IRAs & 401(k)s: What You Need to Know

Traditional IRAs and 401(k)s can be valuable retirement tools — but they also come with considerations that many people aren’t fully aware of. These accounts are tied directly to market performance, which means your principal can fluctuate based on market volatility. Additionally, while contributions are made pre-tax, withdrawals in retirement are fully taxable.

It’s important to recognize that tax-deferred does not mean tax-free. When you take distributions later in life, they are taxed at whatever the rates are at that time — which may be higher than they are today.

As life changes, so do tax deductions. Many people enter retirement without the same deductions that reduced their taxable income during their working years. Mortgage interest, dependent deductions, business write-offs, and retirement contributions often decrease or disappear — meaning more of your retirement income may be exposed to taxes.

The goal is not to avoid these accounts entirely, but to understand how taxes may impact your long-term plan and explore additional strategies that balance growth, protection, and tax efficiency.

Thinking About Taxes: Seed vs. Harvest

One simple way to view tax planning is through the idea of paying taxes on the “seed” (before growth) versus paying taxes on the “harvest” (after growth).

Traditional retirement accounts tax the harvest — your withdrawals — at future tax rates. If tax rates rise over time, this could mean paying more later on.

Many people prefer strategies that allow them to pay taxes now, when rates may be more predictable, and enjoy tax-advantaged access to funds in retirement. This approach can create greater clarity and reduce uncertainty around future tax obligations.

The goal is to create a balanced plan that supports tax efficiency throughout your lifetime, while giving you more control over how and when you access your money.

We help individuals understand how different tax structures work so they can choose a strategy that aligns with their long-term financial goals.

Understanding Market Volatility & Your Retirement

Market volatility is a natural part of investing, but it can feel overwhelming when retirement is on the horizon. Many people remember how significant downturns impacted retirement accounts in the early 2000s and 2008, reducing savings quickly and unexpectedly.

A well-rounded retirement plan should include strategies that balance growth potential with protection. For many people, the concern is not about avoiding the market entirely — it’s about avoiding the risk of losing years of progress during periods of instability.

Certain financial strategies allow your money to grow with the market while remaining protected from market loss. Indexing, when used appropriately, helps create this balance by offering:

  • Protection of principal

  • Competitive, long-term growth potential

  • Stability during periods of volatility

When applied thoughtfully — such as through properly structured and maximum-funded Indexed Universal Life policies or select annuity options — indexing can help support long-term financial confidence.

Disclaimer: Life insurance policies are not investments and should not be purchased as investment products.

A Strategy Focused on Long-Term Stability

Many families and individuals are looking for retirement strategies that offer both growth and protection — without unnecessary tax exposure or market risk. When structured well, tax-advantaged approaches have historically supported long-term, consistent performance, often in the 5%–10% annual range, depending on market conditions and policy design.

At that pace, every $1 million accumulated could potentially provide $70,000–$100,000 of tax-advantaged retirement income while helping preserve the original principal.

At Evergreen Wealth & Co., our commitment is to help you:

  • Protect the wealth you’ve built

  • Strengthen your long-term retirement strategy

  • Support tax efficiency

  • Build financial confidence for the years ahead

We’re here to provide clarity, education, and guidance — so you can make informed decisions with confidence.