Why Saving Exclusively in a 401(k) May Not Be the Best Route for Your Retirement
Monday, 18 March 2024, 09:02
3 Downsides of Saving for Retirement in a 401(k) Alone
You may want to look outside of your employer's retirement plan. If you don't make an effort to save for retirement, you may be forced to live on Social Security alone. And that could lead to a pretty cash-strapped retirement for you.
Now it's always a good idea to snag your 401(k) match in full. After all, that's free money for your retirement.
- Limited investment choices: With a 401(k), your investment choices are usually far more limited than an IRA.
- High fees: 401(k) plans may come with expensive fees that lower your overall retirement savings.
- Early withdrawal penalties: Maintaining all your retirement funds in a 401(k) may result in hefty penalties for early withdrawals.
Consider diversifying your retirement savings to mitigate these risks and enhance your long-term financial security.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.