Life may feel like a financial struggle in your 20s and 30s, but by the time you reach your mid-40s to late 50s, many people enter their “peak earning years” — a period where you are best-positioned to build real wealth.
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These are the years you should focus on building wealth and accelerating your retirement savings, according to finance expert Suze Orman.
Here are six smart moves, based on Orman’s advice, to make the most of your most financially powerful stage of life.
Your peak earning years are when every financial decision counts more than ever. It’s the time to be strategic — ideally with the guidance of a trusted financial advisor. According to Orman, these are the areas you should pay close attention to at this stage:
Max Out Retirement Contributions: Orman stresses putting away the absolute maximum allowed in tax-deferred retirement accounts such as 401(k)s and traditional IRAs. She also recommends contributing to a Roth IRA if you’re eligible, so you can diversify your tax strategies in retirement.
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Pay Off the Mortgage: Orman urges homeowners age 50 and older to pay off their mortgage as quickly as possible so you don’t have that payment when it’s time to collect Social Security. Keep this in mind if you’re considering upgrading to a more expensive home or taking on a second mortgage — it could delay your retirement timeline.
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Don’t Overfund Education Accounts: While it’s smart to save for your child’s education using tax-advantaged vehicles like 529 plans, Orman warns against over-saving in these plans at the expense of your own retirement. She also encourages teaching kids financial responsibility by having them contribute to their own education costs.
Eliminate High-Interest Debt: Many kinds of debt can prevent you from achieving future financial goals, but especially high-interest debt, like credit card balances. She recommends paying off this debt as quickly as possible. Paying only the minimum and carrying a balance from month to month piles on more interest and more debt, dragging you down in the process.
When you’re in your peak earning years, it’s not just about saving more — it’s about investing smarter. Orman emphasizes making your money work for you through strategic, long-term investment planning.
