A 401k will most likely be the largest investment account you own throughout your lifetime. But investing in a 401k can get a little confusing because there’s so much to learn. The worst part is that your employer doesn’t teach you what to do. In this video, I break down everything you need to know about investing in your 401k. We’ll cover the different types of accounts, your investment option, and many more things as well.
Roth 401k Vs. Traditional 401k:
01:10 – 401k Advantages
02:52 – 401k Defined
07:36 – Employer Match
09:10 – Choosing A Brokerage
09:29 – How To Invest In A 401k
10:09 – How Much To Invest
11:11 – Investment Options
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Disclaimer: This video is for entertainment purposes only. Everyone’s situation is different so do your own research before making any decisions with your money. If you need help then contact a Certified Financial Fiduciary before trying anything that is mentioned in this video. I prefer a Fiduciary financial advisor that charges an hourly fee as opposed to an ongoing fee based on a % of your portfolio. Always remember that incentives determine the type of advice they give you so one that charges an hourly fee is less likely to be problematic.
#401k #investing #stockmarket…(read more)
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If you dream of becoming a millionaire in the future, 401k investing is a great place to start. 401k plans are an excellent way to save for retirement, but they can also help you grow your wealth over time. Here’s a beginner’s guide to 401k investing.
What is a 401k Plan?
A 401k plan is a retirement savings plan that allows employees to save money on a tax-advantaged basis. With a traditional 401k plan, you make contributions before taxes are taken out of your paycheck. These contributions are then invested in the stock market, bonds, or other mutual funds, and the earnings grow tax-free until you withdraw money from the account. If you withdraw money before the age of 59 1/2, you will likely have to pay a penalty.
How to Get Started with 401k Investing
If your employer offers a 401k plan, it’s easy to get started. Your employer will provide information on how to enroll in the plan and how to choose your investments. You’ll likely be given a list of investment options, such as mutual funds or target-date funds, to choose from. It’s important to do your research and choose investments that are in line with your risk tolerance and retirement goals.
If your employer doesn’t offer a 401k plan, you can still save for retirement by opening a traditional IRA or Roth IRA. These accounts offer similar tax advantages as a 401k plan, but there are different rules and contribution limits.
Benefits of 401k Investing
There are several benefits to investing in a 401k plan. One of the most significant benefits is the tax advantages. Your contributions to a traditional 401k plan are tax-deductible, which means you’ll pay less in taxes this year. Plus, the earnings on your investments grow tax-free until you withdraw the money in retirement. This can significantly increase your wealth over time.
Another benefit of investing in a 401k plan is that your employer may offer matching contributions. For example, your employer may offer to match 50% of your contributions up to a certain limit. This is essentially “free money” that can help boost your retirement savings.
Finally, 401k plans offer a simple and convenient way to save for retirement. Contributions are automatically deducted from your paycheck, so you don’t have to remember to make a contribution each month.
Conclusion
Investing in a 401k plan is an excellent way to save for retirement and grow your wealth over time. With tax advantages, matching contributions, and a range of investment options, a 401k plan is an excellent investment choice for beginners and experienced investors alike. If you want to become a future millionaire, start investing in a 401k plan today!
I threw 100% of my first check this year to my 401k. I just wanna max it out quick. Because I never know where I'm gonna be tomorrow, next month, etc. If I spread it out throughout the year and I end up not working anymore, I'll lose the opportunity of having a retirement fund.
If you are just starting up with little money but you know you want to invest for the long term and not touch your investments, would you recommend having the same investments in your taxable account as your Roth IRA?(looking to have stocks/bonds/etfs)
Consider if vesting will affect your 401k if you leave a job..I left a job and didnt realize i wasnt 100% vested. A chunk that was the employer match was yanked.
Its been great watching your growth at one point you had less subs than me. After years of procrastinating I’ve started investing and side hustling. What was your motivation for the channel?
I don't understand something about FIRE. How can you live off 4% of your portfolio if all your money is tied up in a 401(K), Roth IRA and other options that require you to be 59.5 before you can reach your money? It sounds like I'll be rich when I'm 60, but not before.
Poll: Spy red week?
Best drinking game ever: drink every time Jarrad says "401K". 😉
Nice video Jarrad! I’m in the process of saving for a wedding and down payment on a house but after those are taken care of I’ll be maxing our the 401k. I read that your 95% allocated to VTI? Great choice! My 401k is with fidelity so I’m in the fidelity equivalent. What are your thoughts on international allocation? I keep reading how important it is for diversification purposes and how it can actually help lessen the volatility in your portfolio compared to just being 100% US stocks. Thanks!
Thxs Jarrad! I'll' ck out that blooom link!! What are your thoughts/opinions on crypto/Bitcoin? Seems we're moving towards a cashless society and going digital. Plus I understand we may be going bak to the gold standard… Appreciate your insight!! 🙂
FYI there is a 3rd 401k, After-Tax 401k. It is very unique.
For a Roth, do you still have to pay tax on the interest earned?
My crap job made it more difficult to take advantage of the 401k. First they told me 6% and vested in 5 years then they said 4% 6 years vested. I declined since I won't be at this job to long. So I've been speculating with 10% of my money.
So investing in 401k can reduce your taxable income legally.
Hey man this is a good video. I tried to get a 401k at my work a while ago for the match but HR said I was't old enough to have there 401k sense I am only 20. Also I don't know if there 401k has the rule of the match is't yours until you have been there long enough but even if I was 21 yet I don't think I would make the account sense I hate my job so much and I hope to get a different job soon and I am taking a leave of absence so hopefully I can find a job I am treated half way decently at and make more at so I can save more. But when the time comes hopeful I can get a 401k to go along with my other accounts at a job I can stand and make more money at.