Often in retirement planning, much of the focus is on asset accumulation. No doubt it’s important to save and grow your money so you’ll have a sizable nest egg when you retire. However, it’s also important to minimize expenses in retirement. The higher your spending is, the harder it may be to make your savings last throughout your retirement years.
If you’re like many Americans, your 401(k) plan may be your largest retirement asset. A 401(k) plan is a tax-advantaged tool designed to encourage long-term savings. As long as the funds stay in the account, the growth isn’t taxed. This allows your funds to compound more quickly and can help you accumulate a substantial balance in a shorter amount of time.