Ep 9: Mailbag – 401ks, Mutual Funds and Inflation

Today, we’re answering your most pressing financial questions about 401ks, mutual funds and inflation. Let’s jump into the mailbag.
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Show Notes For This Episode

On this episode of Saving the American Dream, we’ll answer your mailbag questions about all things finances.

I need about $5,000 to live on a month in retirement. My Social Security is about $5,300, coupled with my pension. Can I leave my entire 401k to my son?

Assuming you’re 65, most likely not. You need to consider cost of living increases in the future. Twenty years from now, is $5,000 a month going to spend like $5,000 a month? The answer is probably not. It may spend like $3,000 a month.

We also don’t know what health-related expenses you might have during retirement.

Should I be worried about inflation in the future?

Inflation was significantly higher in the 1970s and 1980s than it is now. So, historically inflation has been a lot higher. At the very least, it’s likely we get closer to historical norms as we move forward into the future.

Should mutual funds return more than 10% a year?

You shouldn’t be counting on getting 10% or 12% in your mutual funds. If you are actually getting 10% in your mutual fund, that’s what you’re receiving after fees and taxes that you’re paying.

You can’t invest money for free. There’s going to be a series of costs that are associated with your mutual funds that you own from the expense ratios of the mutual fund itself, to the internal costs of the trades.

Listen to the full podcast or use the timestamps below to jump to a specific section.

Navigating the Show

[2:06] – Can I leave 401k to son?

[6:55] – Worry about inflation?

[9:04] – Mutual funds

[14:05] – Investing

[16:54] – Max out 401k and Roth?

 

People are living significantly longer, which has been a driving force of why pensions have gone away.

– Michael Schulte

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Copyright 2020 Saving The American Dream Podcast. Michael Schulte is an investment advisor representative and certified exit planner with WestPac Wealth Partners, located at 330 South Center Street, Suite 344, Casper, Wyoming 82601. The podcast is for informational purposes only. Individual risks and investment objectives must be reviewed prior to making any recommendations. Podcasts are for informational purposes only. Any guest speakers and their firms are not affiliated with or endorsed by PAS, Guardian, or WestPac Wealth Partners and opinions stated are their own. Guardian, its subsidiaries, agents, and employees do not provide tax, legal or accounting advice. Consult your tax, legal, or accounting professional regarding your individual situation. Michael is a Registered and Financial Advisor of Park Avenue Securities LLC (PAS). OSJ: 5 Centerpointe Dr Suite 150, Lake Oswego, OR 97035, 503-207-4550. Securities products and advisory services offered through PAS, member FINRA, SIPC. Financial Representative of The Guardian Life Insurance Company of America® (Guardian), New York, NY. PAS is a wholly owned subsidiary of Guardian. WestPac Wealth Partners is not an affiliate or subsidiary of PAS or Guardian. 2020-105459 Exp 07/22.