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3 Things You Need To Know About Your 401(k)
Manage episode 338598470 series 3386110
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Whether you’ve been investing in a 401(k) for decades or you just made your first contribution, there are 3 things you need to know about your 401(k). For years we have gotten 3 common questions that we are going to answer on this episode of the Retire Once Show.
How much should you save in your 401(k)? If your company offers a match, it is important to take advantage of the full match or you are leaving free money on the table. What about after that? Is the 401(k) the best place to save after you reach the company match? We dive into an article written by Nick Maggiulli where he analyzes whether or not you should max out your 401(k).
Is taking out a loan from your 401(k) a good idea? There are times when you might find yourself in a financial bind and need access to money. Whether it is for medical costs or home renovations. Most 401(k) plans offer the ability to take a loan from your 401(k) so you are not faced with the taxes and potential penalty that is accompanied by a cash withdrawal. While a 401(k) loan helps you save on interest because you are paying yourself instead of a bank, that doesn’t mean it is the best financial decision to make.
A recent study shows that there is an estimated 24.3 million 401)k) accounts and $1.35 trillion in assets that have been left behind at old employers. There are a number of options to choose from when handling your old 401(k) accounts. You can leave them where they are at in the old employer’s plan. You can roll the assets into your new employer’s plan. You can roll the assets into an IRA. You can convert the assets to a Roth IRA. Lastly, you can cash out the account where you would pay taxes and a possible penalty. Deciding what to do with your old 401(k) accounts can have a long-term impact on your retirement success and it is an important decision to make.
Submit questions to the show at Retire@theoremwm.com
-Johnathan Rankin CRPC® CEPA®, Founder & CEO,
- Melissa Rankin - Wealth Management Advisor
Theorem Wealth Management
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CHAPTERS
00:00 - Intro
2:15 - How Much Should You Contribute To Your 401(k)
9:05 - 401(k) Loans
14:07 - Options For Your Old 401(k) Accounts
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🎁 [ULTIMATE RETIREMENT TOOL KIT]
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