Maximum 401(k) contributions for next year were frozen at 2013 levels by the IRS, but advisors say that might not be such bad news for those saving for retirement.
“By building so much 401(k) money you are making a deal with the devil,” said Jim Heafner, president of Heafner Financial Solutions in Charlotte, N.C.
That leaves some clients with seven or more accounts that can offer a snapshot of exactly where they stand in relation to the goal they have set in each area.
Lewis prefers a modern version of the multiple accounts strategy by using software to analyze the assets of clients. Either way, the effect is the same.
That “deal with the devil” Heafner mentioned is a key element that all three advisors mentioned when plotting strategy for retirement savings.
“I think the tax environment is going to get tougher,” Lewis said. “If everything is in nontaxable [accounts], you can get bitten down the road.”