High Earners Rework 401(k) Strategy as Maxing Out Plans Loses Appeal
Updated
Updated · Bloomberg · Oct 6
High Earners Rework 401(k) Strategy as Maxing Out Plans Loses Appeal
2 articles · Updated · Bloomberg · Oct 6
Summary
High earners are moving away from the long-standing habit of automatically maxing out 401(k) contributions, reassessing whether that default still best serves their wealth-building goals.
The shift reflects doubts that a set-it-and-forget-it approach is optimal, even though the strategy has long been favored for tax breaks, automatic investing and compounding.
For affluent savers, the debate is less about abandoning retirement saving than about whether locking more money into a 401(k) now may limit better uses elsewhere.
The rethink marks a break from one of personal finance's most entrenched rules, suggesting traditional 401(k) advice is being applied more selectively by top earners.