![]() ![]() So today we’ll tackle the question "What should you do with the 401(k) you already own?" You know how important it is, but you may not know just how to take care of it and help it grow. 3 And 62% of respondents said that they expect their 401(k) account to be their largest source of income for their retirement. In fact, 88% of respondents to a recent survey by Schwab Retirement Plan Services considered the availability of a 401(k) a must have when looking for a job, ranking almost as high as health insurance. 2 These accounts are extremely important. In the late 1980s, as traditional pensions became increasingly expensive for companies to maintain, corporate America transitioned to the 401(k) plan as the primary benefit for retirement savings. Back then the emperor could be killed or the whole empire could be defeated, and then all those legionnaires would lose their benefits. For you native Latin speakers, Augustus’s plan was called the “aerarium militare,” 1 and it may well have been the beginning of what we call defined benefit plans.īut one problem then as now is that you have to stay with the same company long enough to be eligible for the benefits to kick in. This was an extremely valuable benefit, and the soldiers did not revolt after Augustus put this plan into place. If one of Augustus’s legionnaires was in active service for 16 years and in the reserves for another four years, he would receive a one-time payment worth about 12 times his annual wage. His solution was to prevent the revolt from ever happening by providing for his employees after they retired. His soldiers could be rowdy and unpredictable, and there had been rebellions in the past. In the year 13 BCE, the Roman Emperor Augustus had a problem, what would he do if his army revolted? This wasn’t an idle concern. On this podcast we breakdown the cognitive and emotional biases that influence your financial decisions and offer strategies to help mitigate those biases and help improve your financial outcomes. MARK RIEPE: Welcome to Financial Decoder, an original podcast from Charles Schwab. For more information about the SECURE Act 2.0, please read this article or speak with your financial consultant. Please note: This podcast may contain outdated information about RMDs and retirement accounts due to the SECURE Act 2.0, a law governing retirement savings (e.g., among other provisions, the SECURE Act 2.0 will raise the age at which individuals must begin taking required minimum distributions (RMDs) from their retirement account to 73, beginning in January 2023). Id="body_disclosure-media_disclosure-89711" (1222-240S) this article or speak with your financial consultant.
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