Your peak earning years are your biggest wealth-building opportunity. Avoid these mistakes to maximize tax-free growth and build serious wealth.
| Mistake | Cost | Description | Impact |
|---|---|---|---|
Not Maximizing Tax-Advantaged Accounts | $500,000 | Missing employer match or not maxing 401(k)/403(b) costs compound growth. | Max 401(k) ($23,500) + match + backdoor Roth ($7,000) = $500K+ extra by retirement. |
Skipping Backdoor Roth IRA | $300,000 | Income too high for direct Roth, but backdoor strategy still works perfectly. | $7,000/year tax-free growth for 20 years = $300K+ in tax savings vs taxable account. |
Not Using HSA as Retirement Account | $200,000 | Treating HSA like FSA instead of best retirement account (triple tax advantage). | Max HSA ($8,550 family), invest it, pay medical expenses out-of-pocket = $200K tax-free. |
Wrong Asset Allocation for Career Stage | $400,000 | Too conservative (all bonds at 40) or too aggressive (100% stocks with 3 kids). | Poor allocation costs 2-3% annually in returns or excess risk. That's $400K over 15 years. |
No 529 College Savings Plan | $150,000 | Paying for college with high-tax income instead of tax-free 529 growth. | Starting when kids are young: $150K college bill costs only $80K with 529 tax-free growth. |
Paying 1%+ in Advisory Fees | $1,000,000 | AUM fees compound against you. 1% on $2M portfolio = $20K/year forever. | 1% fees for 25 years on growing portfolio = $1M+ in lost wealth vs 0.1% index funds. |
Missing Mega Backdoor Roth | $600,000 | If 401(k) allows after-tax contributions + in-service distributions, you're leaving money on table. | Mega backdoor adds $46,000/year tax-free. Over 15 years = $600K+ extra retirement savings. |
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