Is It Time for Investors to Ditch Their 401(k)s for Retirement?
The workplace-sponsored 401(k) is touted as one of the best places to save for retirement. And there's good reason for that. Contributions are pulled in from your paycheck and invested automatically. Withdrawal restrictions discourage you from reaching into those funds even as the balance grows to six figures or more. And tax deferrals eliminate the annual tax bite that can slow your investment growth.
Still, even with those perks, you may benefit from dropping your 401(k) in favor of a taxable brokerage account.
Two outcomes of the coronavirus-prompted economic downturn of 2020 threaten to lessen the appeal of 401(k) investing. One is an increase in companies that are suspending or eliminating employer-matching contributions. And the other is massive stimulus spending by the federal government that could lead to higher income tax rates in the future.
Source Fool.com
