We don’t have very much experience with 401k’s, but Lauren’s work just set one up. I was amazed how horrible our options were. Most funds had a front end load of 5% and the manager wanted 1% of our wealth per year for his “advice.”
Unfortunately, despite the lack of options 401(k)’s are usually worth it. Between a company match and tax advantages you’ll probably recover a lot of those fees. It’s just a shame we have to pick the lesser of two evils.
The United Kingdom is phasing in a new law that requires business owners to automatically enroll their employees in a retirement plan. Do you think there should be something similar in the United States?
In this video we discuss the pros and cons of auto-enrollment, the longevity of social security, and the psychological barriers of investing in the stock market.
Ever wonder how you can access your retirement accounts without paying the 10% penalty? In this video we share our plan for avoiding IRA and 401k penalties by setting up a Roth Conversion Ladder.
Credit is due to the MadFientist who introduced us to the idea. Basically you rollover your old 401k into a traditional IRA, then convert that to a Roth IRA. The converted funds are considered “income” and therefore “contributions” so you may withdraw them at any time (after 5 years has passed) without tax or penalty.