Supplementing a 401k Plan for Early Retirement ?

Answer 1

It is common for hard-working individuals to fully fund their 401k plan retirement account. They may contribute to this fund regularly for years with an amount that allows them to qualify for an employer-matching benefit. Contributing enough money into the account to take advantage of an employer-matching benefit can help your money to grow more quickly over time. Some individuals are even contributing additional money into this account beyond what is necessary to qualify for the employer-matching benefit. However, there may be reasons why you should consider supplementing your 401k plan with other retirement plans.

When Are You Retiring?

Many people plan to work right up until the day they can start withdrawing money from their 401k retirement account without penalty. However, others would love to retire years before this and really enjoy life to the fullest while they are still young and healthy enough to do so. Consider that withdrawing money out of your 401k retirement account early can result in penalty fees. This means that if you retire before the age of 59 _, you will want to develop a retirement plan that will provide you with sufficient income to do so without withdrawing funds from your 401k account. This typically involves contributing funds to another type of account, but it may also include purchasing other assets like income-producing real estate, annuities and more.

Developing Your Plan

The key to retiring on your own terms successfully is to develop a plan and to make steady progress with that plan. First, consider when you want to retire and how much money you will need to retire comfortably. Then consider how much money you will need access to before you reach the age of 59 _ as well as how much you will need access to after the age of 59 _. Both parts of your retirement plan should be fully funded before you retire. Keep in mind, however, that your 401k balance may continue to grow over time even when not contributing actively to it. Developing a great plan of action for your retirement may involve contributing to your 401k account as well as purchasing other investments that can supplement your plan for early retirement.