can outside.
"Number two I think that high income earners a lot of times are people who don't mind risks. they take risks also in their investments. fortunately sometimes mitigating risk can be a big deal because it's not always how much you make , it's also what you don't lose. I always tell people, getting a good average really helps when you don't take big losses at times of market recessions.
"The third thing that comes to mind is that high income earners unfortunately, don't always save enough money because they have very high lifestyles. Retirement plans don't always allow for them to make high contributions relative to the income. So if a person is making $500,000, a retirement plan such as a 401(k) only allows an annual contribution of 18,000.
"Unfortunately as a percentage of an income that's not a very high amount. If a person can work around those three things and if you're high income owner, you can definitely retire successfully. you just have to pay attention to those few things."