2017: All About The 401(k)

Joe Anderson, CFP® and Alan Clopine, CPA discuss why the father of the 401(k) regrets creating it. Plus, the worst mistakes you can make with your IRA and 401(k). Original publish date January 14, 2017 (hour 1). Note that content may be outdated as rules and regulations have changed.


Pure Financial Advisors, LLC is a fee-only Registered Investment Advisor providing comprehensive retirement planning services and tax-optimized investment management to thousands of people across the nation.

00:00 - Intro
01:46 “ I’ve got ten important considerations for 401(k) rollovers, and Ed Slott’s three fatal IRA (individual retirement account) errors.”
02:59 “Ted Benna, in case you don’t know, is known as the father of the 401(k) and we was a benefits consultant with Johnson companies, and he was among one of the first to come up with the notion that American workers should set aside their own pay pre-tax for retirement.”
04:02 “He and other early proponents dislike what the 401(k) has spawned. The tool was never meant to serve as the main means by which workers save for retirement, but that’s precisely what it’s become – it’s increasing the financial risk for workers along the way.”
08:25 “The other thing he doesn’t like about the 401(k) is he says ‘I helped open the door for Wall Street to make even more money than they were already making. That is the one thing I do regret.’”
11:36 “A majority of retirees rolled over their 401(k) to an IRA at retirement.”
14:29 “Let’s say you go back to an old company, you could roll all of your 401(k) into that new 401(k), that avoids the required distribution until you’re retired.”
20:03 “When you think of an appropriate globally-diversified portfolio with a rebalancing strategy”
22:57 “The true value-add of an advisor is to take a look at what the strategy is, what their plan is and coming up with the tax alpha if you will, because if you can reduce the overall tax liability of the income that you’re trying to produce, that’s more money – it’s a rate of return. If you look at rebalancing when markets go up and down or sideways to keep that risk parameter based on your goals – that’s huge.”
29:24 “Here’s another one (mistake) that’s irreversible. This is when you have a non-spouse rollover"

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• Intended for educational purposes only and are not intended as individualized advice or a guarantee that you will achieve a desired result. Before implementing any strategies discussed you should consult your tax and financial advisors.
CFP® - The CERTIFIED FINANCIAL PLANNER™ certification is by the Certified Financial Planner Board of Standards, Inc. To attain the right to use the CFP® designation, an individual must satisfactorily fulfill education, experience and ethics requirements as well as pass a comprehensive exam. Thirty hours of continuing education is required every two years to maintain the designation.
CPA – Certified Public Accountant is a license set by the American Institute of Certified Public Accountants and administered by the National Association of State Boards of Accountancy. Eligibility to sit for the Uniform CPA Exam is determined by individual State Boards of Accountancy. Typically, the requirement is a U.S. bachelor’s degree which includes a minimum number of qualifying credit hours in accounting and business administration with an additional one-year study. All CPA candidates must pass the Uniform CPA Examination to qualify for a CPA certificate and license (i.e., permit to practice) to practice public accounting. CPAs are required to take continuing education courses to renew their license, and most states require CPAs to complete an ethics course during every renewal period.