Doing something just because everyone else is doing it can be very dangerous; even when what you’re try to do is good. And most people don’t know the 401k plan was actually invested by accident in 1981, that’s literally less than 50 years ago

For example, the 401k which is retirement account, a lot of people tell you should try to max it out every year, and to max that thing out you need to invest around $19,500. And the benefit is, the money can be invested before taxes, and grows tax free, and then you pay taxes later on in life. Which sounds good until you realize what the truth actually Is.

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1. All the terrible things that go on in 401k

-Terrible investments with high expense ratio

-High management fees

-And also terrible selection of investments

-Taxes may be higher in the future and your gains would be whipped out ( 50-94% )

-Withdrawals are taxed as ordinary income ( that’s crazy after 72 mandatory I think )

-Penalties take money out early that’s 10% plus the taxes

2. 401k and Taxes

-Record Spending ( record taxes, we gotta pay that back )

( the initial reasoning ) executive cash-deferred plans ( non-qualified )

-Risk, you may lose the money if the money goes bankrupt or if you lose the company, they might pay It out all out at once

-To stay out of tax brackets

-Plus match potentially

Benna said in 2011 “ he Created a Monster “ ( because wall street is making a bunch of money )

3. Solutions

-Get a 100% return today via the match

-Use a Roth option where available

-Invest the rest into an IRA and max that out

-Money left over out into a Taxable Brokerage account

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*Some of the links and other products that appear on this video are from companies in which Tommy Bryson will earn an affiliate commission or referral bonus. Tommy Bryson is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. I’m an Accountant but I’m not your Accountant, always review information with your Accountant/CPA and your Financial Advisor.

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