By Matt Roop, CFP®
Engineers are some of the sharpest problem-solvers I know. You think in systems, analyze complex data, and troubleshoot like it’s second nature. But when it comes to personal finances? That same precision doesn’t always carry over.
I’ve worked with many engineers who are highly skilled in their fields but struggle with financial blind spots that can cost them in the long run. Maybe it’s overconfidence in trying to time the market, neglecting tax-efficient strategies, or simply not having a plan for their company stock options. Whatever the case, these mistakes aren’t about intelligence—they’re about focus. And I get it. When you’re immersed in high-level projects and career growth, financial planning can take a backseat.
But here’s the thing: avoiding these common pitfalls doesn’t require a PhD in finance. It’s about being aware of where engineers tend to go wrong and making small but strategic adjustments. Let’s walk through the biggest financial mistakes I see engineers make—and how you can avoid them.
Neglecting to Optimize Tax-Efficient Strategies
Tax efficiency plays a key role in building long-term wealth, yet many engineers overlook strategies that could help them keep more of what they earn. With the right approach, it’s possible to manage tax burdens and free up more funds for saving or investing.
Some of the most effective tax strategies include:
- Roth IRA conversion: Moving money from a traditional IRA or other retirement account
- Tax-loss harvesting: Offsetting capital gains by selling underperforming assets
- Health savings account: Making deductible contributions that earn and distribute tax-free
- Maximizing 401(k) Contributions: Contributing the full allowable amount to a 401(k) (including catch-up contributions if over 50) lowers taxable income while building retirement savings.
- Backdoor Roth IRA: For high earners who exceed the income limits for direct Roth IRA contributions, a backdoor Roth conversion can provide a tax-efficient way to save for retirement.
- Mega Backdoor Roth Contributions: Some employer-sponsored 401(k) plans like Eli Lilly’s allow after-tax contributions that can be converted into a Roth IRA, creating additional tax-free growth opportunities.
- 529 Plan Contributions: While primarily used for education savings, some states offer tax deductions or credits for contributions, making it a smart way to save for a child’s or grandchild’s future.
Working with a financial professional can help you take advantage of these and other tax-efficient strategies to reduce how much you pay in taxes.
Trying to Time the Market
Do you believe your analytical thinking can aid in predicting where the stock market is heading? You might occasionally make the right call, but the odds are against you. Besides holding on to an investment too long or making risky trades, you can waste a lot of time watching the market, and you may spend more money because of additional trades and tax implications, reducing your returns.
Trying to time the market is among the financial mistakes engineers can easily avoid by deploying a buy-and-hold strategy that focuses on time in the market. Buying assets to hold for the long term—even as their value rises and falls—has typically shown higher returns for investors.
Failing to Plan Restricted Stock Units or Stock Options
Many engineers receive part of their compensation in the form of restricted stock units (RSUs) or stock options—a valuable benefit that can enhance long-term wealth. But without a clear strategy, these assets can create unexpected tax burdens, missed vesting opportunities, or an overconcentration in company stock.
Some common pitfalls include:
- Overlooking tax implications: RSUs are taxed as ordinary income upon vesting, while stock options may trigger taxes at exercise or sale. Without a tax strategy, the impact can be significant.
- Missing key deadlines: Stock options often have vesting schedules and expiration dates. Failing to track these can mean forfeiting valuable shares.
- Holding too much company stock: While investing in your employer’s success can be rewarding, too much exposure to a single stock increases risk. A diversification plan helps balance your portfolio.
Navigating RSUs and stock options requires planning—especially when coordinating sales, tax strategies, and overall investment allocation. A financial professional can help optimize these assets within your broader financial picture.
Handling Finances on Their Own
While the do-it-yourself (DIY) approach has continued to gain popularity in the home improvement market, you might reconsider trying to build a solid financial future by yourself. Excelling in the engineering field doesn’t mean you’ll excel at handling the often complex finances of an engineer.
Just as others rely on you to resolve complex issues, you can rely on financial professionals to help you keep up with economic shifts, think through income variability, plan for job changes, and target saving and investing for your future.
Allowing a wealth manager to handle your finances lets you remain focused on the demands of your career.
Get Help to Avoid Making Financial Mistakes
Small financial missteps can have an outsized impact, especially for high-earning professionals like engineers. Overlooking tax strategies, holding too much company stock, or waiting too long to plan can all create unnecessary challenges.
Financial success isn’t about reacting to every market shift or handling everything on your own—it’s about having a structured approach that fits your goals, career, and lifestyle. A well-thought-out plan can provide clarity and direction, helping you make informed decisions with confidence.
At Deerfield Financial Advisors, we help engineers and other professionals navigate these complexities. If you’d like to discuss your financial strategy, call (317) 644-7701 or email mroop@deerfieldfa.com.
About Matt
Matt Roop is Wealth Manager and Shareholder at Deerfield Financial Advisors, a fee-only financial advisory and wealth management firm with offices in Indianapolis and Chicago. In his role, Matt serves as a personal “chief financial officer” for his clients, overseeing every facet of their financial landscapes, orchestrating strategies to grow their wealth, and enhancing their financial clarity. Catering to the specific needs of his clients, whether lawyers, engineers, or business owners, he empowers them to embrace their passions and lead their optimal lives. Matt conveys a depth of experience and a calm demeanor that clients find reassuring, and he loves providing peace and confidence around their financial future.
Matt received a Bachelor of Science from Indiana University and a Master of Business Administration (MBA) from George Washington University. He is a NAPFA Registered Financial Advisor and holds the CERTIFIED FINANCIAL PLANNER® and Certified Exit Planning Advisor (CEPA) designations. Committed to staying at the forefront of his field, he is actively involved with the Exit Planning Institute, National Association of Personal Financial Advisors, and the Estate Planning Council of Indianapolis. Since 1997, Matt has been involved in the investment and wealth management realm, with experience at Charles Schwab & Co., Inc., as well as a boutique Indianapolis-based independent advisory firm and a brief stint supporting his family’s closely held business.
Outside the professional realm, Matt serves his Indianapolis community by volunteering for Meals on Wheels of Hamilton County and is on the Executive Leadership Team for the Indiana Alzheimer’s Association’s Walk to End Alzheimer’s. He is dedicated to financial stewardship and continuous growth, with an unyielding commitment to enhancing the lives of both his clients and his community. Matt and his wife, Kimberly, reside in Carmel, IN, with their four children, who are all pursuing their college dreams. When he’s not working, he enjoys traveling, reading, and spending time at his lake house in southern Indiana with family. To learn more about Matt, connect with him on LinkedIn.
