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The Clark Howard Podcast

01.24.25 Clark Answers His Critics on Clark Stinks / Job Change and Your 401(k)

Jan 24, 2025
This installment dives into the funny and insightful 'Clark Stinks' segment, where listener feedback takes center stage. Clark also tackles the pitfalls of changing jobs and how it can lead to significant losses in 401(k) savings. Discover crucial tips on avoiding costly retirement mistakes, plus comparisons between Roth and traditional accounts. The episode touches on maximizing college savings through 529 plans, offering practical advice for parents. It's a blend of humor, personal stories, and valuable financial wisdom!
36:08

Podcast summary created with Snipd AI

Quick takeaways

  • Many individuals neglect to increase their 401(k) contributions after job changes, despite typically receiving a 10% pay raise, impacting their retirement savings.
  • Choosing between Roth and traditional retirement accounts hinges on understanding pre-tax versus post-tax contributions and anticipated tax brackets at retirement.

Deep dives

Job Changes Affect 401k Contributions

When changing jobs, many individuals fail to adjust their 401k contributions despite typically receiving a pay increase. Statistics reveal that new jobs often pay around 10% more than previous positions, yet new hires frequently contribute less to their new employer's 401k plans than they did with their former employer. This behavior is concerning because contributing a higher percentage to retirement savings after a job change can greatly enhance one's financial future. It is advised that individuals increase their 401k contributions in line with their pay raises to secure a more comfortable retirement and avoid relying solely on Social Security benefits.

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