401(k) Myths: Debunking Max Out Strategies for Financial Success

Aug 2

Should you always max out your 401(k)? This is a big question that comes up often, so in this episode, Brad and Matt dive into this prevalent financial myth. Shedding light on five reasons why maximizing your 401(k) may not always be the best strategy, they emphasize the issue of liquidity and why building an emergency fund outside of the 401(k) becomes essential for financial security.

Listen in to learn the importance of considering the investment selection within a 401(k). Contrary to popular belief, 401(k)s are not free, and participants often bear the fees, making them less cost-effective compared to other investment options. You’ll hear how retirement age plays a role in decision-making, why tax diversification is key in financial planning, and what becomes crucial for achieving a well-balanced tax strategy.

What You’ll Learn:

The importance of having an emergency fund.
Why you should not rely on your 401(k) as an emergency fund.
The importance of understanding your investment selections in your 401(k).
How the age that you want to retire may impact whether you should max out your 401(k).
The benefit of understanding your best investment options.
Why it is good to have tax diversification.

Ideas Worth Sharing:

“If you’re looking to continue to save money, it might be better somewhere besides your 401(k) just because you get a better selection from an investment perspective.” - Fiat Wealth Management
“401(k)s are typically not the cheapest way to invest.” - Fiat Wealth Management
“It is good to have tax diversification.” - Fiat Wealth Management