▸▸▸Subscribe so you don’t miss an episode:
Listen to us on Spotify:
Listen to us on Apple Podcast:
▸▸▸Send us your questions:
In this episode, we answer Allison’ and Greg’s question about rolling over their 401k from their previous employer to an IRA with Fidelity. We talk about the different options that they have and potential investments to consider when doing a roll-over.
▸▸▸Enroll in our 365 Days to F.I.R.E. Program: Take part in our 365 Days to F.I.R.E. Program and develop your financial independence plan (including your stock investing plan and real estate investing plan) AND get your plans reviewed by us, attend 12 Live Q&As with us, complete daily F.I.R.E. related tasks, get assigned to a small accountability group, attend our meet-ups in Portugal, participate in our FIRE related book club . . . and more!
▸▸▸Enroll in our Stock Market Investing Course for Financial Independence and Retiring Early: Enroll in our new 21 module, 4-plus hour stock market investing course with more than 30 handouts of summary notes, homework assignments, and resources. Learn how to research and select investments, how to determine your asset allocation, how to rebalance your portfolio, how to optimize your investments for tax purposes, how to automate your investments, and much more (including a 19-page Investment Plan to work on)!
▸▸▸Enroll in our FIRE Master Class: This FIRE Master Class is designed for people interested in pursuing financial independence and retiring early. In the Master Class, we explain how to live off of your investments during early retirement; how to withdraw money from your investment accounts to support your living expenses during retirement; how to calculate your FIRE number; new and creative ways that you can save money; new side hustles for making money; how to invest in the stock market and in real estate; we discuss healthcare options in retirement . . . and MORE!
▸▸▸Enroll in our How to Move to Portugal Course: A Step-By-Step Course to Relocating and Living in Portugal: This course is designed for people interested in moving to Portugal. In the course, we explain the visa process, the documents you need to submit for your application, and the step-by-step process that we took to obtain our visas; we explain the residency permit process and how we obtained our residence permit here in Portugal; we explain the process for buying and renting a house in Portugal; we discuss healthcare, school options, and setting up NIFs, we explain taxes here in Portugal, and MORE!
▸▸▸Follow us on Instagram: …(read more)
LEARN MORE ABOUT: 401k Plans
REVEALED: Best Investment During Inflation
HOW TO INVEST IN GOLD: Gold IRA Investing
HOW TO INVEST IN SILVER: Silver IRA Investing
My 401K Is Losing Money – Should I Roll It Over? – Ep. 18
The stock market can be a rollercoaster ride of ups and downs, and unfortunately, even the most well-managed portfolios can experience losses from time to time. If you find yourself in a situation where your 401K is losing money, you might be contemplating whether it’s time to roll it over into a different plan. Episode 18 of our financial education series will shed some light on the matter.
First and foremost, it’s important to understand that losing money in your 401K is common and not necessarily a cause for alarm. The stock market undergoes cycles, and it’s natural for investments to experience periods of decline. However, it’s crucial to evaluate the situation before making any hasty decisions.
Before considering a rollover, take a step back and analyze the reasons behind the losses. Is the entire market experiencing a downturn? Or are the losses specific to certain investments within your portfolio? Understanding the root cause will help you make an informed decision rather than succumbing to panic.
Once you have assessed the situation, here are a few factors to consider before rolling over your 401K:
1. Time horizon and retirement goals: When do you plan to retire? If you’re many years away from retirement, short-term losses shouldn’t be a primary concern. The market tends to recover in the long run, and this can give your investments time to rebound.
2. Investment strategy: Evaluate your investment strategy and determine if it is aligned with your risk tolerance. If you are uncomfortable with short-term market volatility, it might be worthwhile to reassess your investment choices within the 401K. A financial advisor can provide valuable guidance in this regard.
3. Employer match and benefits: If your employer offers a match on your 401K contributions, be sure to consider the impact of a rollover on this benefit. Rolling over your account could mean losing out on future matching contributions or additional employer benefits associated with the plan.
4. Investment options and fees: Evaluate the investment options and associated fees within your current 401K plan. Consider rollover options that offer a wider range of investment choices or lower fees, which could positively impact your long-term returns.
5. Expert advice: Consulting with a financial advisor or retirement planner can be highly beneficial when it comes to making important decisions about your retirement savings. They can provide personalized guidance based on your unique circumstances and help you navigate the complexities of rolling over your 401K.
Ultimately, the decision to roll over your 401K should be based on a thorough evaluation of your financial goals, risk tolerance, and the overall market conditions. While it can be disheartening to witness losses in your retirement savings, it’s crucial to remember that the stock market is inherently volatile. Smart investment strategies coupled with a long-term perspective are more likely to bring positive results in the end.
Remember, Episode 18 of our financial education series serves as a general guide and does not constitute personalized financial advice. It’s always recommended to consult with a financial professional before making any significant decisions regarding your retirement savings.
Hey guys, very interested conversation. I have a 401K, can I open a Roth IRA with that money? Thanks
Do you guys ever talk about self directed IRAs? They allow so many other alternative retirement investments options not subject to stock market volitility. Are you familiar with The IRA Club?
Very informative. Thank you. Do you have a video about SEP IRA?
You can buy vanguard stocks through Charles Schwab, is there any advantage of buying vanguard stocks direct from vanguard?
Guys what about annuities? As far as I know we can roll over and some insurance companies give bonuses along the way. I am curious . Thank you
I did a rollover. The form included identifying the funds to take from one, and what I was choosing to do o with it. I rolled it over in the same transaction.
Stay on the path. It has worked for me
This was a really good question. I too may have to do this in the future and the information you’ll gave was very helpful. It definitely is a lot to think about.
You two are ALWAYS helpful.
Thank you
I'm curious about your take on the saying the market is designed to fool most people most of the time. My opinion as a small person is, mutual fund or ETF banking era ended back around 2008. About 80% of average people lose money in the market. For average people, the market is designed to keep your money in the market. It's not designed to make you money.
Roth conversions from Trad IRA has tax consequences. Be sure to check with accountant before doing one due to the conversion can add to your taxable income. Yes, please seek an accountant on Roth conversion.
I am losing some money in 401k but still invest $1,400 a month and the market has some positive signs for this quarter.
❤ Can I do HSA in Puerto Rico or overseas?
Always good advice, I am close to retire age and the 401k is down to 23% ouch!!!!!! Since I hace 6 years to go, I guess I should sit and watch to recuperate and get back to better days. Thanks for your videos.
Keep buying, we are at bottom
There is also the rule of 55 for people who leave their company and are 55 years old. They can take distributions from the 401k without a 10% penalty.
Can you rollover to an annuity account ?
I heard about buying rental properties using your 401k. Do you recommend that and how does it work?
My boyfriend just got access to a 457b (he’s new to investing) how can I mathematically decide if it would be better for him to put a Roth designation on this or not? He is 30 and will also have a pension and is a firefighter
Do you have a guide on how to open custodian accounts for children?
This is slightly unrelated, but do you guys have IUL? I'm trying to do research on it and am having a hard time finding much info. Thanks!
Your new glasses look cool!
The only problem with roll overs when the market is low is is that if you can’t do an in-kind transfer you risk having your money out of the market when the correction occurs.
My previous employer switched brokerage firms during a dip and that meant I had no control over my investments during a volatile time.
So definitely roll over your money to a brokerage firm where you have the power to manage your money.
Whether or not you do it now … you should decide based on your confidence of having access to your old employer 401k vs the estimated time to roll it over.
She could think about a rollover to a Roth IRA. It's a big tax hit, but withdrawals are tax free after age 59.5. Otherwise, rollover to regular IRA. SCHD is also a good choice. Only high quality companies that pay dividends are in that ETF. The 5yr Roth Conversion is a great idea too.