401(k)s, 403(b)s, IRAs, and HSAs are powerful tools to get you to your goal of retiring. What isn’t as well known is that these accounts are protected from personal bankruptcies and lawsuits.
We likely won’t declare bankruptcy. Also, it’s unlikely someone will sue us.
And that tendency has merit; very few people ever file bankruptcy or are involved in a lawsuit
The Unexpected
But life throws curve balls our way.
Events we never anticipated or that are in our control occur.
Certain financial behaviors correlate to bankruptcies.
But bankruptcies also occur for those who simply find themselves in an extreme event.
Yet, there is a difference between anticipating an event and preparing for it financially.
The salient reason for retirement accounts continues to be their compelling income tax attributes.
Knowing they are protected from these events provides yet another reason to place these accounts at a very high, if not the highest, priority for your money.
Protect and Reward
You reward your future self by forming good habits around contributing to your retirement. You buy, quite literally, peace of mind whose value cannot be overstated.
Limiting your exposure to these and other risks such as a health crisis or a divorce is paramount to staying on the path to meeting your financial goals.
This is the essence of a good financial plan: Aligning assets to financial goals and to mitigating risk.
This is an example in how working with a fee only financial planner helps get you to financial freedom.
Next Step
Ready to take the next step and work with a fee-only CFP? Reach out to schedule a Discovery Meeting to learn more