The Biggest Downsides of Having Millions in Your 401(k)

Having a large portion of your retirement wealth in a tax-deferred 401(k) can create a significant tax burden upon withdrawal, potentially pushing you into higher tax brackets.

When you take distributions from your 401(k), every dollar is taxed as ordinary income, impacting how much you can actually spend during retirement.

The IRS requires you to take Required Minimum Distributions (RMDs) at age 73, whether you need the funds or not, complicating financial planning in retirement.

Excess wealth in tax-deferred accounts might seem beneficial but can lead to higher tax liabilities and less disposable income in your retirement years.

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