The Capitalist Investor - Episode 225

The latest episode of “The Capitalist Investor” podcast with hosts Luke and Tony dove into some critical financial topics, focusing mainly on common 401(k) mistakes that investors make. Here are the five hot topics they discussed that are poised to help listeners navigate their retirement planning:

1.New Show Structure for Concise Financial Tips:

Tony introduced a new format for the podcast, aiming for shorter, more frequent episodes. Instead of lengthy discussions, the episodes will be about five to seven minutes long and released three times a week, targeting Monday, Wednesday, and Thursday releases. This change is designed to fit the listeners’ busy schedules better, allowing for quick, digestible insights into the financial market and investment strategies.

2. Acknowledging 401(k) Fees and Limited Investment Options:

A significant portion of the discussion revolved around the two main challenges of 401(k) plans: limited investment choices and overlooked fees. Tony highlighted that most 401(k) plans have an average fee of around 1%, which often goes unnoticed by participants. They advocate for more transparency in these fees and consideration of investment options, potentially through a brokerage link to expand choices.

3. The Importance of Employer Match Contributions:

The hosts stressed the critical mistake of not contributing enough to receive the full employer match in a 401(k) plan. This employer match is often viewed as “free money” that can substantially enhance one’s retirement savings, and failing to take full advantage of it is a common and costly error.

4. Leveraging In-Service Distributions for Investment Freedom:

For participants over the age of 59 and a half, in-service distributions allow for the movement of funds from a 401(k) to an IRA without closing the original 401(k) account. This can provide a broader range of investment options and eliminate some of the administrative fees associated with 401(k) plans.

5. The Peril of Leaving Old 401(k) Plans with Previous Employers:

Tony conveyed the disadvantage of leaving old 401(k) accounts with previous employers, comparing it to leaving personal belongings behind when moving houses. The hosts recommend consolidating these plans into a current employer’s 401(k) or rolling them into an IRA. This strategy not only simplifies one’s finances but could potentially reduce fees and provide more control over the investments.

Keep Listening to The Capitalist Investor:
Episode 15:
Spending Strategies in a Bear Market, Ep #15
Episode 31:
Handicapping the 2020 Election, Ep #31
Episode 47:
11 Investments in Your Home That Pay Off, Ep #47
Episode 63:
Jeff Bezos and Amazon: Past, Present, and Future Ep #63
Episode 79:
7 Ways Biden Plans to Tax American Families (Part II), Ep #79
Episode 95:
5 Beaten Down Stocks to Buy on the Dip, Ep #95
Episode 111:
Special Episode – Talking Energy with Daniel Turner, Ep. #111
Episode 127:
Retail Earnings Tank & What The Heck is Greenflation? Ep. #127