Rethinking the 401(k). Is It Enough?

The 401(k) has long been the cornerstone of retirement savings in America. It’s the plan many employers offer, and the one most workers contribute to automatically. But if you’re planning to live a vibrant 100-year life, it’s time to pause and ask: Is the traditional 401(k) really enough?

A longer life expectancy means more retirement years to fund. According to the Social Security Administration, a 65-year-old today has a nearly 20-year retirement ahead—possibly more. Add inflation, rising healthcare costs, and uncertain markets, and that tax-advantaged account may not stretch as far as you think. So how can we rethink this tool and ensure we’re truly future-proofing our financial lives?

A 401(k) Is a Good Start—But It’s Just a Start

Let’s be clear: the 401(k) is still a powerful vehicle for retirement savings. Contributions are tax-deferred, and if your employer offers a match, that’s essentially free money. But there are limitations.

First, contribution limits can restrict how much you set aside each year. For 2024, the cap is $23,000 (plus an additional $7,500 if you’re over 50). While that sounds generous, it may not be enough to sustain a multi-decade retirement—especially if you start saving later in life.

Second, many plans have limited investment choices. That could restrict your ability to diversify or manage risk effectively as your needs change.

Third, 401(k)s aren’t always portable. If you change jobs often, rolling over accounts or managing multiple plans can become complicated and easy to neglect.

Supplement Your Savings with Other Tools

One of the smartest things you can do is layer your 401(k) with other savings and investment vehicles:

• Roth IRA: Offers tax-free withdrawals in retirement, which balances out the tax-deferred nature of your 401(k). Check out IRS Roth IRA guidelines for income limits and details.
  
  
• Health Savings Account (HSA): If eligible, this triple tax-advantaged account can act as a stealth retirement fund. Contributions are tax-deductible, earnings grow tax-free, and withdrawals for medical expenses are also tax-free. Learn more at HealthCare.gov.
  
  
• Taxable Brokerage Accounts: While not tax-advantaged, these accounts offer flexibility. You can invest in a wide range of assets and withdraw funds anytime without early penalties.
  
  
• Annuities or Real Estate: These tools can provide additional income streams later in life. Just be sure to do your homework and consult with a fiduciary advisor before diving in.
  
  

Reframe Retirement as a Multi-Stage Journey

We’re not retiring the same way our grandparents did. Many of us will “retire” from one career only to start another—or continue working part-time, consulting, or launching businesses well into our 70s and 80s.

The Stanford Center on Longevity emphasizes the importance of viewing retirement as a phase of “reallocation” rather than just withdrawal. According to a Stanford report, most people should plan for three or more distinct stages of retirement, each with unique spending and income needs.

This redefinition requires flexibility, and a financial plan that can pivot with life’s changes.

Key Actions to Take Now

1. Run a 100-Year Projection
    Use planning tools like NewRetirement or Personal Capital to model different longevity and retirement scenarios. Factor in healthcare, inflation, travel, and part-time income.
   
   
2. Meet With a Fiduciary Advisor
    Choose someone who has a legal obligation to act in your best interest. Ask them: “What if I live to 100?” If their plan doesn’t adjust accordingly, it’s time to rethink your strategy.
   
   
3. Increase Your Contributions Annually
    Even a 1% increase per year can add up over time. Take advantage of auto-increase features in your 401(k) or set calendar reminders to reassess each year.
   
   
4. Teach the Next Generation
    Modeling good financial planning doesn’t just help you—it sets an example. Talk to your children or grandchildren about longevity, financial independence, and long-term thinking.
   
   

Interactivity: Reflect and Engage

• Have you checked whether your current 401(k) strategy aligns with living to 100?
  
  
• What other tools or income streams have you considered?
  
  
• How often do you revisit your financial plan to account for life changes?
  
  

“The goal isn’t to retire early—it’s to live fully for as long as possible.” And that requires a flexible, evolving plan that goes far beyond a single account.

Rethinking the 401(k) means taking ownership of your long-term financial future. It means adding tools, adjusting expectations, and staying engaged every step of the way.

What’s your approach to building a 100-year financial life? What challenges have you encountered—or solutions you’ve found? Head to the Age Brilliantly Forum and share your thoughts. Your experience could help inspire someone else on their journey to live brilliantly—at every age.