401(k) is one of the most preferred retirement plans in the country. Does that mean it is also the safest one? You can decide that for yourself after reading the next few lines.
401(k) plans were never designed with employees’ best interests in mind, but only to provide retirees with supplementary income. So don’t be surprised if you hear your employer tell you that they were not meant to carry your weight for you in your future. Also, it is quite a difficult job to determine just how much cash you will end up needing after retirement, and the last thing companies have on their agenda is to spend valuable time and resources in figuring it out for you.
Also you might be wondering what happens to a 401(k) plan if the business goes bankrupt. The answer is that the plan will end but you will have the chance to keep the money by rolling it over to another retirement account. You will have to let go of employer contributions but you get to keep all of your own contribution. Granted a 401(k) can be an effective retirement plan, the risks that many people don’t know about can land them in a deep hole.
These are just a few of the risks you take when you opt for a 401(k). You are better off with a self-directed IRA with complete freedom of where you want to invest. And what more would you want with a tax-deferred account? Most people with 401(k)s have no choice but to stick to the traditional forms of investment in stocks, bonds and mutual funds. With a self-directed IRA account, you not only have the choice to invest almost wherever you want including real estate, gold bullion and small businesses, but you also have checkbook control of your account, which proves valuable for conducting on-the-spot and time-sensitive transactions.
To learn more about, Does a Self-directed IRA have Extra Advantages over the Traditional IRA? Click Here
How much risk are you taking with your current retirement plan?
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