Why Should You STOP Investing Into A 401(k)? / Garrett Gunderson

[@Real.Estate.Report]

I started my 401k the day I turned 21. I'm 34 now and the balance is $220k. No regrets.

[@Dl824-cd]

Try pulling that 220k out of the market, oh wait don't you have to wait until your 59 and a half?

[@jla3rd]

@@Dl824-cd CARES act lets you pull out 100k. Penalty otherwise is 10%, not that bad after employer contribution

[@crack72]

@@jla3rd Cares act was an exception due to covid relief and that ended at end of 2020, maybe it will be allowed again in 2021. Typically you can't take out of your 401k without penalty if you take a distribution or depending on the institution and product you can take a loan against it but usually up to 50k max. After you really look into what qualified plans(401k, 403b,etc) are really doing, you will see that you are really saving for the government. Also if you have 220k and opportunities come up now or even 5 years from now, that money is not liquid.

[@jla3rd]

@@crack72 definitely agree that is why I pulled out my illiquid funds to invest in present day business cash flow. Cash today is immensely more effective then cash tomorrow

[@thegreat9481]

@@Dl824-cd you know its a retirement account right? You kno like after you work.....

[@FinancialSelfReliance]

I have been teaching similar stuff for almost 20 years, how is it I am only finding out about you in the last few months, Garrett? This is a great video.

[@williamnazario8987]

Dude your advice has changed my life. Keep up the good work. Much respect.

[@jonnewbury3482]

Hard to compare the Dave Ramsey model to this or Robert’s. Dave’s model is intentionally designed to be one sized fits all. It’s targeted for people who have poor credit/money habits. Comparing these philosophies is apples and oranges. No one can dispute both work, the DR camp are less risk tolerant.

[@tloftus2009]

The mortgage/debt point is truly relevant. I have been telling our children "Be concerned with consumer debt". Do not worry about your mortgage until mortgage is your only debt. Of all your debt, your mortgage is the cheapest. Yea it’s obvious, but not to everyone.

[@grumylynn]

This is mind blowing and so exciting to learn. It sounds like it makes sense to cash out enough from my SEP IRA (I'm a contract therapist) to fund my emergency fund, to start.. It makes so much sense, and I can actually feel relief just thinking about it.

[@GarrettGundersonTV]

I can refer you to people to help you walk through and think through the best ways. Just let me know.

[@mckinneysoutdoorservice1231]

Love how you keep it REEL

[@principled.not.pragmatic]

Why not just invest in a stock etf portfolio margin account and by term life insurance for a death benefit if you need it? You can borrow up to 80% from you stock account and hedge the account with put spreads. You can take a loan out the next day(not literally but you get the point). You cannot hedge an overfunded ULI policy and you said yourself that only 10% are structured for your benefit. I have listened to several videos about this self banking thing and still find no one able to say how to secure that your policy is structured right for you. This is not a back of the napkin idea. Could you provide a list of questions and demands that an average person can take to their insurance agent? I still have not seen an example of an overfunded policy that works without putting at least $120,000 in the first 5 years and you can only borrow about 1/2 of that in the 5th year. Thanks for thoughts.

[@CarolinaPerez-gz6br]

Mr.Gunderson isn't talking about using an IUL for cash value, but rather using a whole life inaurance policy. He has many videos with Chris from Life180 where he goes over this.

[@andrewnielsen8032]

Would love to see a video regarding this whole life insurance investment strategy, I've been learning personal finance for a while and nobody is talking about this!!

[@dienekes4364]

I have decided I'm against the 401k. I have one from the company that I've worked at for the last 11 years. It has about $150k in it. One big issue with the 401k is that you can borrow $50k or half, whichever is less AND you can only have 1 loan at a time (so you can't take out another loan until the current one is paid off). BUT (and that is a HUGE BUT!!!) you can only take out UP TO $50k over a year's period. I currently have a loan with a balance of about $20k. If I paid my current loan off, the MOST I'd be able to borrow is $30k and probably less because the balance of that loan _a year ago_ was higher than it is today. So I can't get the whole $50k until I paid it off and then WAIT A YEAR. That SUCKS!!!!

[@Frannieville]

The only way I could get a mortgage was by using my 401K. Best thing I ever did. Made my mortgage payment to my 401k and it was the same amount I was putting into the 401k in the first place.

[@GarrettGundersonTV]

That is a great story and a benefit of a 401k. Thanks for sharing.

[@danz1lla1]

How are you earning 5.32%?

[@markf.2050]

Will employers match your premiums you pay to the insurance company?

[@GarrettGundersonTV]

Not likely.

[@nivek204]

LOL, this guy is hilarious -- "market has been underperforming" **takes 50% increase the last two years**

[@jpavlik04]

Don't forget he says the math doesn't correspond to the money...ridiculous

[@dienekes4364]

My company funds a fraction of my 401k. The _most_ I can get is 50% if I contribute 6%. If I only contribute 3%, I only get 1/3 of that added from the company. It's all my money, I'm 60 years old, and I still can't touch it. That's TOTALLY BS!!!

[@deacontheseer4804]

You can withdraw at 59and a half without penalty. But don't just take my word for it.

[@dienekes4364]

@@deacontheseer4804 Apparently not until I'm not working at this company anymore. At least for my account with Merril Lynch.

[@deacontheseer4804]

@@dienekes4364 But I have done this several times. I am 62. But I am with Mass Mutual. I thought this was the rule for any 401k.

[@dienekes4364]

@@deacontheseer4804 That's awesome. So, apparently, it depends on the way a company sets up the 401k. Good to know, for sure. Thanks for the feedback! I appreciate the info.

[@deacontheseer4804]

@@dienekes4364 No problem glad to help. This has been a life saver since the pandemic. You don't have to borrow. They will of course take out handling fees and taxes but if you're like me I need my money 💰 now .lol

[@4eyecandy]

Which design do you recommend: 10/90, 70/30 or 60/40?

[@a1ironzyzz673]

Depends what age you are and how soon you need your money. If you plan on living 20+ years you don't want a 10/90 you sacrifice not only much higher Death Benefit but CV growth in the later years. 60/40

[@4eyecandy]

@@a1ironzyzz673 Thanks for your response!

[@LatriceR]

You guy talk about cash value but the collateral is your insurance policy. It’s very dangerous to not pay back that cash value and lose your death benefit at double the rate the cash value earns! Why not get a cheap term and invest separately?

[@harrisontrevor2079]

Dont know anywhere where you can get 5 percent interest tax free?

[@georgeallred4617]

I think they're referencing the "infinite banking concept". Because it's life insurance it's cash value is tax free

[@Thanosisnotreal]

“17%... 22%... your 401k isn’t making that” ya mine has returned over 53% ytd 🤷‍♂️

[@scarysunburns7733]

Good job M2 money stock increased 40% in 2020 and inflation is 5.4% year to date which is a very conservative estimate and we are in August. Add in the taxes you’ll pay if you have to touch it before 57.5 which the odds are extremely high per the statistics of how many families encounter financial hardship before then. In terms of what 53% returns gets you in amount of consumer goods despite increasing prices……I guess you get to decide that. Long story short, be able to ask yourself are you really getting wealthier or is it all just paper gains to entice you to fund your retirement more for when life or the market inevitably rugs you. I’ve seen way to many guys in their 50s who never recovered from 2008 even after record market returns since then

[@Thanosisnotreal]

@@scarysunburns7733 agreed, we all have choices to make. Hope 🤷‍♂️

[@sdrtyrtyrtyuty]

My 401K made over 50% return last year and like 30% in 2019. Over the last 10 years it is averaging 25-30%. High cap stock mutual fund. Why would I pay off a loan? Obv this isnt sustainable forever but still you will be paying a penalty to withdraw early. Not worth it IMHO. If I was averaging 3-6% then how stupid must you be to not see the obvious and think that investing is the better option....

[@dargosinger]

Is this nothing more than a sales pitch? How is earning an instant 100% return on investment a losing proposition? More detail less vague waffling.

[@joshhoward1289]

Someone who owns their own home becomes unteachable...wow...what a terrible conclusion.

[@chessmaster1115]

Yea what the heck? Sounds like an angry rant against those that accomplished something.

[@Michael-qy1jz]

I Disagree!!, Pay off your Main Home because its alm ou st impossible for anyone or any entity can get it in lawsuits, bankruptcy etc! 401ks can not be taken in lawsuits and bankruptcy.

[@jrritzer706]

What about if you owe to the IRS, Child Support, or Divorce?... You are not protected from that. A permanent life insurance policy is safe from any of that situation.

[@Michael-qy1jz]

@@jrritzer706 The IRS will attach to your house but not take it unless you committed tax fraud, they wont take it for just owing from my understanding, but they will collect when its sold for. The lein. As far as I know in most states, they can not come after your homestead for child support etc, but you should be paying it. You pay off your main house and invest after that. Your much likelier to go bankrupt from medical Bills, credit cards and etc.

[@jrritzer706]

@@Michael-qy1jz I support the whole idea of owning you home, but like Garret said sitting all your money inside your property is not as beneficial as using the extra cash to invest and generate cash flow. By the way is not my personal case to owe the IRS or Child Support, but the message was that they are better retirement vehicles than a 401k and with even more benefits.

[@Michael-qy1jz]

@@jrritzer706 I have dozens of rentals myself and I'm invested in lots of different things and I can say definitely have your home paid off first. I watched all my buddies in rentals get wiped out in 07 to 2010 and none of them did what I said and had thier homes paid for. They were buried and nothing to show for it! What we are witnessing now is the largest pump & dump scheme in world history so soon after the last one of 08, people and institutions will get decimated. I am not saying be cash poor to pay off your home, I'm saying all these investments right now have massive risks and I would hold cash and or pay off your primary home first before I gambled it away. Every extra payment you make on your primary home is tax free gains that have a huge shield from liability.

[@jrritzer706]

@@Michael-qy1jz agreed. If you already making the money to pay off, definitely it's worth it. My opinion was based on buying a home and your only income is your job. Here's where i recommend to find an additional source of income before paying off your mortgage, rememberr your still need to cover your home taxes, insurance, utilities.

[@cjv512vasquez]

Poor advice in my opinion. Not sure how they are getting the 3%-6% number for stock market return... Pitching a whole life policy really?