401K Loans and Other Ways to Doom Your Retirement | Summary and Q&A

TL;DR

In this video, Joseph Hogue answers common questions about 401K investing and provides tips to help individuals get their retirement savings back on track.

Key Insights

• 👌 401K investing is highly beneficial, offering employer matches and tax advantages.
• ↩️ Understanding the basics of a 401K, vesting schedules, and investment strategies is vital for maximizing returns.
• ✋ Borrowing from a 401K should be avoided due to high costs and potential penalties.

Transcript

401K plans are easily the best return you’ll ever get investing but most employers do a horrible job at answering your questions. By the end of this video, you’ll have your 401K questions answered and will see exactly what you need to do to get your nest egg back on track. We’re talking 401K investing today on Let’s Talk Money! Beat debt. Make mone... Read More

Questions & Answers

Q: What is a 401K?

A 401K is a retirement investment account set up by an employer, where employees can contribute pre-tax money that is often matched by the employer.

Q: What is a vesting schedule?

A vesting schedule determines how much and when an employee can keep the employer's contribution to their 401K. It encourages employee retention while gradually granting ownership of the employer's match.

Q: How should I invest my 401K?

The ideal investment strategy depends on factors like age and goals. The Blooom software can provide personalized advice on adjusting investments and uncover hidden fees.

Q: Is it advisable to borrow from a 401K?

Borrowing from a 401K should be avoided because it comes with high costs, such as paying back with after-tax dollars, potential missed benefits, penalties, and taxes for non-repayment or job change.

Q: How much should I have saved in my 401K?

Average 401K balances by age can provide a benchmark, but most people are under-invested for retirement. It is recommended to set personalized savings goals based on individual expenses and retirement plans.

Q: How can I get back on track with my 401K savings?

Knowing specific retirement goals and finding motivation to save are crucial. Additionally, monitoring hidden fees and taking advantage of catch-up contributions after turning 50 can help boost retirement savings.

Summary & Key Takeaways

• The speaker emphasizes the importance of investing in a 401K plan and highlights the benefits of employer matches and pre-tax contributions.

• He addresses common questions about 401Ks, including the definition of a 401K, vesting schedules, investment strategies, borrowing from a 401K, and savings targets.

• The speaker recommends using the Blooom software for a free 401K analysis to optimize investments and reduce hidden fees.