By your fifties, you may be in some of the highest-earning years of your legal career and have accumulated substantial wealth. This can be a good time to understand what that wealth now allows you to do, how much of your financial life still depends on your career, and which issues are better understood before they become decisions.
1. Determine What Your Wealth Now Makes Possible
A net worth figure tells you what you own. It does not tell you how much flexibility that wealth provides. Look at your entire financial picture: taxable investments, retirement accounts, cash, real estate, private investments, debt, employer benefits, and the financial interests tied to your legal career. If you are married, include your spouse’s assets, income, benefits, and obligations as part of the same analysis. Accumulated wealth may now support choices that would have been difficult ten years earlier. You may want to work less at some point, help a child buy a home, keep a second residence, travel more, make larger gifts, or support aging parents. The question is how much of that can be done without making your plans overly dependent on continued high earnings.
2. Build More Wealth Outside Your Firm or Employer
The fifties can include some of the highest-compensation years of an attorney’s career. They can also be expensive years. Taxes, partner capital, real estate, education costs, family support, and spending that grew with income can consume a large share of compensation. Look at how much your net worth is increasing each year and where the new wealth is accumulating. Taxable investments and other accessible assets offer a different kind of flexibility than retirement accounts, partner capital, or deferred compensation.
3. Measure How Much of Your Wealth Depends on Your Firm or Employer
A diversified investment portfolio does not necessarily mean your financial life is diversified. For a law firm partner, compensation, partner capital, non-qualified deferred compensation (NQDC), firm retirement benefits, and future payments may all depend on the same firm. For a senior in-house attorney, salary, bonus, company stock, unvested equity, NQDC and retirement benefits may depend on a single employer. Add those interests together. You may be comfortable with the exposure. We believe that what matters is knowing how large it has become and how much of your wealth sits outside that organization.
4. Account for Partner Capital Without Treating It as Available Cash
Partner capital may belong on the balance sheet, but it does not have the same liquidity as a brokerage account. Know the amount invested, whether any of it was financed, and whether additional contributions could be required. The repayment terms matter too, even if you expect to remain at the firm for many years. A lateral move can create a period when a new firm requires capital before the prior firm has returned yours. Partner capital affects current liquidity and can matter in a career decision years before retirement.
5. Map Your Deferred Compensation and Future Payment Schedule
A large NQDC balance can hide a complicated future payment schedule. Review the elections separately. One may begin paying at a different time from another. Several may overlap. Some may coincide with other income. Depending on the arrangement, deferred compensation may also remain an unsecured obligation of the firm or company rather than an asset held in your name. NQDC belongs in the financial plan now because it affects future cash flow, taxes, and how much of your financial future still depends on the firm or company.
6. Coordinate Tax Decisions Across Several Years
Professional income, investment gains, deferred-compensation elections, charitable giving, company equity, retirement-plan decisions, and family gifts can all land in the same tax year. If you are married, your spouse’s income and financial events can also change the picture. Decisions that look sensible on their own do not always fit together. Look across several years when possible. A deferral today may create taxable income later. An appreciated investment position may affect charitable or gifting decisions. Equity compensation may increase exposure to an employer at the same time investments elsewhere are being diversified.
7. Make Sure Your Portfolio Can Fund More Than Retirement
Your investment portfolio may need to support more than future retirement spending. It may also fund family gifts, real estate decisions, philanthropy, major purchases or a change in how much you want to work. Review taxable assets, retirement accounts, cash, real estate and concentrated holdings together. For senior in-house attorneys, employer stock warrants particular attention when current income, accumulated shares, and future equity awards all depend on a single company. For law firm partners, concentration can be less obvious because it appears through compensation, partner capital, and future firm payments.
8. If You Are Married, Coordinate Both Financial Lives
Your spouse’s career, assets, income, retirement accounts, pension, equity compensation, healthcare coverage, and financial priorities might affect decisions you make together. One of you may eventually stop working while the other continues. Healthcare coverage, a pension, a vesting event, or a deferred compensation payment can affect household income and benefits in a particular year. Housing, travel, family support, and charitable giving may also be shared priorities. The financial plan should account for both of you rather than treating your spouse’s finances as a separate plan.
9. Decide How Much of Your Wealth You Want to Use to Help Family
Adult children may need help with graduate school, a first home, or another large expense. Aging parents may begin needing financial support. Some families begin making larger lifetime gifts during these years. Decide how much you want to provide, when you want to provide it, and what you want to keep available for your own needs. Planning ahead can keep each request from becoming a separate financial decision.
10. Reassess the Insurance You Put in Place Earlier
Life and disability coverage put in place earlier in your career may no longer fit your current wealth or family responsibilities. Review what you still need to protect and whether accumulated assets have changed the role insurance plays. Also decide how you would handle a future need for long-term care and whether you intend to insure any of that risk.
11. Update Your Estate Plan for the Wealth and Family You Have Today
An estate plan created when your children were young, and your wealth was much smaller, may no longer fit your circumstances or intentions. Review trusts, wills, powers of attorney, healthcare directives, and beneficiary designations. Your intentions may have changed as your children became adults, your wealth increased, or you began thinking more about what you eventually want to provide for future generations. Lifetime gifts, charitable goals, and the amount you eventually want family members to receive may call for a different plan than the one you created years ago. Law firm partners may also want to understand how partner capital, deferred compensation, and other firm interests are handled in the event of death or disability. Senior in-house attorneys should similarly review the treatment of company equity, deferred compensation, and employer benefits.
12. Build Enough Financial Independence to Preserve Career Choices
You may enjoy practicing law and expect to continue for many years. Financial independence still matters. A client can leave. Firm economics can change. A merger can occur. You may decide to lateral. An in-house attorney may face an acquisition, leadership change, or another opportunity. If your compensation changed materially, how much would need to change in your financial life? Accessible wealth outside the firm or employer can give you more latitude if the right decision is not the highest-paying one.
13. Understand Firm and Employer Rules Before They Affect a Career Decision
Some career-related financial issues may not affect you for years. Partner capital repayment. Deferred-compensation schedules. Firm retirement benefits. Client and origination economics. Equity vesting. The treatment of an Of Counsel role. You do not need to decide today when any of those events will occur. You should understand the rules before they become deadlines. Thinking ahead gives you time to evaluate your options before the financial terms of a future decision are fixed.
Questions Attorneys Often Have in Their Fifties
How do I know whether my high-earning years are creating financial independence?
How should I think about partner capital if I expect to stay at my firm for years?
Why review deferred compensation now?
How much wealth should a law firm partner have outside the firm?
How much can I comfortably give my children or other family members?
What should I understand now if I expect to practice for many more years?
By your fifties, you may have accumulated enough wealth that financial decisions no longer need to be driven primarily by your current income. That makes it worth understanding how much of your financial life still depends on your firm or employer, whether your investments provide enough flexibility outside of those interests, and how taxes, estate planning and family decisions fit with what you have built. For married clients, that also means looking at both spouses’ financial lives together. Beacon Pointe can help identify what deserves attention now, what can wait and what should be understood before a future decision becomes time-sensitive. If you want a second look at whether your accumulated wealth is giving you the flexibility you expected, schedule an introductory conversation with Beacon Pointe.
No matter where you are in your financial journey, thoughtful planning can help you prepare for what lies ahead. Explore our tailored financial tips for those in their thirties, forties, sixties, and seventies to learn more about the key priorities and planning opportunities to consider during each decade.
If you could benefit from a conversation with our advisory team, we would be happy to provide a complimentary consultation.
Important Disclosure: Beacon Pointe Advisors, LLC (“Beacon Pointe”) is an investment adviser registered with the U.S. Securities and Exchange Commission. Registration does not imply a particular level of skill or training. Beacon Pointe does not provide legal or tax advice. This material is provided for general informational and educational purposes only and is not intended as individualized investment, tax, legal, accounting, insurance, healthcare, or employment advice. The considerations discussed may not apply to every individual and depend on personal circumstances, applicable law, and the terms of relevant employment, ownership, compensation, benefit, insurance, and estate-planning documents. You should consult the appropriate legal, tax, insurance, healthcare, and other professional advisers before taking action. Investing involves risk, including the possible loss of principal. Beacon Pointe is not responsible for errors or omissions in materials accessed through links to third-party websites and does not necessarily approve or endorse the information provided in those materials.