What to do with Retirement Savings

Retirement is quite likely something that you’ve been planning for your entire working life or at least a good chunk of it (hopefully).

The thing is, however, that once you have a good chunk of retirement money stashed away, what do you do with it?

Do you leave it in savings to accumulate interest, or do you move it somewhere else? Either choice has its benefits, but there are definitely some smart(er) options to choose from when it comes to making the most of your retirement funds.

Roth Relations

When it comes time to retire, you may want to consider maxing out your Roth options.

When you have a Roth plan, such as a Roth 401(k), your after-tax contributions are often left free to increase tax-deferred. Furthermore, with most plans, your withdrawals, up until about the age of 60, are also tax-free as long as you follow some basic regulations.

In most scenarios, all of this is available without income limitations holding you back. Once you retire, you can even roll your Roth 401(k) into a Roth IRA plan with even more benefits. 

This choice is pretty smart. If you have or can contribute your maximum amount to a Roth 401(k), you are then free to open a Roth IRA and experience even more benefits, so that’s definitely something to consider in or shortly before your retirement years.\

Taxable Accounts

You might also consider putting your retirement savings into a taxable brokerage account.

Even if the money is taxed, you’ll still be saving. Plus, in the long run, this option is better, safer, and more predictable than a tax-deferred type of deal.

At least, if you choose this option, you’ll have everything paid off upfront and won’t have to worry about high interest rates or larger-than-expected costs, which could throw off your entire budgeting plan, later on down the line.

A Healthy Mix

The best option, of course, is always to have a healthy, careful mix of tax-free, tax-deductible, and taxable savings accounts working for you in a diverse portfolio.

Thus, you should do everything you can to accomplish this varied option, but, when that’s not possible, considering your choices and picking the best one (the one that’s gong to make the most money for you) is always smart.