Ep 16: Answers to Common 401K QuestionsInvesting
On This Episode
Are 401K loans a good idea? What about rollovers? How much should I contribute? Get answers to these and other common 401K questions.
Today’s Saving With Silverman podcast is all about 401Ks and some common questions you may have.
Should you take out a 401K loan? It’s typically a bad idea and should only be used as a last resort. The most you can take is $50,000, and the money you owe back is all taxable.
“I tend to tell people to be careful when you take out those kinds of loans,” said Mark.
Loans are not a good idea, but 401K rollovers are. When you leave a company, you can roll the money into a new IRA so you can control the fees, investments and risks. Also, it’s no longer tied to your old employer.
How much should you contribute to a 401K? At least the company match. If you don’t, that’s free money you’re giving away.
“You’re never going to have too much money in there,” said Mark. “I’ve never had somebody come to me and say, ‘We have too much money. I wish I wouldn't have saved as much.’ However, we’ve had a lot of people who wish they would have saved more.”
When it comes to 401K Roth vs. traditional, we typically recommend a Roth. You’ll be better off in the long run because you can take the money out tax free down the road.
Listen to the entire episode or click on the timestamps below to skip to a particular segment.
I’ve never had somebody come to me and say, ‘We have too much money. I wish I wouldn't have saved as much.'
- Mark Silverman, CFP®
Let’s get rolling with the first episode and you can use the timestamps below to skip around to specific topics.
0:40 – 401K advice from company reps
1:47 – 401K loans
2:46 – 401K rollovers
3:49 – Target date funds
4:39 – How much should I contribute?
5:54 – Roth vs. Traditional
7:06 – Contact Mark
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