10 Keys to Financial Planning for Executives
- Mitch Zweber
- Oct 22
- 11 min read
Updated: 23 hours ago
What do I need to know about financial planning for executives?
If you’re an executive aiming to achieve a work-optional lifestyle, financial planning is key.
The cornerstone of financial planning for executives is tax strategy. Since executive compensation plans are often complex, encompassing salary, bonuses, stock options, restricted stock units (RSUs), and other deferred compensation and benefit plans, tax planning can make a significant difference.
Most executives are excellent at building wealth, but the real challenge is withdrawing those assets in a way that preserves them and minimizes taxes. In addition, disciplined cash flow, proper investment allocation, the right insurance, and effective estate planning are all essential to protecting your lifestyle and legacy.
Mike Zweber is a financial professional focusing on portfolio management, retirement planning, estate planning, and goal funding. His approach to financial planning is holistic, addressing each client's needs, goals, and aspirations to build an individualized plan to pursue financial success. He believes in educating clients to empower them to make confident financial decisions.
How Can Executives Plan for a Comfortable Work-Optional Lifestyle?
When it comes to financial planning for executives, the biggest factor is always tax strategy.
Most executives don’t just have a salary, and complex executive compensation packages often carry substantial tax liabilities, despite their potential upside. Executives typically have bonuses, restricted stock units (RSUs), stock options, and other deferred compensation plans.
This multi-faceted approach to executive compensation creates complexity when it comes to unwinding assets.
I see a lot of executives who are excellent at accumulating wealth but run into real roadblocks when it comes to withdrawing those assets in a tax-efficient way. But minimizing tax is a critical part of wealth preservation and requires careful attention.
Other important financial planning steps for executives include aiming to ensure that investments are allocated properly and creating flexibility with taxable, tax-deferred, and tax-free accounts.
It’s also important to have enough insurance and to save consistently to maintain your lifestyle in the future.
I’ve met executives earning half a million to a million dollars a year, but spending the same amount. You can’t put $20,000 away when you’re spending $40,000 a month. In other words, cash flow discipline matters just as much as income level; without it, even top-earning executives can run into financial challenges later.
Estate planning also matters, especially in states like Minnesota, where estate taxes kick in at $3 million.
These are the key areas every executive should cover. For more details on what to consider when planning for retirement or a work-optional lifestyle, keep reading.
If you’re 5-7 years away from retirement and are not working with a tax-savvy fiduciary financial advisor, reach out and schedule a call with 360 Financial.
Key Takeaways:
Tax strategy: Tax planning is the biggest issue for executives. Because executives typically have complex compensation plans including a salary, bonuses, RSUs, stock options, and deferred comp, the complexity of how to unwind those assets and minimize taxes is the number one planning challenge.
Planning withdrawals: Executives are often very good at accumulating wealth, but hit real roadblocks when it comes to withdrawing assets in a tax-efficient way.
Cash flow discipline: Even top earners can undermine their future if they spend as much as they make. Saving enough is critical if you want to maintain your lifestyle while working less in the future.
Holistic planning: It’s not enough to manage investments day-to-day. You need a comprehensive wealth plan that integrates tax, estate, insurance, financial objectives, and timelines.
10 Keys to Financial Planning for Executives
1. Set Clear Financial Goals
When would you like to retire or achieve a work-optional lifestyle?
This is one of the most important goals you can set, as it creates a target that your financial advisor can use to develop an optimized tax and investment strategy.
Next, what would you like your work-optional lifestyle to look like? Most people don't reduce their expenses after retirement. To save enough to maintain your lifestyle in the future, you need to have a clear picture of how you'll spend your time and money during your work-optional years.
2. Make Sure You're Saving Enough
When it comes to long-term security, cash flow discipline matters as much as salary.
I’ve met executives making $500K–$1M who spend just as much. But you can’t save meaningfully if your lifestyle consumes nearly all your income. For example, if you're earning $500k per year after taxes, but you spend $450k, you're only saving 10% of your income.
The question you should be asking is: Will this be enough to fund my lifestyle for 30+ years after I ramp down at work?
It's more common than ever to live well into your 90s.
In fact, according to a study by the US Census Bureau, "the 90-and-older population has been growing more rapidly than those aged 85–89 and other younger age groups among the older population aged 65 and over."
If you choose to retire or move into consulting or less lucrative but purpose-driven work in your 60s, you may need your investments to generate 30 years of income (or more).
Assess your timeline and investment portfolio to make sure you're investing sufficiently in your future.
3. Optimize Compensation and Benefits
An important part of wealth building as an executive is ensuring that compensation and benefits will provide you with the best possible outcome.
You should work with a tax-savvy financial advisor who can model different income and distribution scenarios for you on an annual basis. A good financial advisor will create a tailored tax and investment strategy based on your goals.
In general, during your working years, make sure to maximize contributions to non-qualified plans, such as SERPs or other non-qualified plans (if eligible), and take full advantage of employer-matching contributions in 401(k) or executive pension plans. Additionally, review executive insurance offerings (e.g., disability, long-term care, and group life insurance) and consider whether supplemental private coverage is needed.
Finally, align the timing of income recognition with charitable giving, tax-loss harvesting, or Roth conversion strategies to improve tax efficiency. Ideally, you should work through this optimization strategy with your financial advisor.
4. Exercise Stock Options at the Right Time
Timing when you exercise stock options can have a big impact on your tax bill.
Too often, executives focus only on market price. But without a tax strategy, that approach can backfire.
If you hold Incentive Stock Options (ISOs) or Non-Qualified Stock Options (NSOs), talk with your advisor about exercising during lower-income years, such as during a sabbatical, career break, or post-retirement window. This can help you reduce tax drag and avoid triggering unnecessary Alternative Minimum Tax (AMT) or bumping you into a higher bracket.
A smart stock option strategy should coordinate with your broader financial plan, not just market performance.
5. Be Strategic About RSU Vesting and Tax Planning
RSUs are taxed as ordinary income when they vest (not when you sell them), which can create a significant tax liability.
To avoid surprises, work with your advisor to plan for taxable events in advance. It may make sense to sell some shares immediately after vesting to cover the tax and reduce concentrated risk. Holding too much company stock can limit your flexibility and expose your portfolio to unnecessary volatility.
Work with your advisor to plan liquidity strategies around large vesting events, which will help you avoid concentrated risk and surprise tax bills.
6. Maximize Retirement Planning Opportunities
Executives often have access to advanced retirement tools beyond the standard 401(k).
Maximize all tax-advantaged accounts while your income is high. If your employer offers a Non-Qualified Deferred Compensation (NQDC) plan, coordinate deferral and payout timing with your retirement goals and future tax brackets. These plans can reduce current taxable income but require careful planning to avoid liquidity issues later.
In addition, if you have substantial company stock in your 401(k), ask your advisor if a Net Unrealized Appreciation (NUA) strategy could reduce your tax burden in retirement.
7. Do Strategic Tax Planning Annually
Executives face complex and shifting tax exposure.
Annual tax planning with a financial advisor and a qualified tax professional can help reduce liabilities across income, capital gains, and estate taxes. Strategies like tax-loss harvesting, Roth conversions, charitable giving, and timing of income recognition should be reviewed each year.
For executives with ISOs, modeling AMT exposure annually is critical to avoid surprise tax bills.
If you’re building generational wealth, estate planning also plays a critical role, especially in high-tax states. Proactive planning can preserve more of your wealth and ensure it supports your goals, both during your lifetime and for future generations.
8. Update Your Legacy and Estate Plan Annually
If you’re an executive, estate planning is not optional. It’s essential.
The reality is that your net worth often grows faster than you expect. In Minnesota, for example, the estate tax threshold is $3 million. That includes everything: not just investible assets, but real estate, insurance, company stock, deferred compensation, retirement accounts, property, and any other assets you own.
That total number is what matters, and for many executives, it’s bigger than they think.
For example, if you live in a $1 million home, have a $1 million life insurance policy, and $1.5 million in investible assets, you’re over the state limit in Minnesota.
Meanwhile, executives at fast-growing companies may have $10M+ in company stock or RSUs. When you add real estate and insurance, you could be quickly moving towards the US federal gift/estate tax exemption limit.
That means even executives who feel like they’re just “comfortable” may face estate taxes.
The bigger picture is this: as your assets grow, so do your estate planning needs. Estate planning gives you a framework to align your wealth with your long-term vision, so you know your assets will support the people and causes that matter most.
Your financial advisor should be guiding you through the estate planning process and helping you assess if you need to make any changes as your situation evolves.
9. Manage Risk Effectively
Insurance
Insurance is an often-overlooked gap for high earners. If something happens to you, can your spouse maintain the lifestyle you’ve built? Make sure you’ve covered that downside so the plan you’ve worked for doesn’t collapse if life goes sideways.
Emergency Fund
In addition, do you have a strong emergency fund? Many advisors recommend having enough liquidity to cover 3-6 months of expenses without needing to make withdrawals from your investment accounts. Work with your advisor to identify an appropriate cash cushion and ensure you have the liquidity in place to cover all potential emergency scenarios.
Diversified Portfolio
Go back to the basics: make sure you have a diversified portfolio. Your investments should be allocated appropriately for your needs, risk tolerance, and time horizon. Too often, people assume high income equals a set-it-and-forget-it approach. But your asset allocation should match your goals and when you’ll need the money.
10. Manage Liquidity and Cash Flow
It's critical that you have enough liquidity and cash flow so that you have choices when you need cash.
Create different buckets based on tax treatment, including taxable, tax-deferred, and tax-free. Having multiple types of accounts creates flexibility and gives you options to manage taxes and withdrawals in different scenarios.
Build Your Financial Advisory Team
Many firms manage money well operationally, but don’t provide a holistic plan that ties taxes, estate, healthcare, and legacy goals together.
Your wealth should be managed with those broader goals in mind since every household is different, and planning should be customized.
Do your due diligence. Ask about the process, ongoing updates to your plan, fiduciary duty, and whether the advisor educates you on options and the pros/cons of investment moves. Find out if the firm has CPAs in-house who stay up to date on changes in tax laws that may affect your strategy.
Comfort and trust matter most.
You want someone who explains their recommendations and helps you arrive at the choice, not just tells you what to do.
Major changes such as a promotion, job change, imminent retirement, inheritance, or moving states are all reasons to seek professional guidance. If you don’t have the time or the bandwidth to manage complexity, that’s another clear signal to bring in a wealth management team.
Don't Get Misled by Surface Answers
Don’t rely on surface-level answers from the internet.
People often stop at a quick Google result or an AI overview. Those surface answers can be misleading. Fact-checking and digging deeper are necessary steps if you want a decision that actually fits your complex situation.
In addition, articles like this one can only cover the basics.
As an executive with a high income, your situation is complex. There are no cookie-cutter solutions that will work for every single top income earner. You need a customized plan based on your timeline and goals.
Final Thoughts
The biggest key for executives is tax strategy.
You rarely just have a salary; you have bonuses, RSUs, stock options, and other deferred compensation plans. That mix creates real complexity. If you don’t plan how to strategically draw down those assets, you can end up paying far more tax than you need to when you transition to the next phase of life.
In addition, if your investment planning and diversification are lacklustre, you could be risking your future work-optional lifestyle.
I recommend that you work with a holistic wealth management team that can help you with every aspect of your financial picture, including portfolio diversification, risk management, and tax planning.
Common Questions
What are some things to avoid when looking for a financial planner?
Work with an advisor who is a fiduciary and cares about your goals. Avoid advisors who don’t have a clear process, who aren’t fiduciaries, or who push products over planning. You want a proactive, tax-savvy team that customizes advice to your goals. You shouldn't be working with a time that provides cookie-cutter solutions.
What does wealth management and wealth planning for executives typically include?
Wealth management for executives should include tax planning, investment strategy, portfolio management, equity comp guidance, risk management, estate planning, and cash flow planning. They should be helping you manage all aspects of your financial life.
What tax-saving opportunities are available to corporate executives?
Stock option timing, deferred comp planning, tax-loss harvesting, Roth conversions, and charitable giving are all tools. The key is coordinating these strategies with your income timeline to reduce tax drag over time.
Should executives set up a trust as part of their financial plan?
If you have significant assets, especially in a high-tax state, a trust may be able to help reduce estate taxes. Trusts also keep your estate private, avoid probate, and direct your legacy. If control and tax efficiency are a priority, a trust may be the right move. But you should seek the guidance of a financial advisor and an attorney.
What’s the difference between financial planning and wealth management for executives?
Financial planning is a one-time roadmap. Wealth management is ongoing. It brings together taxes, investments, compensation planning, and estate strategy under one roof to support your goals long-term. Executives need both. You should work with an advisor team that provides financial planning as part of their wealth management process.
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About the Author
Mitch Zweber
Mitch is a financial professional focusing on portfolio management, retirement planning, estate planning, and goal funding.His approach to financial planning is holistic, addressing each client's needs, goals, and aspirations to build an individualized plan to pursue financial success.
He believes in educating clients to empower them to make confident financial decisions. What excites Mitch ost about his job is meeting new clients and contributing to their pursuit of financial success.
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About 360 Financial
360 Financial is an independent wealth management firm with a team of specialized financial advisors and financial planners. As fiduciaries, 360 Financial’s advisors provide services to business owners, entrepreneurs, and professionals. We help investors with sudden wealth, retirement planning, tax planning, estate planning, and business financial planning.
Headquartered in Minnesota, we serve investors across the US with online and in-person wealth management and financial planning services.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
Investing involves risk including loss of principal. No strategy assures success or protects against loss.
This information is not intended to be a substitute for individualized tax advice. We suggest that you discuss your specific tax situation with a qualified tax advisor.
There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk.
A Roth IRA conversion—sometimes called a backdoor Roth strategy—is a way to contribute to a Roth IRA when income exceeds standard limits. The converted amount is treated as taxable income and may affect your tax bracket. Federal, state, and local taxes may apply. If you’re required to take a minimum distribution in the year of conversion, it must be completed before converting.
To qualify for tax-free withdrawals, you must generally be age 59½ and hold the converted funds in the Roth IRA for at least five years. Each conversion has its own five-year period, and early withdrawals may be subject to a 10% penalty unless an exception applies. Income limits still apply for future direct Roth IRA contributions
