Category - 401k Center

1
Massive 401(k) Losses? Not Really.
2
The Roth 401(k) Plan
3
Protect 401(k) From Stock Crash With Investment Grade Bonds
4
What If My Employer Doesn’t Match My 401(k) Contributions?
5
Who Is On The Hook For Decisions Made In Your 401(k)

Massive 401(k) Losses? Not Really.

A client asked me to look over his 401(k) portfolio. He was quite disturbed over the losses in his account. He agreed to pay me my hourly rate for one hour just to look it over and give him my thoughts on the matter. I agreed since it was a small amount of money with just a few holdings that I helped him put together years ago. I want to share with you my mental dialogue as I go through his statement. For privacy reasons, I can’t share screenshots so follow me on this journey.

First of all I …

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The Roth 401(k) Plan

Many hard working Americans have access to a defined contribution retirement plan called a 401(k). Essentially, a 401(k) is a retirement savings vehicle provided by employers to their employees as a means for the employee to save for retirement, often with the employer providing a “match” of the employee’s contributions up to a certain percentage.

As of January of 2006 (a result of EGTRRA 2001), employers can now offer employees the Roth 401(k) as part of their 401(k) plan. Before we get into the advantages of the Roth 401(k), let’s briefly look at how the regular 401(k) works. Employees that …

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Protect 401(k) From Stock Crash With Investment Grade Bonds

Examine your 401k holdings to see if they are investment grade bonds. The way to do this is to first find the five digit ticker symbol for the mutual fund choices for bond mutual funds offered in the 401k. Then Google the individual bond mutual funds and find out the name of the mutual fund family and go to the fund family’s website, then go to the web page for that particular bond mutual fund. The mutual fund company’s website should say what percentage of the fund’s holdings are in a certain credit grade and possibly give a weighted average …

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What If My Employer Doesn’t Match My 401(k) Contributions?

Should I continue to make contributions to my 401(k)? Is there something else that I should make contributions to instead?

As you may recall, the recommended order for retirement savings contributions is normally as follows:

  • 401(k) contributions up to the amount that the company matches
  • max out your Roth or traditional IRA contributions for the year (as applicable)
  • max out the remainder of the available 401(k) contributions
  • make taxable investment contributions

In the situation where your employer doesn’t match your contributions to a 401(k) plan, the order of contributions is more appropriate if you bump up the Roth or traditional …

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Who Is On The Hook For Decisions Made In Your 401(k)

Recently Wal-Mart agreed to pay $3.5 million to settle a lawsuit filed by its employees claiming that the country’s largest employer failed to properly supervise the company 401(k). There have been other similar suits and more will come.

Most companies can do a better job in supervising the company 401(k) and the motivation to do so needs to start at the top with the owner of the company or the Board of Directors.

If you are a business owner, on the Board of Directors or serve on the Plan Investment Committee, follow the line of questions from a “hypothetical deposition” …

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