Millions Will Regret This 401k Mistake

About this video

• Video Title: Millions Will Regret This 401k Mistake
• Channel: Minority Mindset
• Speakers: Not explicitly stated, but likely the creator of the channel.
• Duration: 00:18:56

Overview

This video discusses common mistakes people make with their 401(k) investments and explores potential changes to 401(k) options. It contrasts traditional and Roth 401(k)s, highlights the impact of fees, and advises on adjusting contributions, choosing funds, and not forgetting about old accounts or employer matches. The creator also suggests that relying solely on a 401(k) may not be sufficient for retirement, encouraging diversification of investments.

Key takeaways

• 401(k) Types: The video explains the difference between traditional 401(k)s (tax-deferred growth, taxed upon withdrawal) and Roth 401(k)s (post-tax contributions, tax-free growth and withdrawals).
• Potential 401(k) Changes: An executive order may allow for "alternative assets" like private market investments, real estate, digital assets, commodities, infrastructure projects, and lifetime income strategies to be included in 401(k)s.
• Fee Impact: Overpaying in fees (expense ratios) can significantly reduce long-term returns. Opting for lower-cost, passively managed index funds over actively managed mutual funds can save hundreds of thousands of dollars over time.
• Contribution Adjustments: Failing to increase 401(k) contributions when receiving a higher salary after a job change can lead to substantial lost savings.
• Fund Selection: Investing in overpriced and underperforming funds is a common mistake that hinders wealth growth.
• Forgotten Accounts: Millions of dollars are lost in forgotten 401(k) accounts left behind at previous employers.
• Employer Match: Not contributing enough to receive the full employer match is essentially leaving free money on the table.
• Beyond the 401(k): The video suggests that a 401(k) alone may not be enough for retirement, encouraging individuals to explore other investment avenues.