BRIDGEPORT, W. Va. Question: You appear to be the most knowledgeable advisor in the area in regards to company benefits. I am a Frontier employee currently contributing 4% to my 401K on a pre-tax basis. I would like to up that to 8% in 2019, where should I put that money?
John Halterman Answer: I appreciate the feedback, and the reason why we know so much about company benefits is because over 20 years ago we took the time to actually read the plan document of all the companies in the local area, and basically what we found out was there were not a lot of experts that understood how the 401Ks work, how the disability plans, and how the various benefits offered by these companies work. I got to tell you, Frontier is a unique animal. You actually have a lot of different options. You know, there are a couple things that you can do at Frontier, you can do the pre-tax, you can do the after and the Roth, you can also do the rollover where you can take the money out of that plan before you retire, and in addition to that, you actually have a brokerage account inside of there, inside of the Fidelity account, in which you can actually choose whichever you would like. So, a couple thoughts. Number one, I always tell people take all of the free money you, and when I say free money, I mean taking advantage of the match. Right now, Verizon matches up to 6%, so you’re only putting 4%, so what I would definitely do, is get all their free money and definitely contribute up to 6%. Now, after 6%, I do not believe there is any reason why that person should put that money into a 401k, simply because there’s not a lot of options. Now, things I would consider, if you are a family making under $200,000, I would consider looking at the other free money. The other free money is the free money that the government gives us, and when I say free, I mean tax-free. I would consider putting that money into a Roth IRA, one of the things we do with Frontier employees all the time, is they like payroll deductions, so we have their payroll deducted to their credit union, and from there, we do a bank check draft, basically it allows them to do the exact same thing. They've always wanted to have the convenience of a payroll deduction, and at the same time take advantage of double free money. The free money from the company and the free money from the government.