Understanding why the Side Fund is Used

When the client has a defined contribution account (such as a 401(k)), why does TRAK use the Side Fund for additional savings and not the client's account?

When TRAK determines there is a shortfall in the client's retirement savings, TRAK will use the Side Fund account; this automatically happens even if the client has a defined contribution account. The reason: if the client does have a defined contribution account, the payout method of the account may restrict distribution of monies from the account.

A couple examples may help understand the important function of the side fund.


Example 1

Example 2