Common 401(k) FAQs

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

More From Eric:

The host: Eric Peterson - Contact - Call: (515) 226-1500

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

April 24, 2025

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 More

Early Retirement: Dream Come True or Financial Trap?

April 10, 2025

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 More

What 400+ Advisors Say Really Keeps Retirees Up at Night

April 3, 2025

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 More

Bracket Busters and Stock Flops: The Risky Game of Picking Winners

March 27, 2025

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 More

Are Hidden Fees Draining Your Retirement Savings?

March 20, 2025

In this episode, Eric reveals the true cost of investing and how to protect yourself from unnecessary financial drains.

Read More

What Game Night Can Teach Us About Financial Planning

March 13, 2025

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 More

Mailbag – Upsizing, Financial Advisors & Business Owner Planning

March 6, 2025

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 More

Planning for Unique Situations in Retirement

February 27, 2025

While many face the same general retirement concerns, each individual’s situation is unique, requiring tailored solutions.

Read More

Planning for Kids, Grandkids, & Your Future

February 20, 2025

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

Leave a Comment