Strategies for your 401k

<p><strong>Josh Tirado: </strong> hi, I'm -Josh Tirado, and you're listening to making smart decisions today.</p><p>[00:01:46] We're going to jump into the topic of 401ks. I like to start with when I meet with new clients is the discussion around don't take my advice at face value. I want to discuss this with you. I want to discuss. The strategy, why the strategy works for you, or a different strategy or different direction we should go in.</p><p>[00:02:05] I need you as a client to be comfortable and to be able to sleep at night. You're hiring me as the professional to bring the knowledge and teach you to help implement it. But I need you to be comfortable with it. On the number of topics I want to discuss today, I would like to review the strategy behind the different topics and not just take what every advisor says at face value.</p><p>[00:02:26] when it comes to 401ks, there's a lot of news out there that says 401k is a great strategy, best thing since sliced bread. And when you dig a little bit deeper, most advisors,  the canned advice, contribute up to the company match within your 401k.</p><p>[00:02:42]that's very good. That sounded vice, but let's discuss why you want to do a 401K in the first place. 401ks became popular back in the eighties.</p><p>[00:02:52] That was because, in the mid-eighties, an average mortgage rate was 12%. good mortgage rate was 10% CDs are paying 14% taxes were extraordinarily high. Many individuals said I'm going to do a 401k where I can contribute the money pretax and have it grow tax-deferred, not pay taxes.</p><p>[00:03:12] Now pull the money out in retirement when I'm in a lower tax bracket. So at that point, Hey, I'm deferring taxes now. And I'm in a much higher bracket only to pull them out later on when I'm in the lower bracket or living on less money and in the lower tax bracket. And it made a lot of sense. And that strategy has worked very well for those people.</p><p>[00:03:30]Fast forward to 2020, and the issue is income tax brackets are at an all-time low, a