"Their primary investments in that account now are ETFs and mutual funds. And they're wondering if they should make changes. The answer? Maybe - but not necessarily for the reason they think."
"There's a reason workers are commonly advised to save for retirement in an IRA or 401(k) plan. These accounts offer a world of tax benefits, like tax-free contributions and tax-deferred investment gains."
When planning to retire early at 55 without incurring early withdrawal penalties from IRAs or 401(k)s, it's essential to have a suitable investment mix in a taxable brokerage account. While capital gains taxes can pose a challenge, they are manageable. Investments in tax-advantaged accounts are beneficial, but they come with drawbacks, such as penalties for early withdrawals. Careful planning and possibly seeking the counsel of a financial advisor can help optimize retirement strategies for tax efficiency and financial security.
Read at 24/7 Wall St.
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