401(k) Rollover Strategies for Effective Wealth Building

Investors should unify their accounts to maximize growth and achieve financial goals efficiently.

### Strategies for Maximizing Your 401(k) and IRA Investments
* 💰 "If you're making **8%**, and that's a very moderate... it's averaged **10% over time**."
* 📈 The question arises whether to perform an in-service rollover of a 401(k) to **consolidate funds into an IRA for better compounding benefits**.
* 🔍 It's important to note that having different accounts does not mean they can't **work together toward the same financial goal**.
* 🎻 Just like an orchestra needs all musicians to play from the same sheet of music, your various investment accounts should **align to optimize your financial strategy**.
* ⚖ In-service rollovers may not be allowed by all plans, so **understanding the pros and cons is crucial** before making a decision.
* 📊 If you consistently contribute to your investments, reaching the **$100,000 milestone** can set you on a path to building wealth **much faster**, with the last **$500,000 to your first million** taking **nearly two years less**.
* 🚀 Staying the course with your investments, especially during challenging times, can significantly **enhance your financial growth** through the power of **compounding**.

[Music] All right, Bron, you ready for the next one? Ready for the next one. This one is from Feedin with a pH. It says, I hear about the milestone of your first $100,000. Does it make sense to do an in-service rollover with my current 401(k) so that I have a large pool of money in my IRA to benefit from compounding? All right, so let me lay this out. I heard you say there's a milestone of having $100,000 invested. Well, does that mean I need to pull $100,000 out of my 401(k) so I can get that money working for me? That's the first part of the question, and I think there's like the subtle other part of the question that's, Hey, if I have a 401(k) or I have an old 401(k), what do I do with it? How do I navigate that? How do I manage that? So let's, um, first of all, we have a great resource. I tell you, money.com resources. We actually have

what happens if you have a 401k at an old employer. Now this is fedon. Is that how you said it? Yeah, that works. Um, was it sounds like they have they're trying to figure out how they get to that 100,000 and they're they're you know they're thinking this is a numbers game that it has to be in one account. So they're like even considering an in-service distribution from their 401K. The reality is is that here's the cool thing about math. If you bought the same investment in your Roth IRA say the S&P 500. You bought the same S&P 500 in your 401k at work and then you bought the S&P 500 in an after-tax sa you know investment account a brokerage account um you could add them all up and they would still be the same $100,000. Now look way they all be working for you. They all be working for you you know. Now they might be taxed differently because I just gave you three different tax buckets there but but that doesn't mean

that they're not still all working together. This is something we deal with all the time when we have prospects come in. It's always amazing to me that you'll see one spouse and their assets are like super conservative to the point that you can tell that they are scared to death to do any type of investing. Then you'll have another couple that is the wild west of all technology all the time. And you go, Hey, what are y'all, how are y'all looking at your assets together? And they're like, Oh no, no, no, we, we, we, we're not, we're not doing that at all. That's not us. They're scared. I'm kind of wild. I'm like, Y'all kind of need to think about this. Is that even though these are separate accounts, how do you consolidate to look at this as a whole so you can make sure you optimize, you maximize the opportunity of all those Army of dollar bill members that you have because you don't want to miss out.

you don't want to miss out, so I think one of the things every time and this in-service rollover is an interesting thing. So, a lot of plans won't even allow in-service 401K rollovers. If you're going to do that, you need to understand what are the pros and cons. If I move money out of my 401k into an IRA while I'm still working, is it valuable? Is it beneficial? Again, MoneyGuide resources, go check out our brand new deliver, it will kind of walk you through how to think through that. What are the questions I need to be thinking about? What are the things that I need to be looking at? Because it's not always the same. Even when you change jobs, sometimes it might make sense to leave one behind, or sometimes it might make sense to move it to your new 401k, or sometimes it might make sense to roll it into an IRA rollover. So, you want to make sure that you are well-informed of that decision. But I love what you said, Brian, the big

thing is you want to make sure that all of your soldiers inside your army are on the same page, working towards the same goal. You don't want to take any of them for granted and just have 15 different things and 15 different places moving in 15 different directions. We always use this example when we're talking with prospects. It's like if you had an orchestra and every member of the orchestra was playing a different sheet of music, all you would hear is noise. It would do nothing; it would not come out beautiful. But if you can get all those different instruments playing on the same sheet of music, well, what you can create is something beautiful. Our finances are no different. So whether you have IRAs or 401ks or taxable brokerage accounts or whatever type of investment vehicles you're using, if you can make sure that they're all working together towards the same common goal, there's a much higher likelihood of you hitting that goal in a much more effective and efficient manner also. And I don't want

to minimize that $100,000 bowling point. Because just check this out, guys. If you're making 8%, and that's a very moderate, you know, 'cause if you just did the S&P 500, it's averaged 10% over time. So you're using 8% just to ward off the trolls. If you were just putting a Roth IRA contribution in every year, you know, it's going to be right in between years nine and ten that you would hit that $100,000 mark. And you're like, Well, gosh, that's a lot of quit in between there. So, I don't know if I'd stay the course in nine or ten years, you know, during that nine to ten year period. But here's the reality. If you can stay the course and actually keep being consistent, keep putting that money in there, the last $500,000 on your journey to your first million dollars is going to be done almost two years faster, meaning that you're going to get five times the

wealth building two years faster than that first 100,000. That's the power of compounding growth. Get in there, let your money work, and do not quit just when the getting's getting good.

Should You Rollover Your 401(k) to Hit $100K Faster? (Here’s the Truth!)

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The questioner is considering an in-service rollover from their 401(k) to have a larger pool of money in their IRA for compounding.

The advisor explains that having the same investment in different accounts (401k, Roth IRA, and brokerage account) will still result in the same total amount.

The key is that all accounts can work together to grow the individual's wealth, even if they are taxed differently.

The Importance of Coordinating Financial Assets

Couples often have contrasting approaches to investing, with one being conservative and the other more adventurous.

It's crucial to consolidate and look at assets as a whole to maximize financial opportunities.

In-service 401K rollovers can be beneficial, but it's important to understand the pros and cons before making a decision.

Having all financial investments working towards the same goal is crucial for success, just like an orchestra playing from the same sheet of music.

Consistency in contributions, such as a Roth IRA, can lead to significant growth over time, with the last $500,000 towards a million dollars being achieved almost two years faster.

Staying the course and being consistent with investments is key to reaching financial goals effectively and efficiently.

Compounding growth can accelerate wealth building, potentially achieving the first $100,000 two years faster.

It's important to let your money work for you and to stay committed during the growth phase.

Consistency and patience are key to maximizing financial growth.