Why this matters for skilled trades
The trades are one of the best career paths in America for total lifetime income and one of the worst at explaining the money side of it. Nobody walks you through investing during your apprenticeship hours and nobody in the journeyman class talks about a Roth IRA. So a 22-year-old electrician apprentice and a 42-year-old master electrician often have a similar retirement balance — both of them haven't started yet.
The numbers, though: experienced journeyman electricians, plumbers, HVAC techs, pipefitters, and steamfitters regularly clear $75-100k, with masters and service techs on call well above that. Owner-operators of small shops can top $150-200k. These are real incomes. They deserve a real plan.
What your paycheck looks like at each stage
Apprentice (years 1-4 or 1-5): Starting wages in most trades are 40-60% of journeyman scale. That's roughly $20-30/hour in most markets. You're doing the hard physical work, going to class at night, and your take-home is modest. The upside: in a union apprenticeship, your pension contributions start on day one, and the match on a Roth IRA at this income level (low tax bracket) is extraordinary leverage.
Journeyman: Full scale. Union journeyman electrician in a major metro can be $45-60/hour plus fringes. Non-union journeyman is typically 70-85% of that. This is when serious wealth-building becomes possible. Overtime and prevailing-wage jobs (public works projects) can push a good year well past $120k.
Master or specialist (HVAC service tech, industrial electrician, gas fitter, etc.): $100-150k+ is common. Tool allowances, vehicle allowances, on-call stipends — these are all taxable income. Plan accordingly.
Owner: You gross a lot more but you carry truck payments, insurance, material costs, workers' comp, and self-employment tax (15.3% on top of income tax for the first $176,100 of net earnings). Your take-home percentage is lower than it feels.
Where to start at each stage
Apprentice: open a Roth IRA and put in $50-150/month. Because your tax bracket is low right now, paying tax on the contribution is basically free — the growth over 40 years is tax-free. Apprenticeship is the best time in your life to use a Roth IRA and most apprentices miss it.
Journeyman: if union, your pension is already working. Add a Roth IRA and max it every year ($7,500/year) if you can. If non-union with a 401(k), get the full match, then fund the Roth, then come back and top off the 401(k) if you have more.
Master/specialist: at this income level, a traditional (pre-tax) 401(k) contribution starts saving you more on taxes than a Roth. Consider splitting — some pre-tax to lower your current tax bill, some Roth for tax-free retirement income.
Owner: SEP-IRA or Solo 401(k). A Solo 401(k) for an owner with no W-2 employees lets you contribute as both "employee" and "employer" — often $50-72k/year in tax-advantaged space. This is where the real money hides. Get an accountant.
Accounts that fit the job
Union pension and annuity: If you're in the IBEW, UA, SMART, or the Operators, your pension is accruing in the background and your annuity or supplemental 401(k) is taking a chunk of your package. Don't touch it. Don't cash it out. Vest.
Non-union 401(k): Many electrical, HVAC, and plumbing shops now offer a 401(k) with a small match (3-4%). Always take it.
Roth IRA: The single most underused account in the trades. Open one tonight on your phone.
SEP-IRA: If you do any side work 1099 — moonlight residential service calls, for example — you can open a SEP-IRA and shelter up to 20% of that net income from tax. Most tradespeople don't know this.
Solo 401(k): Once you're a full-time owner with no W-2 employees, this beats the SEP because it allows a Roth option and bigger contributions at lower incomes.
HSA: If you're on a high-deductible health plan, it's the most tax-efficient account available. Use it.
Mistakes tradespeople tend to make
Waiting until you "make it" to start investing. A journeyman at 28 who starts putting $300/month into a Roth IRA and stops at 38 will have more money at 65 than a master at 38 who starts putting in $500/month and doesn't stop until 65. Early, small beats late, big. It's not close.
Buying too much truck. A $900/month truck payment is a $900/month Roth IRA contribution you will never make. You do not need a new 3/4-ton to haul a ladder and a tool bag.
Mixing business and personal accounts as an owner. This destroys your bookkeeping and your tax deductions. Separate checking, separate credit card, separate everything.
Cashing out the union annuity when changing locals. Roll it. Do not cash it.
Ignoring disability insurance. You sell your body to do this job. If you lose the ability to work with your hands, the income stops. Disability insurance is boring but it's the most important one-page decision in the trades.
A realistic starter plan for the next 12 months
Month 1: Open a Roth IRA on your phone. $100/month if apprentice, $300-500/month if journeyman or higher. Pick one broad-market index fund and set it to buy automatically.
Month 2-3: If non-union, confirm your employer 401(k) is set to at least the full match. If union, pull your annuity statement — know what's in there.
Month 4-6: If you do any side 1099 work, open a SEP-IRA. If you're a full owner, talk to an accountant about a Solo 401(k).
Month 7: Price out disability insurance. Not life insurance — disability. A lot of people skip this and regret it later.
Month 8-12: Leave the Roth alone. Increase the automatic contribution by $25/month at your next raise. The point is boring consistency, not excitement.
Next steps on TPT
Every term used above — Roth IRA, index fund, expense ratio, SEP-IRA, Solo 401(k), diversification — has a plain-English definition in the TPT glossary. The free learning path covers the underlying mechanics of investing so the account choices above make sense instead of feeling like alphabet soup.