I'm No Longer Focused on Funding My 401(k). Here's Why.

There's a reason retirement savers are often encouraged to contribute steadily to a 401(k). Not only do these plans make it easy to build retirement wealth, but they often come with a workplace match.

My situation is a bit different. Even though I've worked for companies in the past that had a 401(k) plan, I've actually never had an employer offer a match. And now, the 401(k) I contribute to is the one I maintain myself -- a solo 401(k) for self-employed folks like myself.

Image source: Getty Images.

Through the years, I've always done my best to max out my 401(k). But I'm changing my retirement savings strategy for one big reason.

It's a matter of flexibility

What I love about my 401(k) is that it gives me a tax break on the money I contribute. I also get to defer gains in my account.

What I don't love about my 401(k) is the set of rules that's attached.

With a 401(k), you're required to leave your money in your account until you turn 59 and 1/2. If you don't follow that rule, you'll face a 10% early withdrawal penalty just for accessing your own savings. There are some exceptions, but for the most part, 59 and 1/2 is when you can safely withdraw your money without losing a chunk off the bat.

The reason I'm starting to think that may be a problem boils down to big changes I can't control.

I'll be blunt. As a full-time writer, I'm worried that AI will come after my job or reduce it substantially.

I'm not saying this is something I'm concerned will happen tomorrow. But I used to imagine myself working as a writer indefinitely. Now, I'm not sure what the future might hold. And I need to be prepared for that.

Part of that means being open to a career shift. But part of that also means setting myself up with savings I can access penalty-free in case I end up needing to tap my nest egg before turning 59 1/2.

For this reason, I'm starting to shift more of my retirement savings into a taxable brokerage account. Unfortunately, as the name implies, there's no tax break on contributions in these accounts like there is in an IRA or 401(k).

And also, you owe taxes on capital gains each year you realize them. With a 401(k) or IRA, you can defer those taxes and potentially pay them at a time when you're in a lower tax bracket.

Putting more money into a taxable brokerage account has definitely changed the way I manage my tax situation. I'm now even more mindful of estimated quarterly tax payments, which I have to make during the year as someone who's self-employed.

A very necessary shift

I've written before that I hope to never truly retire. And I still stand by that. I love what I do, and I also can't imagine myself being happy doing absolutely no work at all.

But at this point, I've realized that I need more flexible access to my savings than what a 401(k) will give me. And I've altered my strategy accordingly.

If you have all of your retirement savings in a 401(k) or another tax-advantaged account, you may want to ask yourself what you'll do if you're forced to start tapping your nest egg before age 59 1/2.

I'm a firm believer that the purpose of having savings is partly to cover expenses and partly to provide peace of mind. Having too much money in a 401(k) does not support the latter for me, which is why I'm switching gears. You may want to do the same.

The Motley Fool has a disclosure policy.