Saving Too Much in Your 401(k)?
Feb 09Save too much? Everything I read says we are not saving anywhere near enough to handle our years beyond working. However this article makes some great points for those that have been putting everything they can into their 401(k) and IRA accounts. These accounts come with Required Minimum Distributions (RMD’s). Postponing withdrawal from these accounts can only last until you reach 70.5 and then you have to start withdrawals. It becomes part of your taxable income.
…one of the biggest mistakes I see investors make is overfunding their tax-deferred retirement accounts
Please consider these comments when considering how you save for retirement.
…you should only be funding your 401(k) up to your company match…put the remainder of your savings into a regular investment account, so you can take advantage of long-term capital gain.
Saving is the first big challenge and then thinking through the tax impact of taking those funds out sometime in the future needs to be considered as well.
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