My 401(k) Dwarfs My Brokerage Account - With 7 Years Until Retirement, How Should I Invest Now?

"Entrepreneurs and small businesses are the crucial component of a thriving, capitalism-based market economy. Small businesses account for 43.5% of US GDP, 55% of new job creation in the past decade, and of total US businesses. Due to how tax laws were originally written to help foster entrepreneurism, there are other options that small business owners have available to them that salaried workers for larger companies cannot access, especially when it comes to handling retirement funds."

"Both his and his wife's 401-K accounts were huge, relative to their non retirement brokerage accounts. In the next 5-7 years, he anticipated that the 401-Ks would cumulatively hold over $5 million. By the end of that same time period, he expects that their non-retirement brokerage accounts will hold $3-4 million. The poster and his wife own their own business, and plan to sell it for between $5-10 million 5-7 years into the future, however, it is not a sure thing."

"While it is not explicit, the nature of the poster's query implies that he is looking at the 401-K account from the perspective of an employee, and not from the broader one of a small business owner. As a result, some of the responses that he can choose to incorporate for his and his wife's use should be looked at in a larger equation to evaluate how helpful they might be."

Entrepreneurs and small businesses generate roughly 43.5% of US GDP and 55% of new jobs over the past decade. Tax laws create retirement and tax options available specifically to small business owners that salaried employees often cannot access. One household anticipates over $5 million in combined 401(k) balances and $3–4 million in taxable brokerage accounts within 5–7 years, and plans to sell a business potentially worth $5–10 million while aiming to retire near age 50. The imbalance between large pre-tax retirement balances and smaller after-tax holdings raises tax-timing and liquidity concerns. Small business owners can address those concerns via employer deductions, alternative plan designs, and integrated sale and retirement planning.

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