Mailbag | Backdoor Roth IRA, 4% Rule & 401k Strategies for Retirement Planning | With Rachael Camp | 521

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Nov 18, 2024

Rachael Camp, a Certified Financial Planner, joins to unpack essential retirement strategies. They dive into the backdoor Roth IRA, a clever option for high earners to bypass contribution limits. The conversation highlights the critical role of company matches in retirement accounts and offers alternatives for those without a 401(k), like HSAs and traditional IRAs. They also tackle asset allocation complexities and the importance of cash reserves to mitigate sequence of returns risk, along with key insights into real estate investing.

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ADVICE

Investing Without a 401(k)

If your employer doesn’t offer a 401(k), explore alternatives like a traditional IRA or a health savings account (HSA).
Review the contribution limits for these accounts to maximize your savings.

ADVICE

Company 401(k) Match

Prioritize getting your company’s 401(k) match, regardless of fund fees, as it's essentially free money.
Explore options for minimizing fees after securing the match.

ADVICE

Improving 401(k) Options

Advocate for better 401(k) options by contacting HR and presenting the impact of high fees on returns.
Suggesting index funds can potentially save employees a substantial portion of their retirement nest egg.

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Answering Listener Questions on asset allocation, retirement strategies, and the intricacies of real estate investing. With Brad Barrett and Rachael Camp. Whether you are pondering upon the backdoor Roth IRA strategy or seeking clarity on managing funds without a 401k, this episode is for you!

Public Service Announcement: Importance of filing the Beneficial Ownership Information form for legal entities by December 31st 00:01:21.
Mailbag Questions:
- How to Invest Without a 401k: Options include traditional IRAs and Health Savings Accounts (HSAs), while noting contribution limits. 00:03:43, 00:04:12.
- Company Matches in Retirement Accounts: Highlighted as a crucial opportunity to maximize savings 00:09:12.
- Backdoor Roth IRA: A legal way for high earners to sidestep income limits for Roth IRA contributions 00:15:09.
- Asset Allocation: Discussion on the complexities of asset allocation, particularly as one approaches retirement, and the impact of sequence of returns risk 00:24:07.
- Real Estate Investing: Key considerations and the risks associated with real estate investments 00:56:01.

Questions:

What can I do if my employer doesn’t offer a 401k?
- Consider options like a traditional IRA or a health savings account. 00:04:12
How do I manage sequence of returns risk in retirement?
- It's crucial to have a cash reserve and bonds as a cushion against market downturns. 00:26:36
What should I consider when investing in real estate?
- Understand cash flow, assess the market, and account for all potential expenses and vacancies to avoid risks. 00:58:08

Actionable Takeaways:

Review and potentially set up a traditional IRA if your employer doesn't offer a 401k. 00:04:12
Consider maintaining a cash buffer for the first few years of retirement to mitigate risks. 00:26:36
Maximize your retirement account contributions to include any employer matches. 00:09:12

"Avoid reverse dollar cost averaging by holding onto equities during market downturns." 00:39:28
"Company matches in retirement accounts offer unmatched returns—don’t miss out!" 00:09:12
"Explore diverse account types for effective financial management." 00:10:00

**Disclaimer

Please note: Rachael Camp offers advisory Services through Creative Financial Designs, Inc., a Registered Investment Adviser, and Securities are offered through cfd Investments, Inc., a Registered Broker/Dealer, Member FINRA & SIPC, 2704 S. Goyer Rd., Kokomo, IN 46902. 765-453-9600. Camp Wealth is not affiliated with the CFD companies.