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Ask the Expert – CFP Chad Burton talks “Options Beyond My 401k”

When it comes to planning for retirement, many individuals rely heavily on their employer-sponsored 401k plans. While 401ks can be an excellent tool for saving and investing for retirement, it is important to consider other options as well. To shed some light on this topic, we turn to Certified Financial Planner Chad Burton, who offers valuable insights into alternative retirement savings strategies.

Chad Burton, the founder of NewFocus Financial Group and a seasoned financial advisor, emphasizes the significance of diversifying retirement savings outside of a 401k plan. According to Burton, many people limit their retirement savings potential by solely relying on their employer’s retirement plan.

One alternative worth exploring is a Roth IRA. This individual retirement account allows after-tax contributions, resulting in tax-free withdrawals in retirement. A Roth IRA offers numerous benefits such as flexibility in investment options, no required minimum distributions (RMDs), and the ability to withdraw contributions penalty-free, making it an appealing option for individuals looking to maximize their retirement savings.

Burton also suggests considering a Health Savings Account (HSA) as a retirement savings tool. HSAs are only available to individuals with high-deductible health insurance plans, but they allow individuals to set aside pre-tax money for medical expenses both in the present and future. If managed wisely, an HSA can become an excellent vehicle for retirement savings, as any unused funds can be invested for potential growth and withdrawn tax-free for qualified medical expenses during retirement.

Another avenue to explore, according to Burton, is establishing a brokerage account outside of a retirement plan. While this type of account does not provide any tax advantages, investing in a brokerage account allows for greater flexibility in terms of investment options and access to funds before the age of 59 ½. Additionally, there are no contribution limits or required distributions, giving individuals more control over their investment decisions.

Aside from these alternatives, Burton also highlights the importance of staying on top of one’s financial plan throughout their career. Regularly review and rebalance investment portfolios, reassess risk tolerance as life circumstances change, and consult with a qualified financial advisor to ensure a well-rounded retirement strategy.

While 401k plans serve as a solid foundation for retirement savings, it is important not to limit oneself to this singular option. By diversifying one’s retirement savings through Roth IRAs, HSAs, brokerage accounts, and staying actively engaged in financial planning, individuals can significantly enhance their chances of achieving a financially secure and comfortable retirement.

Chad Burton’s insights remind us that a comprehensive retirement strategy should encompass a wide range of options. By exploring these alternatives, individuals can take control of their financial future and enjoy the retirement they have always dreamed of.