Business Innovators Radio - Interview with Joyce Palmer, Founder and President of JP Financial Group, Discussing 401k Tips and Strategies

Episode Date: June 27, 2024

Joyce Palmer, the managing partner of JP Financial Group LLC, is a force to be reckoned with in the world of finance. With a dedicated focus on serving women, Joyce is committed to creating financial legacies and empowering women to take control of their financial futures. As a joint owner of JPFG Wealth Management LLC, she brings a wealth of knowledge and expertise to her clients.With over two decades of experience, Joyce understands the unique financial challenges and opportunities that women face. Her own life experiences have shaped her perspective, as she recognizes the impact of gender on financial decisions. Joyce firmly believes that women have distinct needs, considering their longer life expectancy and the likelihood of living alone as widows or divorcees. She is passionate about providing tailored financial solutions that address these specific concerns.What sets Joyce apart is her genuine dedication to her clients. She actively listens to their needs, concerns, goals, and objectives, ensuring that their voices are heard and understood. Joyce takes pride in building strong personal connections with her clients, offering a level of empathy and relatability that fosters trust and confidence.Joyce’s commitment to continuous learning and professional development is evident in her impressive credentials. She holds a BA in Business from Virginia State University and has completed extensive studies and certifications in income planning strategies, social security benefits, estate planning strategies, and long-term care health insurance. This diverse knowledge base allows her to provide comprehensive and well-rounded financial guidance.Beyond her work, Joyce is actively involved in giving back to her community. She serves on the board of directors for The Charlotte Post Foundation and Faith in Action Community and Education Transition Services (F.A.C.E.T), a nonprofit organization that supports women and children transitioning from homelessness towards independence. Joyce’s passion for empowering women extends beyond the realm of finance, making a positive impact in the lives of those she serves.If you’re ready to take control of your financial future and work with a financial professional who understands your unique needs, Joyce Palmer is the trusted advisor you can rely on. Contact JP Financial Group LLC today and embark on a journey towards financial success and empowerment.Learn More: https://jpfinancialgroupllc.com/Influential Entrepreneurs with Mike Saundershttps://businessinnovatorsradio.com/influential-entrepreneurs-with-mike-saunders/Source: https://businessinnovatorsradio.com/interview-with-joyce-palmer-founder-and-president-of-jp-financial-group-discussing-401k-tips-and-strategies

Welcome to influential entrepreneurs, bringing you interviews with elite business leaders and experts, sharing tips and strategies for elevating your business to the next level. Here's your host, Mike Saunders. Hello and welcome to this episode of influential entrepreneurs. This is Mike Saunders, the authority positioning coach, and today we have back with us Joyce Palmer, who's the founder and president of JP Financial Group, and we'll be talking about 401K tips and strategy. strategies. Joyce, welcome back to the program. Thank you, Mike. I am excited about being back on your program. Thank you. You are welcome. And I think that a lot of times people just mentally check a box of 401K, nothing I need to know or think about because it's with my company. Is that a good strategy or not? Probably not. Definitely not. Definitely not a good strategy. I think that's probably

one of the biggest things that I hear in our firm when we're meeting with clients is that I have a 401K, but I don't really know what's in it or what it's doing or do I need to do anything to it? It's on auto pallet, right? Yeah. No, exactly. Yep, that's a great, great point. So then when you think about, you know, like sometimes some things really are on autopilot while you're with the company, meaning, you know, you can only have certain allocations and pick certain things and sectors and all that because of how it's set up.

But typically that is the true problem comes in when you go, hey, I'm moving on from one company to the next. And you kind of think, oh, I'm just going to leave my 401K with that old employer because it's 401K. it's a it's an account. Is that a good idea or there's some risks in in leaving a 401k with an old employer? Yeah, there are definitely some risk with leaving it with the old employer. I always say there's pros and cons to everything almost, but definitely one of the biggest concerns if you're leaving the 401k with an old employer is that you are really exposing yourself to several risk. One is that you're going to lose track of that account. Too often, people come in and they say, I think I have an old 401k with a company I work with, but I don't remember. And if you switch jobs a couple of times, then you could lose track of a couple of 401ks. And in a long run, that could mean a lot to your retirement dollars. So that's one thing. You definitely cannot keep a track of it. But secondly, the old 401k plans usually or may have higher fees.

They may have higher fees compared to other investment options that you could go with. So that's another reason why you don't want to usually leave the old 401K plan at the old employer. And also, wouldn't there be some aspects of like maybe it's not, I mean, I guess it's being managed the same way as when you're there. they don't know who's there and who's not as just the fund. But there's those kind of risks where maybe there's even a better, you know, you think about something. If you rolled it over into the new employers planned, then they could have a better 401K. But if you were moving from one company to the

next, should you consider rolling it into another kind of a plan other than a 401K? Sure. You would definitely want to consider rolling it over into an IRA. My philosophy is that if you, no longer work there, then your money should not be there either, right? When you go, your money should go with you. So rolling it over into your own 401, into your own IRA account gives you a lot more options as far as what you can invest in, a little bit more control, obviously, over the money, because it's with you and your position with an IRA. So you can avoid having that situation where you are incurring additional fees outside by leaving it in the old 4-1K. Yeah.

Yeah, that's a good, that's a good point. What about what about the idea of rolling into an IRA? I'm sure there's some people that would say that's a great idea. And some people would say, no, that's a bad idea. Right. So for every pro, there's a con, right? rolling over an old 401k into an IRA, there's some pros and that you have a wider range of investment options. You can choose from.

You have potentially lower fees, and that's definitely good. But you can also consolidate multiple retirement accounts. So if you've had a couple of different jobs and you have a couple of different old 401Ks, you can combine them now into one IRA. so that way you're able to, you know, get more leverage. And like you said, for every pro, there's some cons. Some cons would be, for an example, the IRA may be less creditor protection, rather. It may not be as much protection on it with another type of IRA or rolling it out. And there may be some tax implications.

There's always some tax implications, depending on how old you are. are and what you do when you take the money out of the old 401k, there could be tax implications as well. Yeah, yeah, that's a really good point. What are some other, well, I don't want to go too deep into tax implications because that can be a whole other conversation, but what are some of the high-level things people need to keep in mind with that? Because before you do any kind of a transfer rollover, you need to realize, is there going to be some type of a penalty or a taxable event? Right. So one of the things you don't want to do is you definitely don't want to cash out the 401k and put the cash in your hands. That's definitely usually a no-no, especially if you're nearing retirement and you're going to need that money for long term for your retirement money. So sometimes we'll see people cash it out, unfortunately, and take a big huge tax hit as well, especially if they're under 50. nine and a half and they tax, they take those funds out of the 401K.

Now they're subject to not only taxes, but tax penalties as well. Yeah, for sure. So then what about any other kind of accounts other than rolling into a 401K or an IRA? Are there other things that people could consider rolling into just for an option? Yep, they can. I'll actually share a story. We have, I love stories. They always kind of give you an example of what you don't want to do when it comes to the 401K.

So I call this one the forgotten account, Sarah, who was a nurse. One of our clients came in and sat with us. She was in her late 40s. And her goal was to plan for an early retirement. So when we started talking to her about retirement planning, she mentioned casually that she had an old 401k plan from a previous employer that she hadn't thought about in years and forgot about it. So that's where the first problem comes in. When you leave it there, you may forget. So in the conversation, she says, yeah, I think I have an old 401K.

So that immediately sparked me to think that we may know. need to investigate the status of that old 401k. When we did that, we found out that, yes, she did have an old 401k, and the fees were extremely high. So the first thing is the old 401K plan, in some cases, have higher fees. So a lot of her return was being eaten up with those higher fees. then we looked at her investment options. She had very few investment options in this 401K. It was a smaller company, so their options were not that great. So she had limited options, and they were out,

most of them were underperforming options as well. Another problem. And then lastly, we share with Sarah how she missed out on the opportunity to have that money working for her over those. years that that old 4-1K was sitting there. So there was some regret, of course, but the, you know, the call to action was to now let's look at options of what you can do with that 04-1K. So one, she could certainly roll it over into a IRA, individual retirement account. Another option that we looked at because she was planning for retirement, and this was money that

she wanted to use to supplement her retirement income along with Social Security as we talked about creating a private pension and using the 401k money to create a private pension. So the private pension would give her the opportunity to roll it over, not be taxed because it's a rollover, but now position that money for future income that would give her a guaranteed income stream in retirement. So she was. excited about that. And lastly, we just, you know, talked about the fact that all 401Ks are funds that in many cases could make the difference between you having a really nice retirement nest egg or having less than that. So in this case, we were able to kind of pull that back in place for her and allow

her to have more dollars for her retirement. Yeah. Yeah. That's a very good. You know, like you said, I find that stories really help and that's really important. I like the sound of private pension because I think a lot of times people go, pensions don't even exist anymore and they're, you know, they're out there, but really rare. Having something where you can set up your own private pension gives me the feeling that you're in control and it benefits you more than the company. So I think that is just such a neat way to think about that.

Yeah, it is. This definitely gives you, like I said, people love Social Security because it's a guaranteed predictable income stream. Well, the private pension does exactly the same thing. It gives you a guaranteed predictable income stream. And who wants to, you know, run out of money when they're in retirement? Nobody. A hundred percent.

Yeah, that's a, that's a really good point. Nobody wants that. And it's not, sometimes it's not what, something. you can, you know, uh, plan for or under, because you got inflation, you've got taxes and things like that, but you've got to at least do the, the best you can on the front end to plan for that. Exactly. So what about actually cashing out of a 401K if you, if you, you know, left a company, uh, if you're near retirement and you just said, you know, I'm confused about rolling it into an IRA or a private

pension that, I don't understand it. just give me the cash. What are some of the benefits or drawbacks of that? Yeah, it's sometimes it may appear to be very appealing to be able to cash that money out and have immediate access to the funds, especially if you have some urgent expenses or needs. But I would advise you to try not to do that. Because again, when you pull that money out cash, there are some. tax implications. And one, if you're not yet retired and you pull it out, that's money now that you're taking from your future retirement account. So as appealing as it may appear to have that

cash in your hands, just be cautious to know that you are running the risk of hitting some tax consequences as well as you're tapping into your long-term retirement dollars. And that may not be good. Yes, 100%. And if you're too close to retirement when that happened, when that happens, you might not have the runway or the time to recoup those losses and from maybe the tax hit or the penalty and things like that. Exactly. Yep. If you're too close to retirement, you're not going to have time to recoup.

And if you're further away from retirement, you may be putting yourself in another tax bracket. Speaking of taxes, which like you said is a whole other show. But taking that early, you know, taking that cash out of that 401K could bump you into another tax bracket, which is a whole other financial situation to address. 100%. Well, I think that just makes so much sense. And I think that's a really insightful approach to handling 401Ks. When you've left it at another company, how to best handle that and not cash it out and put it into the right vehicle for you. what, there is not one answer that is right for everybody. Because I'm certain that you would not say, here's your solution. Next.

And then the next person comes in and you say, here's your solution. So I think that's something important for people to realize. Everyone is different. Everyone has different needs, outcomes, futures. They're at a different age. They're going to retire to a different age. And so if you are looking to execute something like we're talking about here, It is just literally, let's see what is the best thing for you.

And then someone like Joyce can look at it and give you some guidance. Exactly. It's all about the plan. So the 401K is just one piece of the puzzle to your overall retirement plan or your retirement blueprint. And making the best decision on that is important that you look at all of the moving parts. And the old 401K, your existing 401K, your long-term health care needs, all of that, again, pulls together the plan. So no one scenario or no one situation works for each person. It's unique to that individual's situation.

Yeah, 100%. Well, I think that's so insightful there. Joyce, if someone is listening to this wondering, maybe I can get some guidance. ahead of my 401k decision, what's the best way they can learn more and then also reach out and connect with you? Sure. They can go to my website, JP Financial Group, and that's www.jp Financial Group, www.com. I would also invite them to take a listen to our podcast, the Proactive Women Podcast.

I believe we actually have an episode that we did, Mike, addressing 401K rollovers and the pros and cons and what to do. So we have a lot of great podcasts. So I would invite them to listen to that as well. And then it can certainly just give us a call. 7362-69. Excellent. Well, thank you so much, Joyce. I really appreciate you coming on.

And it's been a real pleasure talking with you again. Thank you, Mike. You've been listening to Influential Entrepreneurs with Mike Saunders. To learn more about the resources mentioned on today's show or listen to past episodes, visit www. www.influentialentrepreneursradio.com.