37 minutes | Aug 28th 2020

EP143: Why You Should NOT Invest In Your 401K with Rebecca Walser

Wow - did someone just say that your 401k is a bad plan?


Rebecca Walser comes on the show to share with us why your 401k isn’t just hurting you...it’s actually KILLING your financial plan.

It all started back in 1978 when the famous 401k plan was in a way created by accident. Back in the late 1970s, most employers contributed to a defined benefit plan (AKA a pension) and that cost employers a lot of money.

During this same time, tax rates were much higher than they were today and some very highly compensated executives were looking for loopholes to avoid these high taxes. What they proposed was they could be bonused out in the form of a 401k plan, which allowed them to take their bonus, dump it into a 401k plan to avoid paying the high taxes now, and then grab that bonus money at retirement when taxes were much lower.

However, a few years later businesses started catching on and realized they would save millions upon millions of dollars by getting rid of the pension plan and moving to a 401k plan. Instead of having to fund a pension for years after retirement, they could offer a company match and have the employees contribute the majority to their retirement.

And that’s how the 401k became the retirement standard in today’s world...on accident.

But, it’s not 1978 anymore. Taxes are much different than they were then, the government debt is much higher than it was then, and there is a huge problem facing social security.

How are we going to pay for social security AND how are we going to pay off this massive $23 Trillion of debt?

Is it possible that taxes could go up from their all-time lows of 2017???

Wait a minute….if taxes are at an all-time low and we forecast we may need to raise taxes in the future to pay for the government's financial mess….then does it make sense to save in a 401k today?

Are we avoiding having to pay very low taxes today so we can pay much higher taxes in retirement?

In the interview, Rebecca and I talk about:

  • Conventional financial literacy and why it’s backwards for today’s world
  • The Social Security stats: the money is going to run out
  • Taxes and how they WILL affect you later in life
  • The history of the 401k and tax loopholes it once provided
  • How 4 out of 100 Americans will retire above the poverty line
  • Where you should be investing instead of the 401k
  • How to maximize your ROTH IRA using a conversion
  • And much much more...


Are you currently living on a plan for your life and money...AKA a budget?

The #1 habit of the most highly successful people is they are proactive. They don't wait for life and money to happen to them, they happen to their life and money.

If you haven't started yet, now is the best time to start living on a simple budget. It's time to be proactive.

Grab Free Budget Templates Here


Thanks so much for listening to the show and if you feel the content of this podcast was helpful, please subscribe and leave a review!


Today's show was brought to you by OneAZ Credit Union — my very own credit union I have been proud a member of since 2011. 

If you live in Arizona and are looking for a large credit union with a local, customer-focused feel for your personal or business banking needs, look no further than OneAZ Credit Union.


All the show notes, links and anything Rebecca and I mentioned can be found at https://www.moneypeach.com/session143

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