Today’s Prep:
What are some of the most frequently asked questions when it comes to a 401(k)? There can be a lot to a 401(k) so we’ll help you plan correctly.
Equipping Points:
If you get a 401(k) through work, you might have questions or certain scenarios that come up. Eric shares his thoughts and some guidance on what you should keep in mind when it comes to these retirement accounts.
When your company has a 401(k) program, they may offer low fee advice. Is this something you should take? Eric says when you’re in the accumulation phase, you want to lower your fees as much as possible. But know what that fee covers. Will they be creating an entire plan or just helping you choose the funds? Inside your 401(k) there are usually target-date funds. You might find that the target date funds are similar to what the 401(k) program advice provides for a fee.
How much should you really put in that 401(k) account? Should you put as much in as you can or only up to the match? This used to be a question more when people were deciding between a Roth IRA or 401(k). Now, so many 401(k)s offer a Roth 401(k) option. Saving in a tax-free account is always better. The nice thing about a 401(k) is that it’s a payroll deduction, so you are systematically investing without having to do anything. You can put a lot more into a 401(k) than a Roth IRA, but if you can do both, do both.
Are target-date funds a good idea to use? Eric says this is a good way to put your savings on autopilot. But, understand that your contribution should be a different risk tolerance than your balance. Also, find out what happens once you reach that target date.
Finally, is a 401(k) loan a good idea or a bad idea? You are taking money out of the market, so if you can find a better way to do it then do that instead. But if something unexpected arises, it is an option.
Listen to the entire episode or skip ahead using the timestamps below.
1:11 – Company plan offers advice for a low fee, should I take it?
4:04 – Do I put as much as I can in or just up to the match?
6:03 – Should I use target-date funds?
7:16 – Is a 401(k) loan a bad idea?
Today’s Takeaway:
“As you’re accumulating, depending on what stage your life’s in, your contribution should be a different risk tolerance than your balance.“
-Eric Peterson
Subscribe To The Podcast:
Apple Podcasts - Google Podcasts - Spotify - Stitcher - iHeartRadio - TuneIn
Check out some other recent episodes
Mailbag – Roth IRA, Emergency Funds & Tax-Deferred vs. Tax-Free
Making more money is great, but what happens when it becomes a roadblock for contributing to a Roth IRA? And how can you make your emergency fund work smarter for you? In today’s episode, we pull from the mailbag and answer a mix of listener questions. Eric addresses concerns that reflect the real-life hurdles many face on the road to retirement.
Read MoreHow 2025 Tax Updates Can Impact Your Financial Plan
Although tax season has come to a close, the time for smart tax planning has just begun! In this episode, we unpack the upcoming tax updates that could affect your planning for the next few years, including changes to 401(k) contribution limits, tax deductions, and the potential benefits of using tax-advantaged accounts like HSAs.
Read MoreEarly Retirement: Dream Come True or Financial Trap?
Ever fantasize about leaving your 9-to-5 before traditional retirement age? You’re not alone, but is early retirement even possible? In today’s episode, Eric explores what it really takes to retire early including how to tackle healthcare costs, how to make money last longer and the importance of shifting your mindset from spender to saver.
Read MoreWhat 400+ Advisors Say Really Keeps Retirees Up at Night
What are Americans really concerned about when it comes to retirement? In this episode, we unpack the results of an insightful survey from Financial Advisor Magazine, which was completed by over 400 financial advisors. We’ll also compare these answers with the real-world concerns we hear every day from the clients in our own practice.
Read MoreBracket Busters and Stock Flops: The Risky Game of Picking Winners
March Madness is here, and just like filling out a bracket, picking individual stocks can feel like a thrilling gamble. But the odds of winning big are slim. In fact, history shows that most stock picks, like most brackets, end up busted.
Read MoreAre Hidden Fees Draining Your Retirement Savings?
In this episode, Eric reveals the true cost of investing and how to protect yourself from unnecessary financial drains.
Read MoreWhat Game Night Can Teach Us About Financial Planning
In this episode, Eric breaks down the surprising financial lessons hidden in classic board games, offering valuable insights to help you navigate your retirement strategy.
Read MoreMailbag – Upsizing, Financial Advisors & Business Owner Planning
Join us as we answer questions about the challenges of downsizing, the emotional aspects of planning for family gatherings, and the realities of transitioning into a financial advisory career.
Read MorePlanning for Kids, Grandkids, & Your Future
As many nearing retirement age are discovering, adult children and grandchildren can significantly influence financial strategies, making it crucial to understand how to navigate these relationships effectively.
Read More