The Setup:

On this episode of Unlocking Your Financial Future, we answer some frequently asked questions about 401Ks.

Click the timestamps below to skip to a specific topic in the episode.

The Combination and Key Points: 

Most people have a 401K or other retirement plan, but it’s not as simple as contributing money and collecting it when you retire. There are a lot of decisions you can make about investments, loans, rollovers and more.

On this episode of Unlocking Your Financial Future, we answer some frequently asked questions about 401Ks.

Should I accept 401K advice from my company?

It depends. If they can tell you more about the investment options and structure of your 401K, that’s great. But they probably don’t know much about your unique situation, so it’s best to speak with another financial advisor as well.

Should I take out a 401K loan?

A lot of plans offer 401K loans, and it’s something you can explore. It’s going to depend on what you need that money for and what stage of life you’re in.

If you’re in your mid-40s, for example, and have a steady, secure job, you may want to consider getting a 401K loan to pay off debt with a high interest rate. That will save you from getting a personal loan or putting it on a credit card.

If you retire with a loan on your 401K and don’t pay that back, be prepared to pay taxes.

“It’s not free money. It’s something you have to pay back,” said Ben.

Are 401K rollovers a good idea?

It makes sense almost anytime they’re offered, but it depends on your situation.

“Anytime that someone is generally away from their old job, you have an old 401K, you’re able to roll that to an IRA,” said Ben.

Your 401K has limited investment options, maybe 10, and you need to find out what the fees are. If you meet with us, we can explain: “Here’s all your options currently. Here’s what it’s costing you, and then here’s what we would do differently,” said Ben.

Listen to the full podcast to hear more about these questions, as well as 401K target date funds, company matches and Roth 401Ks. Use the audio player above or the timestamps below to jump to a specific section.

[1:51] – Should I accept 401K advice from my company?

[3:34] – Should I take out a 401K loan?

[5:47] – Are 401K rollovers a good idea?

[8:00] – Should I use target date funds?

[10:40] – Should I take my company match or contribute more?

[12:06] – Should I do a Roth 401K?

Thanks for listening to another episode of Unlocking Your Financial Future. We’ll talk to you again next week!


 

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