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10 Questions I Ask Before I Touch a Single Dollar of Your Retirement Account
Most sales reps have a retirement account. Most of them couldn't tell you what's in it, where it's held, or when they last looked at it.
That's not a character flaw. Nobody teaches you this. And when your income is variable and your focus is quota, "check on the 401k" rarely makes the list.
Here are the 10 questions I ask every client before I make a single recommendation about their retirement accounts. The answers tell me almost everything.
Question 1: Where is the money?
Old employer 401k, current employer 401k, IRA, Roth IRA -- or some combination you've never fully mapped out.
Sales reps job-hop. That's not a criticism, it's the nature of the game. But every time you leave a company, you leave behind an account that either sits there forgotten or gets cashed out at the worst possible time.
I've had clients with three or four old 401ks scattered across previous employers. They had no idea. You can't manage what you can't find.
Question 2: Is it pre-tax, Roth, or a mix?
Most people just know they have "a 401k." Very few know whether they've been putting in pre-tax dollars, after-tax dollars, or both.
This determines your tax situation in retirement -- and whether there are conversion opportunities right now that you're walking past every year.
Question 3: How much company stock do you own?
A lot of employer plans default into company stock, or make it easy to overweight it. Some reps actively choose it because they believe in where they work.
Here's the problem: if the company has a bad quarter, your paycheck and your retirement account take the same hit at the same time. I want to know how concentrated you are before anything else.
Question 4: What are your actual investment options?
A 401k is only as good as the fund menu inside it. Some plans have 30 solid low-cost index funds. Others have 8 mediocre options with expense ratios that quietly eat 1% of your returns every single year.
Knowing the quality of your options determines whether you stay put or roll the account somewhere with better choices.
Question 5: Do you have an outstanding loan on the account?
More common than people think, and almost always a problem.
If you leave that employer -- voluntarily or not -- the outstanding loan balance typically becomes due immediately. If you can't pay it, it converts to a taxable distribution. That means income taxes plus a 10% penalty if you're under 59 and a half.
People find this out the hard way.
Question 6: How far are you from retirement?
Everything else on this list changes depending on the answer.
Ten years out is a completely different conversation than thirty years out. Timeline drives asset allocation, risk tolerance, whether conversion strategies make sense, and how aggressive we can afford to be. This is the context question. Everything else builds on it.
Question 7: What other assets do you have, and how are they invested?
The retirement account doesn't exist in isolation.
If you have a brokerage account full of aggressive growth positions, your 401k allocation needs to account for that. If this is literally the only money you have invested, that changes things too. I need the full picture before I can say anything meaningful about one piece of it.
Question 8: What is your risk tolerance -- and does your portfolio actually match it?
This is where most people get surprised.
Stated risk tolerance and actual portfolio allocation are almost always misaligned. Either someone thinks they're conservative but they're sitting in 90% equities because they never changed the default, or they say they can handle volatility until the market drops 20% and they want to move everything to cash.
I ask the question. Then I look at the portfolio. Then I see if the answers match.
Question 9: What is your tax situation?
High income, variable income, commission-heavy comp -- this matters more for sales reps than almost any other profession.
You have years where income spikes and years where it doesn't. A down year is actually a window. If you're sitting on $300,000 of pre-tax retirement money and you have a flat Q4, that could be a Roth conversion opportunity that saves you real money in retirement. Most people miss these windows entirely because nobody is watching for them.
Are you married? Filing jointly changes the brackets. The tax question has more layers than people expect.
Question 10: What do you want this money to do?
This sounds obvious. Most people have never actually answered it.
Do you need income in year one of retirement? Can it keep growing for 20 more years before you touch it? Are you planning to pass it to your kids? Is this your only asset, or one of several?
There is no wrong answer. But there is a wrong strategy -- and that's building one without knowing what the money is supposed to accomplish.
Once I have the answers to all 10, the picture becomes clear. What to roll, what to leave, what to convert, how to allocate, where the risk is, and what needs to change.
Most people have never been asked these questions all at once. That's usually where we find the leaks.
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