Many of us have a 401(k), but how much do you really know about it? What frequently asked questions does Phil get when it comes to investing wisely?
Click the timestamps below to jump ahead in the episode…
Other Retirement Facts:
Are you contributing to a 401(k)? Whether you’ve been contributing for years or are just getting started, there are a number of things you should know. On today’s podcast, Phil answers some common questions all about the 401(k).
Should you agree to the free advice offered with the plan? Or is it better to skip it? If you do get the free advice, understand that it’s just for a certain aspect of your financial plan. Don’t think you’ll get a comprehensive plan for free.
Is taking out a 401(k) loan a good idea? It’s probably not the first option, but it can be an option if needed. Remember some of the rules. For instance, if you aren’t able to pay it back, you’ll end up paying taxes on the distribution. Is there another option you can take instead?
After you leave a company, should you do a rollover or leave the money where it is? What advantages are there to moving it? What do you need to be cautious about? Why might someone choose to not do a rollover? Don’t leave a 401(k) behind!
Target date funds are often easy, but are they the best fund for you? What are the pros and cons? Is it as aggressive or conservative as you think? How risky do you want to be?
How much do you contribute to your 401(k)? Does your company have a match? How much do you want to save and what other options do you have? Should you be contributing more to a Roth? How does your tax strategy fit into that decision?
What questions do you have about your 401(k)?
Listen to the entire episode or click on the timestamps below to skip to a particular FAQ.
1:44 – What frequently asked questions does Phil hear about 401(k)s?
2:08 – Should you take the free advice offered through your employer’s plan?
3:43 – Are 401(k) loans good or bad?
5:41 – When does a 401(k) rollover make sense?
8:14 – Should you use target date funds?
10:50 – What should your contribution amount be?
11:52 – Which is better, the traditional or Roth?
Thanks for listening! We’ll be back with another episode next week.
A Quotable Moment:
“Contribute up to the match, that’s free money. Going beyond that, it really depends on how much you want to save and what other options you have. There’s pros and cons of putting money in the 401(k).“