If you’re a high achiever, chances are you’ve been disciplined about saving for retirement.
You max out your 401(k), contribute to an IRA when you can, and maybe even have a taxable brokerage account on the side. You’re doing the responsible thing.
But here’s the problem I see over and over again—even among very smart, financially successful people:
They’re overloading the retirement bucket… and starving everything else.
Let’s break this down.
The 3 Buckets of Retirement Planning
Most comprehensive financial plans organize savings into three “buckets”:
- Taxable – Regular brokerage or savings accounts.
- Tax-deferred – Traditional 401(k)s, IRAs, etc.
- Tax-free – Roth IRAs, Roth 401(k)s, HSAs (when used strategically).
Each one has its role. But the magic isn’t in maxing out a single bucket—it’s in balancing them.
What Happens When the Buckets Are Out of Whack?
When everything is stuffed into your 401(k), you may not feel the pain right away. But fast forward to retirement—or even just a big life change—and here’s what often happens:
- Liquidity traps. You need cash for a big opportunity or emergency, but all your money is locked in retirement accounts with penalties for early withdrawals.
- Tax surprises. RMDs (required minimum distributions) hit harder than expected, bumping you into a higher tax bracket in your 70s and beyond.
- Guilt about spending. You’ve saved for decades, but now every withdrawal feels like you’re doing something wrong—because you don’t have a clear strategy for how and when to use the funds.
Smart ≠ Immune to Misalignment
One of the most common things I hear from new clients is:
“I thought I was doing everything right… but now I’m second-guessing everything.”
And that makes sense.
The rules around taxes, distributions, and retirement income aren’t intuitive. Even highly educated professionals can make missteps—not because they’re careless, but because the system is complex.
What a Balanced Plan Looks Like
Good planning isn’t about maxing one account. It’s about creating strategic flexibility.
- With too much in the taxable bucket, you might miss out on tax-deferred growth.
- With too much in the tax-deferred bucket, your future self could face steep tax bills.
- With too little in the tax-free bucket, you lose one of the best long-term planning tools available.
The right mix allows you to live, give, and pivot—without friction.
And that’s where working with a financial advisor makes a difference. I don’t just look at account balances. I help you understand the flow of your money—how to use it, when to access it, and how to keep as much of it working for you as possible.
Final Thought
If you’re reading this and thinking, “I’ve got money saved… but is it in the right places?”—you’re not alone.
Fixing a lopsided bucket strategy is one of the most valuable things you can do in midlife. And it’s never too late to rebalance.
Let’s make sure all your hard work pays off—not just someday, but at every stage along the way.
Schedule a call with me today to talk about your situation and what you could be missing out on.
Investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Rebalancing a portfolio may cause investors to incur tax liabilities and/or transaction costs and does not assure a profit or protect against a loss. Caviness Wealth Management and LPL Financial do not provide legal or tax advice. Please consult with your tax or legal advisor regarding your personal situation.