It’s a big myth that a comfortable retirement can be achieved with Social Security benefits alone. If you earn an average wage, you can expect Social Security to replace about 40% of your pre-retirement income.

Personally, I’m not too excited about the idea of a 60% pay cut. I do expect my expenses to go down in retirement, but not necessarily by that much. So instead of relying on Social Security for the bulk of my retirement income, I’m taking steps to build savings on my own.

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Now one popular retirement savings strategy is to load up a 401(k) or IRA with investments. And I’m doing that, to some degree.

But I’m also not keeping all of my long-term savings in a tax-advantaged account like these. And there’s a big reason for that.

When you want flexibility

The benefits of saving in a 401(k) or IRA for retirement are clear. With the traditional version, you get a tax break on contributions, and you also get tax-deferred gains. With a Roth 401(k) or IRA, you lose the up-front tax break but enjoy tax-free gains and withdrawals from your account.

Despite these perks, I’m keeping a decent chunk of my nest egg outside of a tax-advantaged account. And there’s a reason.

First, 401(k)s and IRAs come with annual contribution limits. Since I’m a diligent saver, I’ve been in a position in recent years to fund my retirement beyond these limits.

But more so than that, I have no idea what the future has in store for me. A big part of me never wants to retire. And I certainly have no desire to retire early. But if that ends up being the case due to circumstances outside my control, I don’t want to risk the early withdrawal penalties that come with IRAs and 401(k)s. By keeping a good chunk of my nest egg outside of these accounts, I get the flexibility to pull my money out when I want to.

And also, I get the option to not withdraw my money when I don’t want to. Traditional 401(k)s and IRAs impose required minimum distributions. Those can be a huge hassle if you’re a retiree who doesn’t need the money and hates paying extra taxes.

I may not fall into the first category, but I can already tell you I’m in the latter category. By keeping funds in a taxable brokerage account, I’m still giving the IRS a portion of my gains. But I’m not being compelled to take RMDs, which, to me, has a lot of upside. (And you should know that the penalties for not taking RMDs can be worse than the taxes on them, so blowing them off isn’t a great solution.)

A strategy that may work for you, too

I definitely recommend taking advantage of 401(k)s and IRAs for the tax benefits involved. But I also think it’s wise to keep a decent chunk of retirement cash outside of these accounts. So if you’re someone with 100% of your savings in a 401(k) or IRA, you may want to tweak your strategy so you don’t get burned.

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