About this video

• Video Title: I’m a Financial Advisor—Here’s Exactly How I Manage My 401(k)
• Channel: Retire with Ashley
• Speakers: Ashley Mitchay
• Duration: 13:07

Overview

This video provides a comprehensive guide from financial advisor Ashley Mitchay on how she manages her own 401(k). She shares her strategies for contribution levels, investment allocation, and the importance of regular, yet not excessive, monitoring of the account. The video also touches on common mistakes people make with their 401(k)s and offers cautionary advice regarding market concentration and accessing funds.

Key takeaways

• "Eating your own cooking": A financial advisor should follow the same principles they advise clients on, such as living within means, saving, and investing wisely.
• 401(k) Monitoring Frequency: It's recommended to log in at least quarterly to check on performance, investments, beneficiaries, and contributions, but daily logging is unnecessary and can lead to micromanagement.
• Contribution Strategy: The speaker maxes out her Roth 401(k) annually, prioritizing tax-free growth in retirement over immediate tax deductions.
• Investment Allocation: As a 40-year-old, her 401(k) is invested approximately 95% in stocks and 5% in bonds/cash, with a focus on large-cap growth and value, and some allocation to mid-cap, small-cap, and international stocks.
• Caution on Market Concentration: The video warns about the current high concentration of the S&P 500 in a few large tech companies, which can pose significant risk, especially within target-date funds or S&P 500 index funds.
• Avoid 401(k) Withdrawals: Hardship distributions or loans from a 401(k) are strongly discouraged as they significantly damage long-term wealth-building potential, and the account should be treated as a last resort for funds.
• Actionable Advice: Viewers are encouraged to log into their 401(k)s to check balances, beneficiaries, contribution types (Roth vs. traditional), and contribution percentages to ensure they align with their goals.

Ashley Mitchay chooses to contribute to a Roth 401(k) because she doesn't prioritize the tax deduction in the current year. She anticipates that "future Ashley" will benefit significantly from it. The long-term benefits she foresees include tax-free growth of her investments and tax-free withdrawals in retirement. Furthermore, she notes that unlike Roth IRAs, there are no income limitations for contributing to a Roth 401(k). She also sees it as a way to avoid forced minimum distributions in retirement and to facilitate a tax-free transfer of wealth to her heirs, who would then have 10 years to withdraw the funds tax-free.

Based on her age (40 years old) and her investment strategy, Ashley Mitchay's 401(k) is approximately allocated as follows:

• Stocks: 95%
• Bonds: 5% (with a small portion of this possibly being cash)

Within the stock allocation, she primarily invests in:

• Large-cap: Split between growth and value.
• Mid-cap: Around 10%.
• Small-cap: Around 10%.
• International: Around 18%.

She mentions that her 401(k) is about 20% of her overall financial investable assets, and she ensures her 401(k) investments complement her other investments without too much overlap.

Ashley Mitchay highlights a significant risk related to market concentration. She points out that as of her recording in 2025, the S&P 500 is highly concentrated, with about 40% of its market cap represented by just 10 companies, largely dominated by big tech names.

Since many target-date funds and S&P 500 index funds mirror this index, they are heavily invested in these few large companies. This overconcentration, especially when market valuations are stretched, can lead to deep losses if market sentiment or the economy shifts. She warns that this introduces unnecessary risk due to the lack of diversification within these popular investment vehicles.