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Outdated Financial Rules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

Translating Financial Jargon

February 25, 2021

Do you know the difference between large cap and small cap funds? What are basis points? This episode will discuss various financial jargon to help translate what these really mean.

Read More

Financial Fill in the Blank

February 18, 2021

What’s the best way to not run out of money in retirement? What are most people worried about when retirement planning? Eric fills in these blanks in today’s episode.

Read More

What to Know About Biden’s Initial Executive Orders

February 11, 2021

Let’s take a look at some of Biden’s executive orders so far in his first few weeks. How could they alter your financial plan?

Read More

Mailbag: Retirement Planning With Separate Bank Accounts

February 4, 2021

From managing your income as a contract employee to managing your income in retirement, Eric answers three questions from the mailbag in today’s episode of the podcast.

Read More

Estate & Legacy Planning FAQs

January 28, 2021

When receiving an inheritance, a lot of interesting or unexpected scenarios can occur. We discuss four different situations to hear Eric’s advice on how to handle them on today’s episode of the Retirement Ready podcast.

Read More

What Does Mark Twain Have to Say About Your Financial Plan?

January 21, 2021

What financial wisdom can we glean from the sayings of Mark Twain? Believe it or not, many of these quotes are quite relevant today.

Read More

New Year, New Ideas to Consider

January 14, 2021

We all like the idea of a fresh start in the new year. What changes are already underway? Or, what changes might be unwelcomed when it comes to your retirement plan?

Read More

Mailbag: Should I Use My Severance Package to Pay Off the House?

January 7, 2021

Whether you want to learn more about using your HSA or trying to make strategic use of your severance package, Eric answers three questions from the mailbag. Do any of these questions relate to your situation?

Read More

Things Your Advisor Should Be Doing

December 30, 2020

What kind of decisions are you making alongside your financial advisor? How do you know if they are doing everything you need when it comes to creating and implementing a retirement plan? Eric talks through what you deserve from a financial advisor and how his team works with clients to meet their needs.

Read More

The Three Worlds of Money

December 23, 2020

Do you know the three worlds of money? Where does the bulk of your money live? Is your money appropriately balanced across all three worlds? We’ll break it all down on this episode.

Read More

Leave a Comment