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But for 67-year-old retiree Therese R., that widely accepted wisdom doesnt exactly check out.
She regrets sinking so much into her 401(k).
Heres why one retireeregrets investing in her 401(k).
But I do wish I hadnt put quite so many eggs into that basket.
When youre retired, even slightly higher tax rates can add up to thousands of dollars lost each year.
Therese estimated she currently loses around 25% of each 401(k) distribution tofederal and state taxes.
Thats a major chunk out of the income she was counting on from decades of contributing to those accounts.
Mandatory Withdrawals on Uncle Sams Schedule
Another drawback Therese has found?
The lack of flexibility around when she can access her funds once she hit age 72.
It would have been nice to leave more funds untouched for a while to keep compounding.
Not doing so results in steep penalties.
With more diversification across brokerage accounts, Id have greater liquidity.
Im not saying 401(k) investing is wrong by any means, she stated.
But I do wish Id invested more inregular brokerage accountsand rental property as hedges.
But looking back, she would have invested less aggressively and put more intoalternative income sourcesto complement them.
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