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Make the Most of Your 401(k)

We all know that a 401(k) is one of the most important retirement planning tools we have: The potential tax benefits and power of compound interest can make it a great savings and investment tool for anyone who practices financial discipline and contributes regularly. But your contributions aren’t the only things to consider when figuring out how to make the most of your 401(k).

First, you should get a copy of your 401(k)’s summary plan description to double-check the information you receive from HR when figuring out a 401(k). It can also include more information, like if your plan has a brokerage window if it allows in-service distributions where you can take withdrawals penalty-free at age 59 ½ even if you’re still working, and if it allows for after-tax contributions to help you save more. It’s also important to look at the fees you are charged, as they can range from less than 0.10% of assets a year to more than 1%. If you have 401(k)s from former employers, you should assess their fees and consider rolling them over.

You may have automatically enrolled to contribute 3% of your salary to your 401(k), so if you would like to contribute more, you will have to adjust. Contributing more might mean saving more for retirement and benefiting from your full employer match. As of 2019, you can contribute up to $19,000 per year to a 401(k) if you are under 50 and an additional $6,000 per year if you are 50 or older to help with saving for retirement while reducing your taxes.

Your 401(k) is a long-term investment: You pay into it for decades and will likely need to rely on it, among other sources of income, for decades in retirement. With a professional advisor, you can run a lifetime income illustration to see how long your 401(k) could last you in retirement, and how much you can withdraw from it each year. You should also consider reviewing your asset allocation as you get closer to retirement to help maintain a risk level appropriate for your age, future goals, and overall financial situation. Finally, remember that your 401(k)’s journey might not end with you: Confirm or update your beneficiary designations with a primary and contingent beneficiary.

It can take a well-trained eye to spot hidden fees or less than ideal investment options, which is why it can be helpful to consult a financial advisor when working to make the most of your 401(k). If you’ve been contributing to a 401(k) plan for most of your career, then it may be helpful for you to schedule your no-cost, no-obligation financial review. At Peak Financial Freedom Group, we’ll work with you to help better understand your goals for the future and how your 401(k) plan can help to fund your retirement.

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Peak Financial Freedom Group
2520 Douglas Boulevard, Suite 110
Roseville, CA 95661

DISCLOSURE: All presentation data is provided and intended to be used for general educational purposes only and is not intended as a solicitation for you to buy or sell any financial product. None of the material in this presentation is intended to give you, nor are the presenters engaged in giving you, specific tax, investment, real estate, legal, estate, retirement, or financial advice, but rather to serve as an educational platform to deliver information; nor is it intended to show you how the strategies presented can specifically apply to your own tax, investment, estate, financial, or retirement position, but rather to offer an idea of how these principles generally may apply.

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Illustrations/projections displayed within this presentation are hypothetical in nature and should not serve as the sole determining factor in making financial decisions. Consult with a qualified investment, tax, legal, and/or retirement advisor before making any decisions. By contacting Peak Financial Freedom Group, you may be offered additional information regarding the purchase of financial products. Seminars, radio shows, TV productions, book releases, magazine and book promotions are sponsored, promoted and paid for by Peak Financial Freedom Group, LLC. If you place assets under management with our firm, we are paid an advisory fee, and if you purchase an annuity from our firm, we are paid commissions from an insurance company.

Investment Advisor Representatives of and Advisory Services offered through Fiduciary Solutions, LLC, a Registered Investment Advisor. Peak Financial Freedom Group LLC is primarily a fixed insurance sales organization and provides no Advisory Services. PFFG Insurance Agency LLC, CA License #0N14103, is a licensed insurance agency and provides no Advisory Services. Peak Financial Freedom Group LLC, PFFG Insurance Agency LLC, and Fiduciary Solutions LLC are separate affiliated entities. Insurance products and services provided by PFFG Insurance Agency LLC and independent agents.

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