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Required Minimum Distributions
Even saving for retirement can become a tax nightmare.
This regulation can be particularly aggravating if you want to grow your retirement savings tax-free for longer.
it’s possible for you to also considertaxable investment accountsfor additional savings without the constraints of RMDs.
Lack of Tax Diversification
A 401(K) account can be a slippery slope for procrastinators.
Alternatively, Consider contributing to a Roth IRA in addition to your 401(k).
Contributions to a Roth IRA are made with after-tax dollars, but qualified withdrawals are tax-free.
Over time, these fees can significantly erode your investment returns.
Alternatively, you might compare the fees associated with your 401(k) plan to other investment vehicles.
Low-cost index funds, ETFs and IRAs often have lower fees, potentially improving your net returns over time.
In contrast, Roth IRAs allow for penalty-free withdrawals on contributions at any time, giving you more liquidity.
Typical 401(k) accounts are often fully exposed to market risks, Burbank said.
By diversifying into annuities, you could secure astable income streamthat isnt directly tied to market fluctuations.
Annuities can guarantee income for life, providing peace of mind that you wont outlive your assets.
Annuities play a unique role in the retirement income planning process, Kates said.
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