Why I'm Adopting a New Savings Strategy After Years of Maxing Out My 401(k)

While 401(k)s are great, I need more options.Maxing out a 401(k) can be a truly wonderful thing for your retirement, especially if you're able to do so year after year. Not only does contributing to a 401(k) plan help you save in a tax-advantaged fashion, but maxing out also means putting a lot of money away for retirement each year. For years, I made a point to max out my 401(k) plan contributions while working as a salaried employee. And once I went freelance, I opened a solo 401(k) to continue benefiting from the tax breaks. Image source: Getty Images. But in recent years, I've changed my retirement savings strategy. And you may want to do the same. Why branching out beyond a 401(k) is important If you work for a company that offers a 401(k) match, I'd encourage you to contribute enough to that plan each year to claim that free money in full. But maxing out your 401(k) to the exclusion of other retirement plans may not be your best move. One big drawback of 401(k)s is that they generally do not let you hold stocks individually. Rather, you're typically limited to a bunch of different funds, some of which can come with high fees known as expense ratios. I want the option to be able to choose stocks individually for my retirement portfolio. So, for that reason, I've branched out into a taxable brokerage account and hope to continue doing so. This doesn't mean that I've ditched my solo 401(k). But I am making a point to fund both accounts. A wider range of investment choices isn't the only reason I'm looking beyond a 401(k), though. I also want the option to access my savings whenever I want. I'm not planning to retire early. In fact, I don't even want to retire at all. But I also know that life doesn't always go according to plan. If I end up in a situation in my mid-50s where I can't find work in my preferred field and I can afford to retire based on my savings balance, I don't want to feel forced to get some lousy job because my retirement funds are off limits for a few more years unless I want to get hit with an early withdrawal penalty. Remember, with a 401(k), tapping your account before age 59 and 1/2 can cost you 10% of your withdrawals. So, it's important to have access to savings that aren't restricted. Choose your retirement accounts strategically I'm not saying maxing out a 401(k) is a bad thing. But before you do, make sure your 401(k) offers investments you're happy with. If it doesn't, it could pay to split your savings between a 401(k), individual retirement account (IRA), and taxable brokerage account. Even if you're perfectly fine with the investment choices you have in your 401(k), it's still important not to tie all of your nest egg up in a restricted account. So, at the very least, you may want to invest a modest amount each year in a taxable account so you have more options down the line.Read NextFeb 22, 2026 •By Maurie BackmanCounting on Home Equity to Fund Your Retirement? Here's Why You Shouldn't.Feb 22, 2026 •By Stefon WaltersAre You Really Ready to Start Collecting Social Security? 3 Signs It Might Be the Perfect TimeFeb 22, 2026 •By Dana GeorgeWhy Cleveland's Culture Scene Makes It a Retirement Pick That Doesn't Feel "Sleepy"Feb 22, 2026 •By Maurie Backman3 Little-Known Social Security Rules All Married Retirees Should KnowFeb 22, 2026 •By Dana GeorgeThe Medicare Service That Nearly Disappeared But Came BackFeb 22, 2026 •By Keith SpeightsPresident Trump's Social Security Changes So Far: 4 Things You Should KnowAbout the AuthorMaurie Backman is a contributing Motley Fool retirement and Social Security expert with more than a decade of experience writing about personal finance, investing, and retirement planning. Maurie previously worked in finance analyzing distressed companies. She studied finance at Binghamton University.TMFBookNerd