Are You Making These Retirement Mistakes? How a HENRY Can Prepare

Being a high earner has many perks. But a lack of money anxiety often isn’t one of them. If you make good money, but still worry about falling short in retirement, you might be a HENRY.

HENRY stands for “high earner, not rich yet.” And according to a new NerdWallet survey conducted online by The Harris Poll, 30% of non-retired HENRYs — defined here as Americans with a household income of $200,000 or more — don’t have confidence they’ll have enough money to retire comfortably, despite their high earner status.

“Even though HENRYs earn above-average money, they often face higher expenses living in costly areas,” says Kate Ashford, investing specialist for NerdWallet.

“They also may have higher student loan debt and fewer years in the workforce due to the schooling required to land their high-earner jobs. Combined with lifestyle creep, these challenges can make it harder to save enough for retirement.”

Here are five retirement mistakes HENRYs make and how to avoid them to set yourself up for future prosperity.

It’s hard to reach an ill-defined goal. According to the survey, just 41% of HENRYs with retirement accounts have a specific retirement savings goal amount. This may explain why some high earners aren’t confident about saving enough — they don’t know what “enough” even means.

Without access to a very reliable crystal ball, aspiring retirees have to make some assumptions about their life after work in order to determine a reasonable retirement goal. But there are a couple rules of thumb that can help you get started.

Experts say you may need 70% to 90% of your pre-retirement income to cover costs in retirement. This is because you’ll no longer owe payroll taxes or need to save for, well, retirement. You can then use the 4% withdrawal rule to calculate a retirement goal amount. This rule says, based on historical performance, that you can withdraw 4% of your nest egg annually, and likely not run out of money for at least 30 years.

Let’s say your household income is $250,000 and you’ll need 70% of that, or $175,000 per year, in retirement. Multiply the $175,000 by 25 to get an overall retirement savings goal number. In this case, it would be $4,375,000. (Multiplying the annual income by 25 gets you the total. This is the inverse of the 4% rule — dividing the total by 4% to get the annual income.)

This is simply a starting point and may not be perfect. The amount you need will depend on how you want to spend your retirement. Plan on paying for grandkids’ college or globetrotting in your golden years? Save more. But if the mortgage on your forever home is paid off and your primary hobby is gardening, you may be able to save less.

Lifestyle creep is often criticized, but not inherently bad. If you’re spending more as you make more, it’s a smart move to keep fixed costs in check — high earning jobs can be harder to replace than lower paying jobs, in case of layoff or burnout.

The 50/30/20 budget suggests spending 50% of your income on needs, 30% on wants and 20% toward debt and savings. As a high earner, you might be tempted to take on a large mortgage payment or car lease, as long as it stays within that framework of 50% “needs”. But if you limit fixed costs to less than you can technically afford now, you can save more for the future and even take a pay cut later if you decide to make a career change.

Around 1 in 6 HENRYs with retirement accounts (16%) decreased their retirement contributions in the past 12 months, according to the survey. There are times in life, even for high earners, when pulling back on retirement savings may be necessary. Whether you’re focusing on a more immediate goal, like paying off debt or building a bigger emergency fund, or you’re in a costly season of life, like covering childcare costs for young kids, sometimes it makes sense to save less for the future temporarily to focus on the present.

That said, it’s a good idea to get back to prioritizing investing for your future when you can. For many, consistent contributions and time to grow are key to reaching a healthy retirement savings balance.

It’s also recommended that even if you have to pull back on investments temporarily, strive to set aside at least enough to get the full match on an employer-sponsored retirement account, like a 401(k), if your company offers this benefit.

“Set it and forget it” can be great advice for investors who might otherwise act rashly during times of market volatility. But neglecting your investments could also lead to higher fees than necessary and an out-of-whack asset allocation.

According to the survey, 16% of HENRYs with retirement accounts have never changed the investments in their accounts since opening. Of course, it’s possible they picked the best investment options for them from the start. But if you haven’t looked at your investments lately, it’s worth making sure they still work for you.

A “good” retirement portfolio will depend on several factors, including a person’s risk tolerance, goals and timeline. But it’s smart to make sure your investments are well-diversified and that high fees aren’t eating up returns. High fee investments don’t necessarily mean higher returns, so you may opt for the lowest cost funds that fit your diversification strategy.

Since market fluctuations can change how your portfolio is allocated — how much is invested in stocks versus bonds, for instance — over time, rebalance at least once per year to keep your asset mix in line with risk tolerance and goals. This doesn’t necessarily mean changing the investments you hold, but rather getting your allocation back to where you want it. If you aren’t sure where to start, search for “rebalance account” on your brokerage’s website or contact the brokerage by calling their helpdesk or using the online chat option.

In the past 12 months, more than 1 in 10 HENRYs with retirement accounts (11%) say they withdrew funds from their accounts for non-retirement reasons, according to the survey. Generally, 401(k) and traditional IRA funds cannot be withdrawn before age 59 ½ without penalty (though there are exceptions to this rule). Even if you’re able to withdraw without the penalties and fees, it’s not advisable unless you don’t have other options, because early distributions also cost you in future investment returns.

Let’s say you took $50,000 out of your 401(k) at age 35. Left invested, at a 7% annual return, that would have grown to more than $380,000 by age 65. This doesn’t take into account early withdrawal penalties or the potentially higher income tax rate you’ll be subject to at age 35 versus retirement age.

It’s a good idea to leave retirement savings alone until you retire, outside of true emergencies. For everything else you might want some extra cash for, consider alternative options, like saving up over time, taking on low interest debt or reevaluating your plans.

A high income may not wipe out your financial worries, but it can allow you to enjoy money in the present while saving for the future. Avoid these mistakes — or course-correct now — to set yourself up for a comfortable retirement.

This survey was conducted online within the United States by The Harris Poll on behalf of NerdWallet from July 8-10, 2025, among 2,087 U.S. adults ages 18 and older, among whom 137 have a household income of $200,000 or more. The sampling precision of Harris online polls is measured by using a Bayesian credible interval. For this study, the sample data is accurate to within +/- 2.5 percentage points using a 95% confidence level. This credible interval will be wider among subsets of the surveyed population of interest. For complete survey methodology, including weighting variables and subgroup sample sizes, please contact [email protected].

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