The $277,000+ You Give Away With Your 401k‼️

(don’t forget to checkout the video of this blog too)

If you make $90,000/year and are an average saver, you will giveaway more than $277,000 in fees through your 401k in your lifetime.

That’s more than a quarter million dollars…

A truly astonishing amount of money.

And imagine if you make more than that OR are a much better saver than average…

Now you likely you’re ok having some of your money within a 401k… even with the outrageous fees that you pay.

Let me explain.

If your employer matches your contribution, you should take full advantage of that because that is ✨ free money ✨ (you’re happy to pay a 3–4% fee on a 100% return, shoot you would even be ok with a 50% fee on free money).

But beyond any free money being contributed on your behalf, there really aren’t a lot of pros to saving inside of your 401k account.

The only other reason you might utilize your 401k is for a tax-deduction.

If you’re a high income-earner, you might be looking for ways to reduce your taxable income, so you aren’t stuck paying income taxes in the highest marginal tax bracket! 😧

One way great way reduce your taxable income is to make a tax-deductible contribution to your 401k (and in some situations this does make sense).

But be careful‼️

Having more than $350,000 in your 401k (or other taxable retirement accounts) can put you at risk of a hefty tax bill when you least amount of deductions to offset it with (hint: retirement)‼️

If you can keep the balance of your 401k at approximately $350,000 (or less) you can utilize your standard deduction to offset the required minimums that you are forced to take out of your 401k, allowing you to essentially pull all the money out of your 401k completely tax-free (something I talk about quite frequently)!😏

If a tax-free retirement isn’t your goal, it should be, and having too much money in a 401k (which most people do) puts you at the mercy of the government at retirement.

Meaning you don’t really know how much money you have to retire with because they can easily increase tax rates and wipe out a huge chunk of your retirement income.

This is one of the biggest risks that most retirees face that could cause them to outlive their retirement savings (retirees number 1 fear).

That’s why it’s so important to start planning early; start working with a retirement income and tax planner (like me) to see if a Roth Conversion or the strategic repositioning of taxable retirement assets makes sense for you now (or at some point in the future).

The earlier you start analyzing how you can best minimize (and hopefully eliminate) your tax liability in retirement, the better.

Eliminating your tax liability in retirement is a proven way to extend the number of years your retirement income will last.

Repositioning assets correctly can also allow you to collect your social security check completely tax-free as well…

But, you have to start planning now.

Utilize all of the tools available to you to secure your financial future as tax-efficiently as possible: your 401k, your company pension, Roth IRA’s, cash-value life insurance, long-term care, annuities, and your social security income.

They all serve their purpose at different stages of your retirement planning journey, but don’t allow excessive fees and the unknown tax obligation of a 401k to become a huge hindrance to you in retirement.

Use your 401k effectively for dollars being matched and for tax-deductions, but beyond that, start exploring other financial vehicles to supplement your retirement savings.

Let’s chat.