Written by Almost everything we’ve been told about saving for retirement is just plain wrong.
That old 4% rule everyone loves to quote? It’s not useless, but it comes from a very different economic era. If you follow it blindly today, you could be setting yourself up for disappointment. Or worse, running out of money.
And relying on just a 401(k) or IRA? That’s not a strategy for a wealthy retirement. That’s a strategy for an average one.
The uncomfortable truth is this:
Most traditional financial advice is designed to keep you running in place.
The wealthy aren’t just saving for retirement. They’re building income machines. They use different rules, wiser strategies, and systems that generate cash flow that doesn’t just pay bills, it grows.
Today, I’m pulling back the curtain to show you how they actually do it.
The Real Fear Behind Retirement Planning
The biggest fear most people have heading into retirement is simple:
“What if I run out of money?”
That fear shows up in different ways:
- Can I afford healthcare?
- Will my savings last?
- Can I take this trip?
- Can I remodel the house?
- Can I help my grandkids with college?
- What if the market crashes?
- What if my property loses value?
All of these are really the same fear wearing different clothes.
And because people are afraid of running out of money, they often end up shortchanging their retirement. They don’t travel. They don’t enjoy their money. They don’t live fully.
That’s the real nightmare.
But what if that fear was optional?
What if, instead of watching a pile of savings slowly shrink, you built income streams that keep refilling themselves?
The wealthy don’t fear running out of money because they don’t rely on one finite pile of cash. They build a fortress of income.
That’s my promise to you here.
I’m going to show you three powerful income strategies the wealthy use to lock in their financial future:
- Real estate (done the wealthy way)
- Business ownership
- The stock market, but used very differently than you’ve been told
By the end, you’ll see retirement not as an ending, but as the beginning of your life as a full-time investor.
Who Am I to Say This?
I’m a Certified Financial Planner, a fiduciary investment advisor registered in the state of Florida, and the founder of Obsidian Wisdom. I’ve spent 20 years in the financial industry, including time at three Fortune 50 financial institutions.
What I’m sharing isn’t theory. It’s what I actually do for my clients. Helping them keep more of their money and build multiple income streams so they don’t have to worry about money ever again.
Because let’s be honest: what we really want isn’t more money.
It’s a life where we don’t have to think about money.
Pillar One: The Real Estate Income Machine (Without the Headaches)
When people think about real estate in retirement, they usually picture:
- Paying off their house
- Or buying a rental and becoming a landlord
But dealing with tenants, toilets, and trash is a job. And not one most people want in retirement.
The wealthy know this.
Instead of being hands-on landlords, they focus on tax deferral and passive cash flow. One of their favorite tools is the 1031 exchange, often paired with something called a Delaware Statutory Trust (DST).
Here’s the simple version.
A 1031 exchange lets you sell an investment property and defer capital gains taxes, as long as you reinvest the proceeds into another qualifying property within a specific timeframe.
So if a property has gone up $500,000, instead of writing a massive check to Uncle Sam, you keep that entire amount working for you.
Most people think that means buying another building themselves.
The wealthy often don’t.
Instead, they roll that money into a DST, which is a professionally managed portfolio of large commercial properties. Medical offices, distribution centers, luxury apartments, properties leased to companies you already recognize.
You become a fractional owner. You get income and tax benefits, without management duties.
No tenants calling.
No midnight repairs.
Just checks showing up.
Are there trade-offs? Of course.
- DSTs aren’t as liquid as stocks
- There are fees
- You can’t sell overnight
But the trade-off is hands-off income.
A Simple Example
Meet Sarah. She’s 62 and owned a small apartment complex for 20 years. It’s worth far more now, but she’s done with the maintenance.
She sells it and faces an $800,000 capital gain. Depending on her state and income, her tax bill could exceed $200,000.
Instead, Sarah uses a 1031 exchange. She works with professionals and invests in two DSTs. One holding pharmaceutical warehouses, the other a luxury apartment complex.
Now, instead of fixing leaky faucets, she receives monthly income.
She deferred 100% of her capital gains tax and diversified into institutional-grade assets.
That’s playing the game at a higher level.
Action Steps
- Know your potential capital gains
- Research qualified intermediaries and DST sponsors
- Build a professional team (CFP, CPA, real estate specialists)
Pillar Two: The Business Owner’s Secret Weapon
The single best piece of financial advice most people never hear isn’t a stock tip.
It’s this: own a business. Even a small one.
Why?
Because the tax code loves business owners.
A traditional employee might contribute around $24,500 to a 401(k). That’s solid, but it’s the slow lane.
A business owner can use a Solo 401(k) and contribute as both employee and employer.
For 2026:
- Employee contribution: $24,500
- Employer contribution: up to ~25% of compensation
- Total potential: up to $72,000, or ~$80,000 with catch-ups
And many plans allow Roth contributions, meaning that growth can be tax-free in retirement.
Real-World Impact
Mark is a freelance graphic designer. For years, he used a traditional IRA.
Then he opened a Solo 401(k).
By contributing as both employee and employer, he legally sheltered $65,000 of income in a single year. That money now compounds for his future instead of going to the IRS.
But the real secret?
The business itself.
The top 1% don’t just work in their business, they work on it. Many spend their final 5–10 working years preparing the business for sale.
A successful exit can create a seven- or eight-figure windfall that funds retirement for generations.
Action Steps
- If you have any self-employment income, explore a Solo 401(k)
- Clean up your books (this is foundational)
- Build systems so the business can run without you
People don’t want to buy another job. They want to buy an asset.
Pillar Three: Stock Market Alchemy (Beyond the 4% Rule)
Traditional advice says:
“Build a big portfolio, then withdraw 4% and hope it lasts.”
That rule is a starting point, but it’s blunt in a world that needs precision.
The wealthy don’t sell randomly. They turn portfolios into tax-efficient paychecks.
This comes down to two ideas:
- Smart withdrawal sequencing
- Proactive Roth conversions
The Right Withdrawal Order
Most people have money in three buckets:
- Taxable accounts
- Tax-deferred accounts (401(k), traditional IRA)
- Tax-free accounts (Roth)
The order you pull from them matters.
Often, the best sequence is:
- Taxable accounts first (lower capital gains rates)
- Tax-deferred accounts next, managing brackets and RMDs
- Roth accounts last, letting tax-free growth run as long as possible
Your Roth is your ultimate safety net.
Roth Conversions in the “Tax Valley”
The years after you retire, but before RMDs and Social Security, are your tax valley or bridge years.
Income is often lower. Tax brackets are lower.
This is when the wealthy convert portions of traditional IRAs into Roth IRAs. Paying tax at lower rates now to avoid much higher taxes later.
They’re moving money from a “tax someday” bucket into a “never tax again” bucket.
The Three-Bucket Strategy
This is one of my favorite frameworks:
- Bucket 1 (Safety): 1–3 years of living expenses in cash-like assets
- Bucket 2 (Income): 3–10 years of moderate-risk, income-producing assets
- Bucket 3 (Growth): Long-term growth assets, like stocks, real estate, businesses
This structure gives you flexibility, peace of mind, and the ability to avoid selling in bad markets without giving up growth.
The Big Takeaway
A truly wealthy retirement doesn’t come from pinching pennies.
It comes from building your own personal economy. A system of income that works for you.
We covered three strategies the wealthy use:
- Advanced real estate techniques like 1031 exchanges and DSTs
- Business ownership and retirement supercharging
- Tax-smart stock market strategies using withdrawals and Roth conversions
Your first step doesn’t have to be complicated. It can be as simple as researching one of these strategies or taking inventory of your accounts.
Until next time, stay safe and enjoy life.
Dre Griggs
P.S. – If you want help designing your own Wealthy Retirement System, start by understanding where you stand. Take your Retirement Income Fitness Score and see how resilient your current plan really is.
Start here: obsidianwisdom.com/incomequiz