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Article at a Glance:
401(k)contributions has provided the bulk of retirement savings for almost 25 years for career professionals. However, there are limits to its usefulness, and hence your contributions to it should be suitably tempered. This article talks about a balanced way to use 401(k) contributions in the context of your overall financial freedom plan.
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Understand the basics of the 401(k) Plan - how much can your contributions be, how you save on taxes, and the best conventional use of the plan.
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Learn the limitations of saving entirely through this plan. 401(k) plans are not your road to early financial freedom. But even if you are planning to retire only after 60, putting all your contributions in the 401(k) basket is not the best idea.
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You can maximize your benefits from this plan and mesh it with savings in other vehicles such as Roth IRA and Taxable investments to ring in financial freedom at 60 at least. Sure you can do better and retire early without any 401(k) contributions at all, but since this is the most popular retirement vehicle, learn how to use it and fit it in your overall early financial freedom plan.
401k plans have been great vehicles for retirement savings - however they suffer from serious limitations which must be overcome by a more balanced approach to retirement saving. Find out the details in this article.
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