Making The Right Decisions With Your 401(k)

Today’s Prep:

Are you wondering what to do with your 401(k)? How can you make sure this investment is set-up well to suit your needs? Let’s answer some of the most common questions regarding this popular retirement account.

(Click the featured times below to jump forward in the episode)

Equipping Points:

When it comes to your 401(k) account through work, you may still have a number of decisions to make. On today’s episode of the podcast, we’ll run through several frequently asked questions so you feel confident in your decisions. 

Should you take the advice that is offered either free or low-fee from the 401(k) program? Figuring out what to put money into is something that you can find several free resources on. During the accumulation stage, you want the cheapest way to do that and then pay fees later when you need to prepare for retirement with a financial planner.   

If you can take a loan out of your 401(k), should you? While having no debt is the best option, borrowing from the 401(k) at least has the interest coming back to you. The key is paying yourself back. Consider the situation and what is really your best option.

When should you do a 401(k) rollover? Is there ever a time you should keep it in the plan even after you leave a job? What options do you have once you do a rollover?

If there is a target date fund, is this a good investment option? Target dates mathematically change once they get closer to a certain date from stocks to bonds. Target date funds are easy and change, but find out if they stay stagnant after reaching that target date. What is your allocation for your balance vs. your allocation for your contributions?

Finally, is it better to have a Roth or traditional 401(k)? Why would you pick one over the other? When are you paying taxes on those contributions and why does it matter?

Listen to the entire discussion or click on the timestamps below to get your FAQs answered.

1:04 – Is free advice worth taking?

3:10 – Is it a good or bad idea to take a loan out on a 401(k)?

4:45 – When should you do a 401(k) rollover?

7:00 – Should you use target date funds?

9:15 – Which is better: Roth or Traditional 401(k)?

Today’s Takeaway:

“If you can put money away now, pay taxes when tax rates are lower, and insulate it from all future tax increases. That’s the best investment you can do.”

-Eric Peterson

Related Resources:

Outdated Financial Rules

Financial Truth Bombs

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

Things Your Financial Advisor Might Not Be Doing

December 7, 2023

Sometimes people get advice from financial “professionals” who maybe aren’t the right fit for their needs. Today, we discuss some of the things your advisor might not be talking to you about.

Read More

Tax Consequences

November 30, 2023

Taxes are a major part of your life, especially your life in retirement. Having a good understanding of how you can prepare may save you in the long-run. Discussing your options with a financial advisor can help point you in the right direction. Listen in as we chat about tax consequences in today’s episode.

Read More

Cutting Corners Financially

November 21, 2023

Sometimes we want to take the easy way out instead of the smarter way. Today, we talk about ways people have tried to cut corners financially and where that falls apart. Think you can take extra risk to make up for lost time? Letting your financial life fall to disarray?

Read More

Risk Aversion

November 16, 2023

No one loves losing money. So how do you strike the right balance of investing vs. being overly risk averse? Eric talks through how he guides clients through this dilemma. You might be surprised to find out your investment accounts are riskier than you realized!

Read More

Tax Planning in Retirement

November 9, 2023

Next to income, tax planning is the most important thing Eric focuses on with his clients. If you can control how much tax you pay, it’s more money you get to keep, spend, and enjoy. Retirement is a prime time to focus on tax planning as you have more opportunity to control the taxes you owe. 

Read More

Overconfidence in Your Financial Life

November 2, 2023

When can overconfidence cause catastrophe? If you are setting your financial goals based on a rule of thumb or a certain arbitrary dollar amount, you might want to reconsider. Having overconfidence, especially in the wrong things, can lead to financial disaster.

Read More

Learning From Financial Mistakes

October 26, 2023

Sometimes we learn from our mistakes, and unfortunately, sometimes we make the same mistake over and over. Having a financial advisor can help you navigate through your financial decisions so you don’t get stuck in the same rut of financial mistakes on repeat. In today’s episode, Eric will share some of the mistakes that he sees people make frequently. 

Read More

The Hierarchy Of Retirement Needs

October 19, 2023

You may be familiar with Maslow’s hierarchy of needs which breaks down a human’s needs into five different tiers. In today’s episode, we apply those tiers to what you need when retirement planning. Have you planned and saved in a way that will cover all of these needs?

Read More

Finances with Forrest Gump

October 12, 2023

The classic movie, Forrest Gump, is full of great quotes. We see how some of those quotes can be applied to your finances. From figuring out what to do when life isn’t going just like you thought to learning from past mistakes, there are a lot of takeaways from Forrest.

Read More

Financial Matters People Put Off

October 5, 2023

Humans can be really good at procrastination. When we have the basics covered, it’s easy to put off the decisions and actions that we don’t want to deal with just yet. Today, we talk about some of the financial matters people are prone to put off and what you would be better off tackling right away. You might be surprised to find it wasn’t so hard to handle after all!

Read More

Leave a Comment