Sock Away for Later: Your Guide to Retirement and Non-Retirement Assets

Philip Kim CFP®, ChFC®, CLU®, RICP®, CRES |

Picture yourself basking on a beach, finally free from the daily grind. Sounds idyllic, right? But achieving that dream retirement requires planning and understanding where your money goes. That's where the distinction between retirement assets and non-retirement assets comes into play.

Think of it like packing for two different trips:

  • Retirement assets are like your luggage for the future vacation. These accounts are specifically designed to help you accumulate funds for your golden years. They often come with tax advantages, meaning the government gives you a break on taxes now to incentivize saving for later. Here are some popular examples:
    • 401(k)s and 403(b)s: Offered by many employers, you contribute a portion of your paycheck before taxes are taken out. This allows your money to potentially grow faster due to tax-deferred compounding.
    • IRAs (Individual Retirement Accounts): These allow you to contribute money yourself, even if your employer doesn't offer a retirement plan. Contributions can be made with pre-tax or after-tax dollars, depending on the type of IRA you choose.
    • Roth IRAs: Contributions are made with after-tax dollars, but the beauty lies in tax-free withdrawals in retirement, as long as you meet certain eligibility requirements.
  • Non-retirement assets are like your everyday travel bag. These funds are used for various expenses throughout your life, from groceries and bills to vacations and unexpected emergencies. They don't have any special tax benefits, but you have more flexibility in accessing them. Here are some common examples:
    • Checking and savings accounts: Your go-to for everyday expenses, emergency funds, and short-term savings goals.
    • Taxable investment accounts: Allow you to invest in stocks, bonds, and other assets for potential growth, but remember, you'll pay taxes on any capital gains you earn.
    • Real estate: Your home or other properties you own, used for living or generating rental income. While not directly invested for growth, real estate can appreciate in value over time and provide additional income streams.

Contributions to a Roth IRA may generally be withdrawn tax-free at any time. Earnings may generally be withdrawn income tax-free if the individual has held amounts in a Roth IRA for at least 5 years and the withdrawal is made after age 59 ½. If the withdrawal is made before the 5-year period and age 59 ½, income taxes and an additional 10% federal income tax penalty may apply. Other exceptions may apply.

Here's a handy table to compare the key differences:


Retirement Assets

Non-Retirement Assets


Save for a comfortable retirement

Used for everyday expenses and various financial goals

Tax benefits

Often have tax advantages (e.g., tax-deferred growth or tax-free withdrawals)

No special tax benefits


May have restrictions on withdrawals before retirement age

Generally more accessible, but withdrawals may be taxed


  • Balance is key: It's important to strike a healthy balance between saving for retirement and having enough for current needs. Consider your lifestyle, income, and financial goals when allocating your funds.
  • Seek professional guidance: A qualified financial advisor can help you develop a personalized plan, choose the right investment options for your specific goals, and navigate the complexities of retirement planning.
  • Start early: The power of compound interest is real! The sooner you start saving for retirement, the more time your money has to grow exponentially, setting you up for a more financially secure future.

So, pack your bags wisely! By understanding the differences between retirement and non-retirement assets, planning strategically, and seeking professional guidance, you can help ensure a smooth and enjoyable journey towards your dream retirement destination.


This article was curated by Signature Wealth Concepts and is being provided for informational purposes only based on our general understanding of the subject matter. It does not constitute a solicitation or offer of any particular product or service and is not intended, and should not be relied upon, as insurance, investment, financial, tax or legal advice.
Duly registered and duly licensed financial professionals with Signature Wealth Concepts offer securities through Equitable Advisors, LLC (NY, NY 212-314-4600), member FINRA/SIPC (Equitable Financial Advisors in MI & TN); offer investment advisory products and services through Equitable Advisors, LLC, an SEC-registered investment advisor; and offer annuity and insurance products through Equitable Network, LLC (Equitable Network Insurance Agency of California, LLC; Equitable Network Insurance Agency of Utah LLC; Equitable Network of Puerto Rico, Inc.). Equitable Advisors and Equitable Network are affiliates and do not provide tax or legal advice or services. You should contact your personal tax and or legal advisors regarding your specific situation before taking action. Signature Wealth Concepts is not owned or operated by Equitable Advisors or Equitable Network. PPG – 6430921.1 (3/24)(Exp. 3/26)