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The 401k is considered the holy grail of investments – the pros of the 401k are obvious, but do you know the costs of investing in your 401k – let’s discuss.
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The TRUTH About Your 401(k) That No One Tells You
0:10 – What’s the best way to plan for your future?
0:27 – For the majority of people investing is investing the 401k
0:56 – Why does your 401(k) exist
1:30 – Your company was on the hook for your retirement with pensions
2:22 – The benefits of the 401k
2:53 – The cost of your 401(k)
3:26 – What the average American pays in 401(k) fees
4:18 – The risk of investing in your 401(k)
5:23 – The tax benefits or costs of investing in the 401k
6:34 – The flaws of 401k being a tax shield
8:00 – Tax rates will greatly affect your 401k

What Is The Minority Mindset?
The Minority Mindset has nothing to do with the way you look or what kind of family you’re from. It’s a mindset.

Give the majority $200 and they will come back with a pair of shoes. Give the minority $200 they will come back with $2,000.

Think from the mindset of a consumer and be the provider, that’s the Minority Mindset. Don’t be the majority. #MIH #ThinkMinority #FinancialEducation

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LEARN MORE ABOUT: 401k Plans

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401(k) plans have become an increasingly popular option for retirement savings in the United States. According to the Investment Company Institute, Americans held $6.2 trillion in 401(k) accounts as of June 2020. However, there are critical truths about 401(k) plans that many people are unaware of. This article will explore the essential facts about 401(k) accounts and how they affect our retirement savings.

First, 401(k) plans may have high fees that cut into our savings. These fees include administration fees, investment management fees, and expense ratios, among others. According to the U.S. Department of Labor, a 1% difference in fees could reduce an account balance by 28% over 35 years of saving. Therefore, it is crucial to research and compare fees before choosing a 401(k) plan.

Second, the investment options for 401(k) plans are often limited. In most cases, the plan sponsor chooses the investment options available in the plan, which may not be suitable for all employees. There may be limited diversity in asset allocation, meaning that the investments may not be distributed equally between stocks, bonds, and cash.

Third, 401(k) plans may have withdrawal penalties. While these plans are designed for retirement savings, unforeseen circumstances may require someone to withdraw money before reaching retirement age. In such cases, a 10% penalty may apply to the withdrawal, which can significantly reduce the account balance.

Fourth, 401(k) plans may not provide enough retirement income for some people. According to the Employee Benefit Research Institute, more than one in four baby boomers who participated in a 401(k) plan are projected to run out of money in their retirement years. One reason for this is that many employees do not contribute enough to their plans to achieve a comfortable retirement income.

Finally, 401(k) plans may have tax implications. Contributions to these plans are typically tax-deductible, meaning that they reduce the taxable income. However, the withdrawal of funds in retirement is subject to income tax, which could result in higher taxes than expected for some individuals.

In conclusion, 401(k) plans are an essential tool for retirement savings, but they also have pitfalls. High fees, limited investment options, withdrawal penalties, inadequate retirement income, and tax implications are some of the truths about 401(k) plans that no one tells you. Therefore, it is crucial to understand these facts and take appropriate measures to mitigate their effects. This includes researching and comparing fees, contributing enough to the plan, diversifying investments, and consulting a financial advisor to help make informed decisions.