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Retirement “Buckets” of Funds

By: blakewillhkaglobal

When people think of saving for retirement, many stop at the 401(k) or 403(b) at their employer or with their SEP contributions as a self employed person.  There are many other avenues for saving for retirement that deserve our attention as well.  We highlight a few of the different buckets below, but there could be other options for your personal situation.  We would love to discuss your plan with you and see if we can help you achieve your goals.

  • 401(k) Plan – Many employers offer this in a traditional (pre-tax) or Roth option.  We have a previous blog going over our thought process on choosing which option.  One big key here is the employer match.  On the first 3 to 5% of contributions for many plans, you get a 50% or 100% employer match.  Not many other investments double your money immediately!
  • Individual Retirement Account (IRA) – Traditional (pre-tax) or Roth – This allows for more savings in addition to the employer sponsored plan.  We also have a blog dedicated to the benefits of the Roth IRA as well.  We love the Roth IRA due to the flexibility in withdrawing contributions quickly if needed as well. 
  • Life Insurance Retirement Plan (LIRP)  – Provide similar benefits to the Roth IRA in that the income streams in retirement are tax free.  There are also no income or funding limits on LIRPs like there are in IRAs and 401(k)s.
  • Stocks and Mutual Funds – While the 401(k) and IRA each have contribution limits, there is no limit to how much of your income you can save.  Many people have the problem of making more money and then spending more money.  When you are “maxing out” your retirement accounts, this is an easy trap to fall into.  Looking at your assets outside of traditional retirement accounts as retirement assets you should be growing is key.  

As you set your plan in place and determine which options and buckets are right for you, we would love to be a part of that conversation to help you achieve those goals!

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