Beyond the 401(k): Advanced Insights from a Retirement Planner in Iowa

For high-net-worth individuals, retirement planning extends far beyond the traditional 401(k). While employer-sponsored plans provide a solid foundation, they often fail to capture the full range of opportunities available to those with substantial wealth. A more sophisticated approach—incorporating tax-efficient strategies, alternative investments, and legacy planning—can help optimize financial confidence and support long-term goals.

Diversifying Retirement Income Streams

Relying solely on a 401(k) or IRA for retirement income may lead to unnecessary tax burdens or liquidity constraints. High-net-worth individuals often benefit from diversifying retirement savings across multiple vehicles. Roth IRAs, cash balance plans, annuities, and taxable investment accounts each serve different purposes in a well-structured retirement plan.

For instance, a Roth conversion strategy can help create a tax-free income stream later in life. Converting traditional IRA assets to a Roth IRA during lower-income years can reduce long-term tax liability, allowing assets to grow tax-free and withdrawals to remain untaxed in retirement.

Tax-Smart Withdrawal Strategies

Structuring retirement withdrawals efficiently plays a crucial role in preserving wealth. Drawing income from tax-deferred, taxable, and tax-free accounts in a strategic order can minimize lifetime tax obligations. Instead of depleting one account type first, blending withdrawals from multiple sources can help maintain a lower overall tax rate.

Additionally, high-income retirees may need to account for required minimum distributions (RMDs) from traditional retirement accounts. Proactively managing RMDs—such as by using qualified charitable distributions (QCDs) or shifting assets to tax-advantaged accounts—can help prevent unnecessary tax liabilities.

Incorporating Alternative Investments

Many traditional retirement plans focus on stocks, bonds, and mutual funds. However, those with significant wealth often seek diversification through alternative investments such as private equity, real estate, and hedge funds. These options can provide additional income, hedge against inflation, and enhance portfolio resilience.

For instance, real estate investments—including direct ownership, real estate investment trusts (REITs), or Delaware Statutory Trusts (DSTs)—offer potential for appreciation and income generation. Meanwhile, private equity investments may provide long-term growth opportunities that extend beyond public markets.

While these options carry unique risks, they can complement a broader retirement strategy when structured appropriately.

Legacy and Philanthropic Planning

Retirement planning isn’t just about personal financial confidence—it also involves structuring assets in a way that supports family members and philanthropic causes. Charitable remainder trusts (CRTs), donor-advised funds (DAFs), and family foundations allow individuals to align their wealth with their values while benefiting from tax advantages.

Additionally, creating an estate plan that integrates trusts, life insurance, and gifting strategies can help transfer wealth efficiently while reducing estate tax exposure. Structuring assets with future generations in mind can prevent unintended tax consequences and help with a seamless transition.

An Inclusive Approach to Retirement

A well-designed retirement plan goes beyond a single account or investment strategy. By incorporating tax efficiency, diversified income sources, alternative investments, and legacy planning, individuals can build a structure that supports long-term financial success. Thoughtful planning helps create flexibility in retirement, allowing for both financial confidence and the opportunity to shape a lasting legacy.

Planning doesn’t have to be about control.

It can be about freedom.

We work with people who want more intention- not more to-do lists.

Important Disclosures:

This blog contains general information that may not be suitable for everyone. The information contained herein should not be construed as personalized investment advice. There is no guarantee that the views and opinions expressed in this blog will come to pass. Investing in the stock market involves gains and losses and may not be suitable for all investors. Information presented herein is subject to change without notice and should not be considered as a solicitation to buy or sell any security. Legacy Financial Group does not offer legal or tax advice. Please consult the appropriate professional regarding your individual circumstance. Past performance is no guarantee of future results.

A REIT is a security that sells like a stock on the major exchanges and invests in real estate directly, either through properties or mortgages. REITs receive special tax considerations and typically offer investors high yields, as well as a highly liquid method of investing in real estate. There are risks associated with these types of investments and include but are not limited to the following: Typically no secondary market exists for the security listed above. Potential difficulty discerning between routine interest payments and principal repayment. Redemption price of a REIT may be worth more or less than the original price paid. Value of the shares in the trust will fluctuate with the portfolio of underlying real estate. Involves risks such as refinancing in the real estate industry, interest rates, availability of mortgage funds, operating expenses, cost of insurance, lease terminations, potential economic and regulatory changes. This is neither an offer to sell nor a solicitation or an offer to buy the securities described herein. The offering is made only by the Prospectus. 

There are material risks associated with investing in DST properties and real estate securities including liquidity, tenant vacancies, general market conditions and competition, lack of operating history, interest rate risks, the risk of new supply coming to market and softening rental rates, general risks of owning/operating commercial and multifamily properties, short term leases associated with multi-family properties, financing risks, potential adverse tax consequences, general economic risks, development risks, long hold periods, and potential loss of the entire investment principal. Past performance is not a guarantee of future results. Potential cash flow, returns and appreciation are not guaranteed. IRC Section 1031 is a complex tax concept; consult your legal or tax professional regarding the specifics of your particular situation. This is not a solicitation or an offer to sell any securities. DST 1031 properties are only available to accredited investors (typically have a $1 million net worth excluding primary residence or $200,000 income individually/$300,000 jointly of the last three years) and accredited entities only. If you are unsure if you are an accredited investor and/or an accredited entity please verify with your CPA and Attorney.

Asset Allocation does not guarantee a profit or protect against a loss in a declining market.  It is a method used to help manage investment risk.