An accomplished professional, Dean Vagnozzi is the president of A Better Financial Plan, LLC which teaches clients how to manage and grow their finances. With prior experience working at SAP, Anderson, and Deloitte Consulting. Dean Vagnozzi believes that 401k retirement plans are not the best financial investments.

A 401(k) is a common retirement savings plan that allows employees to invest part of their earnings by incurring tax later when employees attain the retirement age and start to withdraw funds. Even though 401(k) are common investment vehicles, they have several limitations. For starters, 401(k) does not allow you to access your money until you reach the age of 59.5 or older. This means that you cannot withdraw the money prematurely to support your cost of living as well any emergency expenses that might come up.

In addition, 401(k) increases the risk of paying higher taxes in the future as the concept of postponing the payment of taxes to a later date can be risky. Given the current economic times, it is difficult to predict future trends in taxes and therefore investors prefer to pay their taxes now when the rates are reasonable as opposed to paying in future when tax rates could be way higher.