Objective information about financial planning, investments, and retirement plans

Review Your 401(k) Account


For many of us, our 401(k) plan is our main retirement savings vehicle. The days of a defined benefit pension plan are a thing of the past for most workers and we are responsible for the amount we save for retirement and how we invest that money.

Asset Allocation on Wikibook

Managed properly, your 401(k) plan can play a significant role in providing a solid retirement nest egg. Like any investment account, you need to ensure that your investments are properly allocated in line with your goals, time horizon and tolerance for risk.

You should thoroughly review your 401(k) plan at least annually. Some items to consider while doing this review include:

Have your goals or objectives changed?

Take time to review your retirement goals and objectives. Calculate how much you’ll need at retirement as well as how much you need to save annually to meet that goal. Review the investments offered by the plan and be sure that your asset allocation and the investments selected dovetail with your retirement goals and fit with your overall investment strategy including assets held outside of the plan.

Are you contributing as much as you can to the plan?

Look for ways to increase your contribution rate. One strategy is to allocate any salary increases to your 401(k) plan immediately, before you get used to the money and find ways to spend it. At a minimum, make sure you are contributing enough to take full advantage of any matching contributions made by your employer. For 2016 the maximum contribution to a 401(k) plan is $18,000 plus an additional $6,000 catch-up contribution for individuals who are age 50 and older at any point during the year.

Are the assets in your 401(k) plan properly allocated?

Some of the more common mistakes made when investing 401(k) assets include allocating too much to conservative investments, not diversifying among several investment vehicles, and investing too much in an employer’s stock. Saving for retirement typically encompasses a long time frame, so make investment choices that reflect your time horizon and risk tolerance. Many plans offer Target Date Funds or other pre-allocated choices. One of these may be a good choice for you, however, you need to ensure that you understand how these funds work, the level of risk inherent in the investment approach and the expenses.

Review your asset allocation as part of your overall asset allocation

Often 401(k) plan participants do not take other investments outside of their 401(k) plan, such as IRAs, a spouse’s 401(k) plan, or holdings in taxable accounts into consideration when allocating their 401(k) account.

Your 401(k) investments should be allocated as part of your overall financial plan. Failing to take these other investment assets into account may result in an overall asset allocation that is not in line with your financial goals.

Review the performance of individual investments, comparing the performance to appropriate benchmarks. You shouldn’t just select your investments once and then ignore them. Review your allocation at least annually to make sure it is correct. If not, adjust your holdings to get your allocation back in line. Selling investments within your 401(k) plan does not generate tax liabilities, so you can make these changes without any tax ramifications.

Do your investments need to be rebalanced?

Use this review to determine if your account needs to be rebalanced back to your desired allocation. Many plans offer a feature that allows for periodic automatic rebalancing back to your target allocation. You might consider setting the auto rebalance feature to trigger every six or twelve months.

Are you satisfied with the features of your 401(k) plan?

If there are aspects of your plan you’re not happy with, such as too few or poor investment choices take this opportunity to let your employer know. Obviously do this in a constructive and tactful fashion. Given the recent volume of successful 401(k) lawsuits employers are more conscious of their fiduciary duties and yours may be receptive to your suggestions.

The Bottom Line

Your 401(k) plan is a significant employee benefit and is likely your major retirement savings vehicle. It is important that you monitor your account and be proactive in managing it as part of your overall financial and retirement planning efforts.

Please contact me with any thoughts or suggestions about anything you’ve read here at The Chicago Financial Planner. Don’t miss any future posts, please subscribe via email.

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401(k) Fee Disclosure and the American Funds


With the release of the Department of Labor’s fiduciary rules for financial advisors dealing with client retirement accounts, much of the focus has been on the impact on advisors who provide advice to clients on their IRA accounts. Long before these new rules were unveiled, financial advisors serving 401(k) plan sponsors have had a fiduciary responsibility to act in the best interests of the plan’s participants under the DOL’s ERISA rules.


Starting in 2012, retirement plan sponsors have been required to disclose the costs associated with the investment options offered in 401(k) plans annually.

As an illustration, here’s how the various share classes offered by the American Funds for retirement plans stack up under the portion of the required disclosures that deal with the costs and performance of the plan’s investment options.

American Funds EuroPacific Growth

The one American Funds option that I’ve used over the years in 401(k) plans is the EuroPacific Growth fund.  This fund is a core large cap foreign stock fund.  It generally has some emerging markets holdings, but most of the fund is comprised of foreign equities from developed countries.  The R6 share class is the least expensive of the retirement plan share classes.  Let’s look at how the various share classes stack up in the disclosure format:

Share Class Ticker Expense Ratio Expenses per $1,000 invested Trailing 1 year return Trailing 3 year return Trailing 5 year return
R1 RERAX 1.59% $15.90 -10.54% 1.77% 0.89%
R2 RERBX 1.57% $15.70 -10.55% 1.79% 0.90%
R3 RERCX 1.13% $11.30 -10.13% 2.24% 1.37%
R4 REREX 0.84% $8.40 -9.89% 2.55% 1.66%
R5 RERFX 0.53% $5.30 -9.60% 2.86% 1.97%
R6 RERGX 0.50% $5.00 -9.56% 2.90% 2.01%

3 and 5 year returns are annualized.  Source:  Morningstar   Data as of 4/30/2016

While the chart above pertains only to the EuroPacific Growth fund, looking at the six retirement plan share classes for any of the American Funds products would offer similar relative results.   

The underlying portfolios and the management team are identical for each share class.  The difference lies in the expense ratio of each share class.  This is driven by the 12b-1 fees associated with the different share classes.  This fee is part of the expense ratio and is generally used all or in part to compensate the advisor on the plan.  In this case these would generally be registered reps, brokers, and insurance agents.  The 12b-1 fee can also revert to the plan to lower expenses. The 12b-1 fees by share class are:

R1                   1.00%

R2                   0.74%

R3                   0.50%

R4                   0.25%

R5 and R6 have no 12b-1 fees.

Share classes matter

The R1 and R2 shares have traditionally been used in plans where the 12b-1 fees are used to compensate a financial sales person.  This is fine as long as that sales person is providing a real service for their compensation and is not just being paid to place the business.

With all of the publicity generated by the new DOL fiduciary rules one has to wonder if the expensive R1 and R2 share classes might go by the wayside at some point

If you are a plan participant and you notice that your plan has one or more American Funds choices in the R1 or R2 share classes in my opinion you probably have a lousy plan and you are overpaying for funds that are often mediocre to poor performers.  It is incumbent upon you to ask your employer if the plan can move to lower cost shares or even a different provider. The R3 shares are a bit of an improvement but still pricey for a retirement plan in my opinion. That evaluation has to be made in the context of the plan’s size and other factors.

Please contact me with any thoughts or suggestions about anything you’ve read here at The Chicago Financial Planner. Don’t miss any future posts, please subscribe via email. Please check out our resources page as well.  

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5 Reasons 401(k) Lawsuits Matter to You


Several 401(k) lawsuits against major employers have been in the news this year. These suits are about high fees, conflicts of interest and plan sponsors failing to live up to their fiduciary obligations.


Ameriprise Financial settled a suit that alleged that the firm offered a number of its own proprietary mutual funds in the company’s 401(k) plan and collected revenue sharing payments on these funds from an Ameriprise subsidiary.

The U.S. Supreme Court ruled in Tibble vs. Edison International that the large utility company had a duty to monitor the investments offered in the plan no matter how long along they were initially added to the plan. One of the issues here surrounds the fact that lower cost share classes of these funds became available but the plan stayed with the higher cost retail share class.

Most recently Boeing settled a lawsuit that was first filed in 2006 for $57 million. The suit alleged that the company had breached its fiduciary duty to its employees by using high cost and risky investment options in the plan and by allowing the plan’s record keeper to charge employees and retirees excessive fees.

While all of this may be interesting, you may be asking what does any of this have to do with me? Here are 5 reasons 401(k) lawsuits matter to you.

Plan Sponsors have a fiduciary obligation 

These and a growing number of 401(k) related lawsuits have reaffirmed that retirement plan sponsors have a fiduciary obligation to act in the best interests of the plan participants. This includes:

  • The selection and monitoring of the mutual funds (or other investment vehicles) offered in the plan.
  • The selection and monitoring of the service providers selected for the plan.
  • All costs and fees associated with the plan.

Moreover plan sponsors should have a process in place to manage all aspects of the plan.

Mutual Fund share classes 

Several of the lawsuits centered on plan sponsors offering expensive retail share classes of funds when lower cost share classes were available. These higher cost share classes might throw off more revenue sharing and other fees to the plan but they are more expensive for the plan participants. It behooves plan sponsors more now than ever to offer the lowest cost share classes of a given fund available to them.

Numerous studies have shown the connection between lower investment costs and investment return. Well-run 401(k) plans strive to keep investment costs down and one way to do this is to ensure that the plan offers the lowest mutual fund share classes available.

Duty to monitor 

As shown in the Tibble versus Edison ruling the Supreme Court said plan sponsors have a duty to continue to monitor the investments offered in the plan long after they may have been initially offered. This dovetails into an ongoing duty of plan sponsors to monitor the investments offered to you to ensure the costs are reasonable and that they meet a set of criteria.

Typically a 401(k) that is well-monitored and managed via a consistent investment process will tend to offer a better investment line-up to their participants.

Manage plan expenses 

Boeing recently settled the second largest 401(k) suit in history at $57 million. In part the allegations included that Boeing allowed its outside record keeper to charge employees and retirees excessive fees.

This and other suits underscore the responsibility of plan sponsors to manage 401(k) plan costs and the activities of plan providers such as an outside record keeper. To the extent that administrative expenses are paid out of plan assets plan sponsors who strive to keep these expenses low are doing the right thing for their employees.

Plan Sponsors are getting it 

While this is not a blanket statement as there are still plenty of lousy 401(k) plans out there, there is evidence that plan sponsors are getting the message that they have a responsibility to the plan’s participants.

As an example mutual fund expenses in 401(k) plans have been declining for the past 15 years. Fewer companies are mandating the use of company stock in their 401(k) plans and a 2014 Supreme Court ruling will certainly help keep this trend going.

The Bottom Line 

Retirement plan sponsors have a fiduciary obligation to act in the best interests of the plan’s participants. A number of 401(k) lawsuits in recent years have served to reinforce this duty and this is a good thing for those participating in 401(k) plans. As a plan participant become knowledgeable about the investments offered in your plan and how much the plan is costing you. If you have concerns raise them in a constructive fashion to your employer.

Please contact me with any thoughts or suggestions about anything you’ve read here at The Chicago Financial Planner. Don’t miss any future posts, please subscribe via email.

Six Reasons Small Businesses Should Offer a 401(k) Plan


The statistics on the number of American workers not covered by a workplace retirement plan like a 401(k) are sobering. According to a 2011 survey just over half of all American workers had access to a workplace retirement plan.

Sadly all too often the reason that smaller companies don’t offer a 401(k) plan are that they can be expensive and there are a vast number of government rules and regulations that must be followed. Small business owners have all that they can handle in running and growing their companies.

Here are six reasons that a small business should consider offering a 401(k) plan for their employees.

The owner’s retirement needs

 Small business owners work hard to manage and grow their companies. Unlike with a larger organization there generally are not armies of employees to handle administrative tasks like human resources or accounting. The owner is often the face of the business and intimately involved in sales and various business processes. It is not uncommon for small business owners to put in many long hours and take very little time off.

Too often the hope is that the value of the business will serve as their retirement plan. Maybe this will happen; they will find a willing buyer who will pay a premium price for the company. Or maybe it won’t happen at least not quite that way.

A 401(k) plan allows the business owner to contribute up to $18,000 or $24,000 (if 50 or over) of their compensation for 2015. In addition they can make a profit sharing contribution as well. This can bring the total combined employee deferral and employer contribution for the owner to a maximum of $53,000 or $59,000 if they are 50 or over. This can go a long way towards helping the business owner fund a comfortable retirement for themselves.

Business contributions and tax dedications

Any employer matching contributions will be tax-deductible as will any costs incurred by the employer in connection with offering the plan.

In order to alleviate any restrictions on the amount the business owner and top executives can contribute for themselves the company may decide on a safe harbor plan that entails a minimum matching level or a minimum level of contributions to the accounts of all employees whether they contribute to the plan or not. The safe harbor contributions are immediately vested for the employees. In exchange the owner will not be limited as to the amount of their contributions based on the results of the required non-discrimination testing. Certainly not all small businesses will be able to afford the safe harbor contributions but for those that can this is a great solution for the owners and the employees.

Doing the right thing for employees

There many articles written and studies done that point to a retirement savings crises in this country. Part of the problem as mentioned above is the lack of availability of a workplace retirement plan for a number of U.S. workers.

Offering your employees a low cost 401(k) plan is a great way to help them save for their retirement and frankly it’s the right thing to do for employees. They work hard and contribute to the success of the business, they should have the opportunity to save for their own retirement and build a measure of financial security for themselves and their families.

Attract and retain top talent

With the economy having largely recovered from the financial crises unemployment is low and many companies are having a hard time finding the workers they need in some cases. Top talent expects to be well-compensated and a quality 401(k) plan is a part of a top-notch compensation package. While likely not the main driver of determining whether a top prospective employee accepts your job offer, a really lousy 401(k) plan (or no plan) might be the “tie-breaker.”

Likewise if a valued employee is being courted by a competitor and that competitor has a robust benefits package that includes a much better 401(k) plan that might be the difference between retaining that key employee and losing them. 

Financial wellness can help the bottom line

Employees who are worried about retirement or other financial issues may be less productive at work. Stressed out employees might also drive up the company’s healthcare costs.

According to a survey by benefits consultant AON Hewitt about 90% of the country’s 250 largest employers also recognize the impact of financial stress on their workforce and will be looking to expand or start financial wellness programs.

Small businesses may not have the resources of these large companies but offering a solid, low cost 401(k) plan is a positive step for their employees on the road towards financial wellness. 

Technology has expanded plan options

Just a few years ago smaller plans and start-ups had very few alternatives and most of those alternatives were high cost plans with questionable investment choices. Insurance company group annuities were also a common option in this market, again generally an expensive, unattractive option.

There are a number of low-cost 401(k) options for small businesses today that thanks in large part to technological advances can offer a complete package including administration, education and low-cost investing options at a reasonable price. Some of these providers serve as plan fiduciaries taking that responsibility off of the shoulders of the business owner.

Frankly cost and the rules connected with running a plan can make it a hassle where these issues and the costs outweigh the good of offering the plan in the minds of many small business owners. The new generation of user-friendly low cost options for small businesses remove this hurdle.

The Bottom Line 

Traditionally the 401(k) options for small businesses have been limited to high cost options with less than desirable investment options. Today with the advances in technology there are a number of low cost, low-hassle options for small companies to consider. Offering a 401(k) plan is a win-win for small businesses in that the owners win and so do their employees.

This post was sponsored (meaning that I was compensated) by San Francisco based ForUsAll an innovative provider of low cost turnkey 401(k) solutions for small businesses. They had no editorial input on anything above. 

I discovered ForUsAll in a finance blogging group that I am part of and was very impressed with what they can offer a small business looking for a turn-key 401(k) solution. They take all of the administrative and compliance burdens off the shoulders of the plan sponsor through their status as a 3(16) fiduciary. Via their menu of low-cost Vanguard funds and their technology they offer a complete 401(k) solution that includes guidance for employees.

Please contact me with any thoughts or suggestions about anything you’ve read here at The Chicago Financial Planner

The Risks of Too Much Company Stock in Your 401(k) Plan


Retirement plan sponsors are starting to get it, requiring 401(k) participants to hold company stock in their accounts exposes them to major fiduciary liability if the stock price tanks. That said it is still an option in many 401(k) plans.

According to Fidelity about 15 million people own about $400 billion in company stock across 401(k) plans that they administer.

Too dependent on your employer    

Just ask former employees of Enron, Lehman Brothers or Radio Shack about this.

All employees depend on their employer for a paycheck. If you add a high level of company stock as a component of your 401(k) account you have a recipe for disaster. If the company tanks you might find yourself out of job with no income. If this difficulty causes the stock price to decline you are not only unemployed but your retirement nest egg has taken a hit as well.

How much is too much? 

There is no one right answer; this will vary on a case by case basis. Many financial advisors say the total in employer stock should be kept to a maximum of 5% to 10% of total investment assets. This not only includes stock held in your retirement plan but also shares held outside the plan as well shares represented by any stock options or restricted shares that may be held.

Employers and fiduciary risk 

In the past it was more common for companies to use their stock as the matching vehicle in the 401(k) plan and to require that it be held for a period of time. Both are less common today due to a number of lawsuits by employees against companies after significant declines in the price of their employer’s stock. Plan sponsors want to avoid this type of fiduciary liability.


It is important to set a maximum allocation to your employer’s stock in your 401(k) plan and in total.  Use increases in the stock price as opportunities to take profits and diversify. Within your 401(k) plan there will be no taxes to pay on the gains, though there will be taxes due down the road when taking distributions from a traditional 401(k).

Make sure you fully understand any restrictions on selling company shares held in your plan.

Discounted purchases 

Often employees have the opportunity to purchase shares of company stock at a discount from the current market price. This is a great feature but the decision to purchase and how much to hold should not be overly influenced by this feature.

Net Unrealized Appreciation 

If you leave your employer and hold company shares in your 401(k) plan consider using the net unrealized appreciation (NUA) rules for the stock.

NUA allows employees to take their company stock as a distribution to a taxable account while still rolling the other money in the plan to an IRA if they wish. The distribution of the company stock is taxable immediately, at ordinary income tax rates, based upon the employee’s original cost versus the current market value.

The advantage for holders of highly appreciated shares can be sizable. Any gains on the stock will qualify for long-term capital gains treatment where the rates are generally lower. For a large chunk of company stock the savings can be very significant. Note there are very specific rules regarding the use of NUA so it is best to consult with a knowledgeable financial or tax advisor if you are considering going this route.

The Bottom Line 

Holding excessive amounts of your company’s stock in your 401(k) plan can expose you to undo risk should your employer run into financial difficulty. You could find yourself unemployed and with a much lower retirement plan balance if the stock price drops significantly. Set a target percentage for your overall holdings of employer stock and periodically sell shares if needed to rebalance just as you would any other holding in the plan.

Please contact me with any thoughts or suggestions about anything you’ve read here at The Chicago Financial Planner. Don’t miss any future posts, please subscribe via email. Please check out our resources page as well.

7 Tips to Become a 401(k) Millionaire


According to Fidelity, the average balance of 401(k) plan participants grew to a record high of $91,300 at the end of 2014.  This data is from plans using the Fidelity platform.

According to Fidelity about 72,000 participants had a balance of $1 million which is about double the number at the end of 2012 and about 5 times the number at the end of 2008.  What their secret?  Here are 7 tips to become a 401(k) millionaire or to at least maximize the value of your 401(k) account.

Be consistent and persistent 

Investing in your 401(k) plan is more of a marathon than a sprint.  Maintain and increase your salary deferrals in good markets and bad.

Contribute enough 

In an ideal world every 401(k) investor would max out their annual salary deferrals to their plan which are currently $18,000 and $24,000 for those who are 50 or over.  If you are just turning 50 this year or if you are older be sure to take advantage of the $6,000 catch-up contribution that is available to you.  Even if you plan limits the amount that you can contribute because of testing or other issues this catch-up amount is not impacted.  It is also not automatic so be sure to let your plan administrator know that you want to contribute at that level. 

According to the Fidelity study the average contribution rate for those with a $1 million balance was 16 percent, while the average contribution across all 401(k) investors they surveyed was about 8 percent.  The 16 percent contribution rate translated to a bit over $21,000 for the millionaire group.

As I’ve said in past 401(k) posts on this site, it is important to contribute as much as you can.  If you can only afford to defer 3 percent this year, that’s a start.  Next year try to hit 4 percent or more.  As a general rule it is a good goal to contribute at least enough to earn the full matching if your employer offers one.

Take appropriate risks 

As with any sort of investment account be sure that you are investing in accordance with your financial plan, your age and your risk tolerance.  I can’t tell you how many times I’ve seen lists of plan participants and see participants in their 20s with all or a large percentage of their account in the plan’s money market or stable value option.

Your account can’t grow if you don’t take some risk.  

Don’t assume Target Date Funds are the answer 

Target Date Funds are big business for the mutual fund companies offering them.  They also represent a “safe harbor” from liability for your employer.  I’m not saying they are a bad option but I’m also not saying they are the best option for you.

I like TDFs for younger investors say those in their 20s who may not have other investments outside of the plan.  The TDF offers an instant diversified portfolio for them.

Once you’ve been working for a while you should have some outside investments.  By the time you are say in your 40s you should consider a more tailored portfolio that fits you overall situation.

Additionally Target Date Funds all have a glide path into retirement.  They are all a bit different, you need to understand if the glide path offered by the TDF family in your plan is right for you. 

Invest during a long bull market 

This is a bit sarcastic but the bull market for stocks that started in March of 2009 is in part why we’ve seen a surge in 401(k) millionaires and in 401(k) balances in general.  The equity allocations of 401(k) portfolios have driven the values higher.

The flip side are those who swore off stocks at the depths of the 2008-2009 market downturn have missed one of the better opportunities in history to increase their 401(k) balance and their overall retirement nest egg.

Don’t fumble the ball before crossing the goal line 

We’ve all seen those “hotdogs” running for a sure touchdown only to spike the ball in celebration before crossing the goal line.

The 401(k) equivalent of this is to just let your account run in a bull market like this one and not rebalance it back to your target allocation.  If your target is 60 percent in stocks and it’s grown to 80 percent in equities due to the run up of the past few years you might well be a 401(k) millionaire.

It is just as likely that you may become a former 401(k) millionaire if you don’t rebalance.  The stock market has a funny way of punishing investors who are too aggressive or who don’t manage their investments.

Pay attention to those old 401(k) accounts 

Whether becoming a 401(k) millionaire in your current 401(k) account or combined across several accounts the points mentioned above still apply.  In addition it is important to be proactive with your 401(k) account when you leave a job.  Whether you roll the account over to an IRA, leave it in the old plan or roll it to a new employer’s plan if allowed do something, make a decision.  Leaving an old 401(k) account unattended is wasting this money and can be a huge detriment to your retirement savings efforts.

The Bottom Line 

Whether or not you actually amass $1 million in your 401(k) or not the goal is to maximize the amount accumulated there for retirement.  The steps outlined above can help you to do this.  Are you ready to start down the path of becoming a 401(k) millionaire?

Please contact me with any thoughts or suggestions about anything you’ve read here at The Chicago Financial Planner. Don’t miss any future posts, please subscribe via email. Please check out our resources page as well.

7 Reasons to Avoid 401(k) Loans


One of the features of many 401(k) plans is the ability for participants to take a loan against their balance.  There are rules governing what the loans can be used for, the number of loans that can be outstanding at one time, and the percentage of your account balance that can be borrowed.  Additionally there is a time limit by which these loans need to be repaid.

It is the decision of the organization sponsoring the plan whether or not to allow loans and also as to what they can be used for.  Typical reasons allowed are for college expenses for your children, medical expenses, the purchase of a home, or to prevent eviction from your home.

The flexibility offered by allowing loans is often touted as one of the good features of the 401(k).  However taking a loan from your 401(k) also carries some downsides.  Here are 7 reasons to avoid 401(k) loans.  

Leaving your job triggers repayment 

If you leave your job with an outstanding loan against your 401(k) account the balance can become due and payable immediately.  This applies whether you leave your job voluntarily or involuntarily via some sort of termination.  While your regularly scheduled repayments are deducted from your paycheck, you will need to come up with the funds to repay the loan upon leaving your job or it will become a taxable distribution.  Additionally if you are under 59 ½ a 10% penalty might also apply.

Opportunity costs in a rising market

While loan repayments do carry an interest component which you essentially pay to yourself, the interest rate might be much lower than what you might have earned on your investments in the plan during a rising stock market.  Obviously this will depend upon the market conditions and how you would have invested the money.  This can lead to a lower balance at retirement resulting in a lower standard of living or possibly necessitating that you work longer than you had planned.

There are fees involved 

There are often fees for loan origination, administration, and maintenance which you will be responsible for paying.

Interest is not tax deductible 

Even if the purpose of the loan is to purchase your principal residence interest on 401(k) loans is not tax-deductible.

No flexibility in the repayment terms 

The loan payments are taken from your paycheck which all things being equal will reduce the amount of money you bring home each pay period.  If you run into financial difficulty you cannot change the terms of the loan repayment.

You might be tempted to reduce your 401(k) deferrals 

The fact that you now have to repay the loan from your paycheck might cause you to reduce the amount you are saving for retirement via your salary deferral to the plan.

You will have less at retirement 

A loan against your 401(k) plan will result in lower nest egg at retirement.  Given the difficulty many in the United States already have in accumulating a sufficient amount for retirement this only adds to the problem.

You should especially avoid 401(k) loans if:

  • You are near retirement
  • You feel that your job security is in jeopardy
  • You are planning to leave your job in the near future
  • You are already behind in saving for retirement
  • You have other sources to obtain the money you need
  • You feel that repaying the loan will be financial hardship 

Look life happens and sometimes taking a loan from your 401(k) plan can’t be avoided.  The economy has been tough for many over the past few years.  However if at all possible avoid taking a 401(k) loan and rather let that money grow for your retirement.  Down the road you will be glad you did.

Please contact me with any thoughts or suggestions about anything you’ve read here at The Chicago Financial Planner. Also check out our Resources page for more tools and services that you might find useful.