1946: The Quiet Money Mistakes High-Earning Women Make

What It Covers

Financial adviser Maggie Jondro joins Farnoosh Torabi to identify the specific money mistakes high-earning women make, covering tax diversification strategy, RSU and stock option tax traps, company stock concentration risk, breadwinner relationship dynamics, and why retirement saving must begin regardless of career trajectory.

Key Questions Answered

• •Tax Account Diversification: Maxing out only pretax accounts like a 401(k) or SEP IRA creates a future tax problem. Required Minimum Distributions at age 75 can push retirees into the same or higher tax bracket than expected. A balanced mix of pretax, Roth, and taxable brokerage accounts gives more flexibility and tax control in retirement.
• •RSU Tax Timing: Restricted stock units are taxed as ordinary income the moment they vest, creating a first tax event. Selling the shares triggers a second potential tax. Employer withholding often covers insufficient amounts, especially for dual-income households filing jointly. Proactively adjusting tax elections when RSUs are granted prevents a large unexpected bill at year-end.
• •Company Stock Concentration Risk: Holding more than 10% of net worth in a single employer's stock creates dangerous concentration risk, regardless of confidence in the company. Setting a predetermined limit-order sell price removes emotional decision-making. Proceeds should be reinvested into diversified assets, capturing remaining upside on a smaller position while protecting overall wealth.
• •Breadwinner Dynamics and Financial Involvement: High-earning women sometimes deflect financial management to male partners to reduce perceived power imbalance, despite data showing women generate better investment returns than men. Both partners should engage a neutral third-party financial adviser they jointly select, ensuring the lower-earning or non-earning spouse maintains full visibility into household finances and assets.
• •Retirement Savings Priority: Unlike housing, education, or vehicles, retirement cannot be financed through borrowing. Layoffs, illness, or family demands can end careers earlier than planned, making early and consistent saving non-negotiable. Starting contributions in any account type — Roth, brokerage, or 401(k) — as soon as possible gives compound growth the maximum time to work.