Time stamps:

1:10 – “How wary should I be of 401(k) fees through my company’s plan?”

4:50 – “How should I invest a large sum of my savings towards my kids future expenses?”

7:28 – “Is now a good time to put money into a Roth IRA?”

13:20 – “Should I max out my Roth IRA contributions before investing in another vehicle?”

17:10 – “Is a fiduciary or a broker better for planning and investing assets?”

19:00 – “Is it possible to spread out the taxes after closing out a guaranteed annuity?”

24:00 – “Should I stay with a 403(b) annuity or roll it back into my 401(k)?”

28:43 – “How can I dig myself out of debt after losing my job?”

Show Notes

*Modified Adjust Gross Income – Investopedia

MAM Podcast 190: Financial Questions with Tim & Tom – Transcript

Tom Mullooly: Welcome back to the podcast. This is episode 190 of the Mullooly Asset Management podcast.

Tim Mullooly: We’re getting close to 200 now. That’s a lot.

Tom Mullooly: That’s right. Well, we appreciate everybody tuning in. I’m Tom Mullooly.

Tim Mullooly: This is Tim Mullooly.

Tom Mullooly: Together, we answer your questions that come in. We happen to have a slew of interesting questions that have come in, and we want to tackle them, so let’s jump right in.

Tim Mullooly: Right on. First question is, “How wary should I be of 401(k) fees through my company’s plan?” It goes on to say, “I have been working for a company for over six months and have been offered a 401(k). The vesting period is surprisingly six months and 100% matching. After recently becoming more aware of the hidden fees that these financial companies charge their employees, I asked both my employer and the 401(k) financial company about the fees. They both stated that my employer pays for all the fees. This sounds too good to be true. Is there something I should be aware of or concerned about?”

Tom Mullooly: Well, when it comes to 401(k) fees, should you be wary? I think you should be aware.

Tim Mullooly: Right.

Tom Mullooly: The fees are pretty much negotiated between the company, the employer, and the administrator on the plan. It may sound surprising in 2017 that the vesting period is six months. I’m not surprised. When I worked at a particular brokerage firm, I was not permitted to join the 401(k) plan for the first year that I worked there, and then I was invited to join the 401(k) plan.

Tim Mullooly: Lucky you.

Tom Mullooly: Yeah. The 100% matching, make sure you understand what the terms are with the 100% matching. I can’t imagine an employer, if you maxed out your $18,000 contribution that they’re going to match it 100%, so I would check the fine print on that. Since it sounds like you’ve been checking the fine print anyway on hidden fees, there’s nothing really hidden too much anymore. It’s all out in broad daylight.

Tim Mullooly: Right.

Tom Mullooly: The statement that kind of jumped off the page at me is that the employer and the plan administrator both said that the employer pays for all of the fees. Now, let’s just pump the brakes a little bit on this.

They may pay transaction costs and they may pay for any kind of maintenance fees that go on in the plan, but if there are embedded fees in the investments that you own, for instance, if you’re going to own a bond ETF in your 401(k) and there’s nine basis points built into that, I really doubt that the employer is going to pick that up because there’s no way to really bill it.

I wouldn’t be very,