10/26/2026
I'll Actually give you 4 mistakes people make with 401(k)s:
1. Over Contributing to your 401(k). By all means, if your company matches dollar for dollar up to a certain amount - and IF it makes sense - take the free money UP TO THAT match amount. Overcontributing means you are putting more of your own money at risk when the market drops, AND all your contributions - and growth - WILL BE FULLY TAXED on distribution. Together, we can look at options to divert your overcontribution into Tax-Free options. Diversify the Risk and Future Taxation.
2. Your 401(k) most likely has a bunch of fees you are unaware of. Those can erode your returns over time, and the bigger your account gets, the higher the fees. KNOW what you are paying. Can't tell you how many people think they don't pay fees! They DO!
3. Deferred Taxes now DOES NOT MEAN NO TAXES LATER! Your Tax Bill will come Due when you retire and whether you need the extra income or not later on, by Age 73 the IRS will come knocking and make you take the RMDs! Time to Pay Up.
4. Borrowing against your 401(k) is a double-edged sword. You typically have to pay that money back with interest within 5 years (most can't) unless buying a home which may give you more time. But if you leave or lose your job, you usually have to pay the loan and interest back immediately or within 90 days. If you can't, it will be treated as a withdrawal and you will not only pay taxes, but also a hefty penalty if you are under age 59 1/2.
My Team and I are available to help you explore and navigate options without guessing. Let's setup a Coffee Zoom and help you learn all the information so you can make sound and informed decisions. Drop me a DM or comment COFFEE and we'll talk.
