Episode 8: Navigating 401(k) Decisions: How to Make the Most of Your Retirement Savings
In this episode of the Road Rules for Retirement show, Mark Fried covers essential topics that are crucial for a secure and fulfilling retirement. They start by discussing the importance of involving both spouses in the retirement planning process, emphasizing how differing perspectives between partners can impact their financial future. Mark highlights the unique challenges women face in retirement due to their longer life expectancy, advocating for women-specific financial planning to ensure their security.
The episode also delves into the history and evolution of 401(k) plans, explaining how they became a primary tool for retirement savings. Mark offers practical advice on maximizing 401(k) contributions, including taking full advantage of company matches and exploring the benefits of the Roth option. He stresses the importance of regularly rebalancing your 401(k) portfolio to keep your investments aligned with your retirement goals.
Additionally, the pros and cons of target date funds are examined, with a cautionary note on understanding these investments before diving in. For those with multiple 401(k) accounts from past jobs, Mark advises consolidating them into a single IRA to maintain control and optimize your retirement strategy. He also discusses how 401(k)s have replaced traditional pensions and the importance of translating your savings into a reliable income stream for retirement.
The episode further explores the significance of working with a fiduciary, someone legally obligated to act in your best interest, and provides tips on selecting a financial advisor who aligns with your values and goals. Overall, this episode offers valuable insights for anyone looking to make informed decisions about their retirement and ensure their financial security in the years to come.
