Don’t Make This HUGE 401(k) Mistake!

Money Guy Show

Brian Preston, CPA, CFP®, PFS and Bo Hanson, CFA, CFP® | Fee-Only Fiduciary Advisors

Education, Investing, Business

4.7 • 3.1K Ratings

🗓️ 1 March 2023

⏱️ 28 minutes

🔗️ Recording | iTunes | RSS

🧾️ Download transcript

Summary

Americans are making a HUGE mistake in their 401(k) that could cost them thousands by retirement. We’ll talk about why this is happening and how you can avoid making the same mistake in this Q&A episode! Watch more exclusive content only on YouTube! Visit our website - Get our FREE financial resources - Check out our course, Know Your Number! - Sign up for our Financial Order of Operations course - Get easy to understand answers to your financial questions Follow us on social media! -Instagram -Twitter -Facebook -TikTok Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	Listen up, do not make this huge 401k mistake.
0:11.2	Brunt, I am excited to talk about how we can fix a giant problem that's going on right now.
0:18.6	We are seeing right now Americans making a huge, huge mistake inside their 401ks that can have
0:26.0	drastic long-term impacts. And I hope that right now we can be the voice of reason to change the
0:30.9	trajectory. What I think is sad is, I look, I recognize anybody who's out there on TikTok,
0:36.4	you see all the life insurance folks and everybody else telling you 401ks is a joke, but here's the
0:40.8	reality. Your 401k is likely to be the first account that's going to cross seven figures.
0:48.1	You know what's going to really turbo charge that free money from your employer?
0:52.4	Absolutely. So what's going on right now? What's some context? Well, we know that right now the
0:57.0	overall savings rate in the United States has plummeted. We reached near all time highs when we
1:02.6	came through the COVID downturn and we thought that perhaps it was behavioral. Perhaps people were
1:07.1	finally starting to take their financial matter seriously, but that's not the case. It just turned
1:11.6	out that Americans were cooped up. They couldn't spend any more money. So their savings rate went
1:15.6	up. And now it is at an abysmal 3.4% average overall savings rate in the US, which is awful. It's
1:24.0	one of the lowest that we've seen in the last six or seven years. Yeah, I mean, to think that the
1:28.6	typical American is only saving an eighth of what we kind of give God inside. I know for 20
1:34.0	somethings that's very aspirational and also know in this uncertain time in the economy that this
1:40.3	is scary. However, knowing that we came through the pandemic and we had so much kind of being
1:47.7	given to everybody to help you make it through the uncertainty of the world, it is sad to me to see
1:53.2	the savings rate be so high at historic highs and now being so low. And I know a lot of that is
1:58.4	struggling with economic stuff. But still at the end of the day, we've got to figure out how do we
2:03.4	get this beyond 10% beyond 15% up to the 20 to 25%. We recommend because 3% this is I think if we
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