05/24/2023
Eight Facts about your 401k (or similar plan).
1. We’re 18 months into a stock market decline and most people are down 15-20%
2. Many don’t feel the magnitude of the loss because new money is constantly going in through payroll deduction and employer matching contributions.
3. If you’re down 20% - you must earn 25% to get back to breakeven ($100 – 20% = $80. $80 + 25% = $100).
4. You’ve also lost 18 months of unrecoverable time – arguably more important than the money - but a ‘loss-compounding’ factor to be sure.
5. Inflation over that period has been 8% - meaning you’ve suffered 8% less purchasing power on the money you haven’t lost.
6. An automatic tax rate increase takes effect Jan 1, 2025.
7. There are no positive signs suggesting a market recovery is on the near-term horizon. Many think more losses are headed our way.
8. All along, investing fees and commissions have been deducted from your account and sent to nameless advisors – and you’re still losing money.
What’s the solution?
Here’s one idea that’s working:
• Strategy ensures a 5% compound return on up to $50,000 of a 401k or similar plan balance
• Plan leverages a 401k (or similar plan) balance to setup a side-fund with NO additional savings
• In 10 years, side fund will be worth $500,000 and support $200,000 of annual income
Want to know more?
