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Almost every financial adviser recommends having a 401(k)… but are they the surefire solution they’re made out to be?
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Two Cents was created by Katie Graham, Andrew Matthews, Philip Olson CFP® and Julia Lorenz-Olson and is brought to you by PBS Digital Studios. We love dropping some knowledge on all things personal finance and helping you make better money decisions.
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Two Cents is hosted by Philip Olson, CFP® and Julia Lorenz-Olson
Directors: Katie Graham & Andrew Matthews
Written by: Philip Olson, CFP® and Julia Lorenz-Olson
Executive Producer: Amanda Fox
Produced by: Katie Graham
Edited & Animated by: Dano Johnson
Images by: Shutterstock
Music by: APM…(read more)
LEARN MORE ABOUT: 401k Plans
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HOW TO INVEST IN SILVER: Silver IRA Investing
No, we're not back in the studio yet! This is an episode we shot before the pandemic and put on the back burner to address more imminent topics… still relevant, though!
There are life insurance products out there that can help people prepare for retirement without a pension plan.
except those fees and employer doesn't match any… so better pick my own provider?
My pension is public but works for management .
ONLY EXECS GET EMPLOYER MATCH
The 401k is terrible for Americans but we pretty much have to use them.
401k contributions should not be tax deferred, they should be tax FREE – forever.
Damn you still have to pay tax on money you already earn in order to retire damn scam
Can you guys do a video on IRA I would love that!!!!
Never would have known about Vesting if it weren’t for you guys. I’m getting my first job out of college and between offers with the same match one offer had a 3 year vesting schedule while another had immediate vesting. I had to explicitly ask cuz that info wasn’t even on the benefits pamphlet, and I’m so glad I did!
Where I live regular pension funds are paid into by both employees and employers but are guaranteed up to 30% by the government. Government employers and certain unions mandate having a pension fund and often provide special rates. On top of that, the big insurance/pension companies provide various other pension/savings funds that are not employer-matched, for example something called a Provident Fund which also received tax benefits but you're fined if you withdraw it before retirement.
I have never had a few or vesting period through an employer. My stock options all need to vest over 5 years
That 13% graph is just bad
So you are suggesting 401K hahah, it's hilarious. Invest in BTC, ETH and Silver, fiat and fiat based products are stink. Do you know the real inflation per year.
I was with a company for 6 months when they announced that they were terminating their pension for new employees. I was a little heartbroken as having a pension was a first for me. To make up for this, the company made additional contributions to our 401K above the normal for the next three years so I thought that was a pretty cool thing to do, especially when you consider they didn't have to.
Crunchy
The darling of investors is roth according to propublica
My new job automatically started putting money into a 401(k) for me, or at least will start next month (the month after being at the job for at least 30 days) but my match is only half of what I put in and I won’t be vested for 3 years. It’s still better than nothing. The only employers around here that give pensions that I can think of are the military and the church. I definitely want to start saving on my own as well once I finish school.
This carries way too much water for pensions.
Pensions sucked, were hopelessly unsustainable, and they his market risk. They promised a steady check in retirement, but no one can can guarantee the future. In practice they were backed by market based funds that would/could collapse alongside defined benefit plans.
There is also the issue that some 401Ks only offer really lousy investment funds. When you change your employer, make sure you are getting a rollover check and open rollover IRA with Fidelity or something like that. Then you can pick whatever stocks or funds you want and trade tax-free. Simplest case: just buy some low-fee index funds and don't touch it until you retire.
Okay I'm from India and I'm guessing this 401(k) is equivalent of "PF" or "EPF" in India. Anyone? And idk if pensions are even a thing here expect in the govt sector
"Loyalty"! I seen good hard working people get fire days before retirement.
“Vesting time” is a big surprise to me. Very disappointed, as I’m changing jobs every year or so