Welcome to the Money Wisdom Podcast where Joel Johnson, CFP® of Johnson Brunetti, reviews retirement and investment topics weekly. Let’s get started…
Do you have any old 401(k) accounts from a former employer that you haven’t touched since you left? Everyone’s situation is different, but it’s good to look at the benefits of a rollover and determine if a 401(k) rollover is right for you. We’ll explain everything about that transition and its benefits. Plus, we’ll explain why simplicity is so important when it comes to investing.
Want to save time? Click the timestamps below to jump ahead to specific spots in the episode.
What You’ll Learn:
Many companies offer 401(k) accounts and it’s a great benefit for employees, but what happens to those accounts after you change jobs? For most people, the investments never change and the account just stays parked for years.
While this won’t hurt your retirement planning, especially if you check in on that old 401(k) to see how your investments are doing, why wouldn’t you want more flexibility and control with your money? That’s what you can get if you roll over that 401(k) into an IRA. Once you move that money, a wide variety of investments become available to you along with some other benefits.
In today’s episode of Money Wisdom, Joel Johnson walks you through the rollover process and explains why it provides you with much more flexibility and control. You might not realize it, but your 401(k) might even have the option to rollover even if you’re still an employee of that company. Plus, we’ll talk about the tax implications of making this move.
The second part of the show will focus on helping you simplify your portfolio. One of the most common problems we see from people is they’ve made investing too complicated. Sometimes that’s a result of your advisor, but there are some easy steps you can follow to help make life easier.
Here’s the list of main topics you’ll hear on this episode of the Money Wisdom podcast (Just click on the timestamp to jump to the specific clip):
[0:45] – Why we’re talking about 401(k) rollovers and simplicity.
[2:08] – What are the main benefits of taking that old 401(k) and rolling it over into an IRA.
[2:58] – Flexibility gives you more investment choices inside an IRA.
[3:20] – Rolling it over gives you the option to work with an advisor if you choose to.
[4:06] – There might be hidden fees inside your 401(k).
[4:36] – Are there any tax implications to rolling over your 401(k)?
[6:30] – You don’t have to leave your company to have the option to roll it over.
[7:43] – How to determine what type of investments we want to make in an IRA.
[9:12] – Whatever decision you make, it’s still important that you have a plan.
[11:15] – Why do advisors make it more difficult for clients than it needs to be?
[13:02] – What steps can you take in order to simplify your retirement?
[13:21] – Step 1: Can you consolidate your accounts?
[15:11] – Step 2: Understand what you’re invested in.
[17:10] – Step 3: Classify your investments into these four categories.
“One of the things I notice is wealthy people, very successful people have an amazing knack of keeping things simple. People that are constantly worried about money, constantly trying to figure out am I getting ripped off and all that have an amazing knack for making things way too complicated.”– Joel Johnson, Money Wisdom Podcast
3 Related Items & Resources:
- What is the Money Map?
- Financial Wisdom from Will Rodgers + Mailbag Questions
- Taking Complicated Financial Topics and Making Them Simple
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