401(k) Nightmares: What They Don’t Tell You
Published: 2025-02-10
Status:
Available
|
Analyzed
Published: 2025-02-10
Status:
Available
|
Analyzed
Predictions from this Video
Incorrect: 0
Prediction
Topic
Status
Potential for higher tax rates in the future due to government spending and debt.
"our government keeps spending more money which means our government has more and more needs for higher taxes which means that there's a potential reason to believe that we will have higher tax rates in the future"
Pending
There is a potential for higher tax rates in the future due to increased government spending and debt.
"our government has more and more needs for higher taxes which means that there's a potential reason to believe that we will have higher tax rates in the future"
Pending
High expense ratios in 401k funds can result in significant financial losses over time, potentially costing hundreds of thousands or millions of dollars.
"this little fee can end up costing you tens of thousands or hundreds of thousands or even millions of of dollars in little fees that you can adjust just by paying attention to what the fees are"
Pending
Expense ratios in 401ks can cost individuals tens of thousands to millions of dollars over time.
"this little fee can end up costing you tens of thousands or hundreds of thousands or even millions of of dollars in little fees that you can adjust just by paying attention to what the fees are"
Pending
A difference in expense ratio from 0.07% to 0.85% in a 401k could lead to a loss of approximately $1 million in retirement savings over 40 years, assuming the same investment returns.
"if your expense ratio is 0.85% well now you're not going to have $5.2 million you're not going to have $5 million you're not going to have $4.5 million you're going to have around $4.2 million because that additional million went in fees"
Pending
A 0.85% expense ratio on a 401k could result in approximately $1 million less at retirement compared to a 0.07% expense ratio, assuming identical investment performance and contributions.
"if your expense ratio is 0.07% that means when you go to retire your 401k would have right around 5.2 million dollars sitting there but if you have a little bit of a higher expense ratio say that your expense ratio is 0.85% well now you're not going to have $5.2 million...you're going to have around $4.2 million because that additional million went in fees"
Pending
Employer 401k matches may have vesting schedules, requiring employees to work for a minimum period (e.g., 5 years) to retain the matched funds.
"some employers are going to put restrictions on how this works meaning a investing schedule which says that in order for you to actually get that money and keep that money for yourself you have to work at the company for at least 5 years"
Pending
Employer 401k match contributions may be subject to vesting schedules, requiring employees to work for a minimum period (e.g., 5 years) to fully retain the matched funds.
"some employers are going to put restrictions on how this works meaning a investing schedule which says that in order for you to actually get that money and keep that money for yourself you have to work at theany for at least 5 years"
Pending
Investing solely in stock market funds within a 401k does not constitute true diversification, as all these investments are susceptible to stock market downturns.
"all of your money is tied up with money managers on Wall Street so if the stock market crashes all of your funds go down maybe some will go down more than others but you get hurt when the stock market goes down that's not real diversification"
Pending
401k investments are typically limited to funds and do not allow direct investment in individual stocks like Tesla, Nvidia, or Amazon.
"when you invest your money in a 401k what you're doing is you're investing your money into a fund you're generally not going to be able to invest in individual companies like you can't take your 401k generally and invest it into the Tesla stock or Nvidia stock or Amazon stock"
Pending
There is a potential for higher tax rates in the future due to increasing national debt and government spending.
"we know that our national debt is always breaking new record highs and our government keeps spending more money which means our government has more and more needs for higher taxes which means that there's a potential reason to believe that we will have higher tax rates in the future"
Pending
While a 401k is a good starting point, it is not sufficient for all investments. Diversification outside the 401k is recommended, including IRAs, individual stocks, real estate, and startups.
"when it comes to your 401k it's a great place for the average person to start investing but it's a horrible place to keep all of your Investments because you got to have some more Investments outside of 401k that might include investing your money outside of 401k into an IRA or into individual stocks into your self-directed account that might mean investing your money to real estate that might mean investing your money into startups that might mean investing your money into other alternative assets outside of these basic Investments"
Pending
Investing solely within a 401k, even across different fund types, does not constitute true diversification because all investments are tied to the stock market and will decline if it crashes.
"all of your money is tied up with money managers on Wall Street so if the stock market crashes all of your funds go down maybe some will go down more than others but you get hurt when the stock market goes down that's not real diversification"
Pending
High expense ratios in 401k investments can cost investors tens of thousands to millions of dollars over time.
"this little fee can end up costing you tens of thousands or hundreds of thousands or even millions of of dollars in little fees that you can adjust just by paying attention to what the fees are"
Pending
Stocks, real estate, and businesses are identified as the top three asset classes for wealth creation in the US over the past century.
"the three asset classes that have built more wealth than anything else in the United States over the last Century are stocks real estate and businesses"
Pending
Stocks, real estate, and businesses are identified as the top three asset classes for wealth building in the US over the past century.
"the three asset classes that have built more wealth than anything else in the United States over the last Century are stocks real estate and businesses"
Pending
A difference in expense ratio from 0.07% to 0.85% on a 40-year investment could result in approximately $1 million less at retirement due to fees.
"if your expense ratio is 0.07% that means when you go to retire your 401k would have right around 5.2 million dollars sitting there but if you have a little bit of a higher expense ratio say that your expense ratio is 0.85% well now you're not going to have $5.2 million you're not going to have $5 million you're not going to have $4.5 million you're going to have around $4.2 million because that additional million went in fees"
Pending
Investing in startups, through brokerages or funds, offers significant potential upside but also carries the highest risk.
"this could be your own company this could be other startups there are brokerages and funds on the internet which allow you to invest in other startups this is a way now for you to invest in newer startup type companies but understand this comes with the most risk but also the most potential upside"
Pending
It is now possible to invest in startups through online brokerages and funds, which offers high risk and high potential reward.
"there are brokerages and funds on the internet which allow you to invest in other startups. This is a way now for you to invest in newer startup type companies but understand this comes with the most risk but also the most potential upside."
Pending
Some employers may have vesting schedules for 401k matches, requiring employees to work for a certain period (e.g., 5 years) to keep the matched funds.
"some employers are going to put restrictions on how this works meaning a investing schedule which says that in order for you to actually get that money and keep that money for yourself you have to work at the company for at least 5 years"
Pending
Beyond 401ks, individuals can invest in stocks through IRAs, brokerage accounts, index funds, mutual funds, or ETFs.
"your 401k is one way that you can invest in stocks but it's not enough what are other ways you can invest in stocks well you can invest in stocks through something like an IRA but that's also not the only way you can invest in stocks Yourself by opening up a brokerage and then investing in something like an index fund a mutual fund or an ETF"
Pending
Investing in real estate for rental income can involve properties such as single-family homes, apartment complexes, office buildings, retail buildings, or mixed-use buildings.
"when you invest in real estate you're looking to buy properties not to live in yourself but to rent out to other people these could be single family homes these can be apartment complexes these can be Office Buildings these can be retail buildings these can be mixed use buildings these are properties you're buying not to live in or use yourself but to rent out to other people"
Pending
It is possible to invest in startups through online brokerages and funds, offering high potential upside but also significant risk.
"there are brokerages and funds on the internet which allow you to invest in other startups this is a way now for you to invest in newer startup type companies but understand this comes with the most risk but also the most potential upside"
Pending