401(k) or IRA? Understanding the Importance of Diversification in Retirement Saving
Wednesday, 11 September 2024, 02:11
Why 401(k) or IRA Alone Is Risky
While both 401(k) and IRA plans offer tax advantages, depending solely on them can leave you vulnerable to high taxes during retirement.
Explore Different Account Types
- Health Savings Account (HSA): Offers tax-free withdrawals for medical expenses.
- Brokerage Accounts: Provide investment flexibility and liquidity.
- Roth IRA: Allows tax-free growth and withdrawals in retirement.
Consequences of Limited Accounts
Choosing only 401(k) or IRA may lead to significant tax liabilities later, limiting your financial security.
Implementing a Diverse Strategy
To enhance your retirement portfolio, consider diversifying your account types. This strategy can also help manage risks and improve overall returns.
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.