According to a recent study by the Federal Reserve, about 7 in 10 adults claim to be comfortable with the amount of funds they have sitting in the bank.
Then again, it depends what their definition of financial stability consists of…
Interesting enough, 40% of these same people would either have to borrow cash or sell something to cover a $400 unexpected expense.
Not so good on money after all, huh?
If you’re a part of this 40% and looking for a better way to protect yourself from these costly emergencies, then you’re in luck!
This special 401(k) upgrade I’m about to tell you about could very well be your ticket to planning for the worst without having to dip into your hard-earned retirement savings.
You may be wondering what all this has to do with reaching your retirement goals.
It’s simple. Without setting aside finances for non-retirement purposes, you’ll eventually be forced to pull money from savings you’ve intended for the future.
This is counterproductive and does nothing more than set you back from your long-awaited retirement date.
That’s why an emergency savings account is always a good thing to have at your disposal.
The thing is, it’s not always easy to commit to one of these accounts or maintain it for that matter. Between added fees and minimum deposit requirements, it’s not necessarily a set it and forget it way to save money.
Here’s where your 401(k) comes in…
Sure, you can always pull funds straight from this employee-based retirement account, but that comes along with income tax and an additional 10% penalty if you’re under the age of 59.5 years old.
If you’re looking to dodge these costs, but aren’t interested in going to the bank to get the ball rolling on a new account, then you’ll want to set up a “traditional aftertax” savings option through your current 401(k).
Doing so simply allows you to pump cash into an account outside of your 401(k) on an after-tax basis.
The best part is it requires little to no work on your part!
Rather than distributing the cashflow after the fact, the money is transferred directly from your paycheck. So everything happens in the background!
It may not seem like that big of a hassle, but studies show that people are 15x more likely to save if they can do it via payroll deductions.
Unlike a typical 401(k) retirement account, you don’t need a reason to access your money and any interest, dividend, or gains you earn accumulate tax deferred.
In other words, it’s a practical way-to-save in the event of an unexpected financial emergency.
Check to see if your employer offers a “traditional aftertax” option in conjunction with your 401(k).
Sometimes mandatory expenses come out of the blue, but opening one of these savings accounts could give you your peace of mind and prevent you from having to postpone retirement.
This is just one of the many ways you can streamline your retirement. If you’re interested in receiving in-depth advice on how to reach the retirement you deserve, then I encourage you to attend the upcoming Annual Wealth Summit.
Come escape the cold and soak up the Orlando, Florida sun just a few short weeks away from now.
While you’re here, we’ll reveal retirement loopholes that often fly under the radar as well as other moneymaking and self-improvement tactics.
To say the least, it’s a one-of-a-kind experience you don’t want to miss out on.
Click here to find out more and reserve your seat today!
