YFP 408: What Should You Do With an Old 401(k)?

What should you do with an old 401(k)? Tim Ulbrich and Tim Baker explore your options, common pitfalls, rollover strategies, and how to make smart moves with old retirement accounts after leaving a job.

Episode Summary

When you leave a job, what happens to the retirement account you left behind? In this episode, YFP Co-Founder & CEO, Tim Ulbrich, PharmD, and YFP Co-Founder & COO, Tim Baker, CFP®, RLP®, RICP®, take a deep dive into the important financial decisions surrounding old employer-sponsored retirement plans, such as 401(k)s and 403(b)s.

Tim and Tim discuss the impact these often-overlooked accounts can have on your overall financial plan and explore your available options, whether that’s leaving the money in your former employer’s plan, rolling it over to your new employer’s plan, or transferring it to an IRA.

They break down the pros and cons of each approach, highlight common mistakes like the “set it and forget it” trap, and explain why understanding fees and account access is so important. The conversation also emphasizes the value of working with a fiduciary advisor and the serious risks of cashing out these accounts too soon.

To complement the episode, they introduce YFP’s new guide: The Best and Worst Moves to Make with an Old 401(k), designed to help you avoid costly missteps and feel confident in your next move.

Whether you’re changing jobs, planning ahead for a career transition, or simply want to be more intentional about your retirement savings, this episode will give you the clarity and guidance you need.

Key Points from the Episode

• 00:00 Introduction and Episode Overview
• 01:15 Sponsor Message: First Horizon
• 02:23 Discussion Begins: What to Do with Old Employer Retirement Accounts
• 03:35 Importance of Managing Old Retirement Accounts
• 05:53 Options for Old 401(k) and 403(b) Accounts
• 12:58 Pros and Cons of Leaving Money in Old Plans
• 19:18 Rolling Over to a New 401(k)
• 27:31 Understanding Asset Location and Allocation
• 27:47 Rolling Over to a New Employer’s Plan
• 28:04 Advantages and Disadvantages of Consolidation
• 29:50 Rolling Over to an IRA: A Common Approach
• 30:27 Investment Options and Flexibility in IRAs
• 33:44 The Importance of Transparency in Financial Services
• 46:23 Considering All Options for Old Retirement Accounts
• 47:22 Conclusion and Additional Resources

Episode Highlights

“ These employer-sponsored retirement plans may seem like old news, especially if you’ve been in the workforce for a while, but what you do or don’t do with them can have a lasting impact on your  financial future.” – Tim Ulbrich [00:23]

“As your career continues, a 401k or if you rolled into an IRA will be one of the largest things on your balance  sheet over time.  So it’s really important to have an intentional plan with how you’re gonna manage these assets and how do they fit in the overall picture of your ability to build wealth and then to spend that wealth like in retirement.” – Tim Baker [7:23]

 “ If you’re actively contributing to a 401k, the action of rebalancing kind of happens naturally every time you get paid and put money in if you leave that job. And that money’s  just sitting there. The market does what it does, so that  that asset loca, that asset allocation that you set will drift because you’re not actively putting money into it.” – Tim Baker [11:50]

Mentioned in Today’s Episode

• First Horizon’s Pharmacist Home Loan
• Your Financial Pharmacist
• YFP Guide: Best & Worst Moves to Make With an Old 401(k)
• FIRE Rx: The Pharmacist’s Guide to Financial Independence
• YFP Episode 404: 5 Key Questions to Ask Before Hiring a Financial Planner
• Reference: 2024 Kitces Report on Financial Planning

Episode Transcript

Tim Ulbrich: [00:00:00] Hey everybody. Tim Ulbrich here, and welcome to this week’s episode of the YFP Podcast where we strive to inspire and encourage you on your path towards achieving financial freedom. Whether you’re transitioning to a new job or just taking a closer look at your finances. One of the most overlooked but critically important pieces of your retirement plan is your old 401k or 4 0 3 B account.

Tim Ulbrich: These employer-sponsored retirement plans may seem like old news, especially if you’ve been in the workforce for a while, but what you do or don’t do with them can have a lasting impact on your financial future. In this episode, we’re diving deep into what happens after you leave a job and what your options are.

Tim Ulbrich: When it comes to your old 401k or four oh through B, we’ll tackle why it’s so important not to let these accounts fall into, set it and forget it mode. Explore the pros and cons of common rollover strategies and break down how fees, fund options, and even asset protection rules differ between the options.

Tim Ulbrich: [00:01:00] And finally, we’ll help you think through whether this is something you want to manage on your own, or if it might make sense to partner with a fiduciary advisor who can help you align this decision. With your broader financial plan and goals, before we jump in, let’s hear from today’s sponsor. First Horizon.

Tim Ulbrich: First Horizon is a paying sponsor of this episode of the Your Financial Pharmacist Podcast.

Tim Ulbrich: The saving 20% for a down payment on a home feel like an uphill battle. It’s no secret that pharmacists have a lot of competing financial priorities, including high student loan debt, meaning that saving 20% for down payment on a home may take years. First Horizon offers a professional home loan option, a KAA doctor or pharmacist loan that requires a 3% down payment for a single family home.

Tim Ulbrich: Or townhome for the first time. Home buyers, 5% for non-first time home buyers has no PMI and offers a 30 year fixed rate mortgage on home loans up to 8 0 6 500 in most areas. The pharmacist’s home loan is [00:02:00] available in all states except Alaska and Hawaii, and can be used to purchase condos as well.

Tim Ulbrich: However, rates may be higher. A condo review has to be completed. To check out the requirements of Pharmacist Home Loan through First Horizon, and to start the pre-approval process, visit your financial pharmacist.com/home-loan. Again, that’s your financial pharmacist.com/home-loan. Tim Baker, welcome back to the show.

Tim Baker: Good to be back. What’s going on, Tim?

Tim Ulbrich: I am looking forward to the discussion. Uh, today we’re gonna talk about, uh, a question that really comes up often in pharmacists that both you and I have a chance to converse with, which is, you know, what, what do I do with an old employer retirement account? Uh, it could be the first job transition or the fifth job transition, but you know, often, we’ll, we’ll have these 4 0 1 Ks or these 4 0 3 Bs and.

Tim Ulbrich: Wondering, like, what, what should I do with them? Should I leave them? Should I move them? And so today we’re gonna talk about the different options, some of the pros and cons of what you might do with those accounts. [00:03:00] Um, before we get too far into it, we have a brand new guide that we’ve released, uh, titled The Best and Worst Moves to Make with an old 401k.

Tim Ulbrich: You can download that guide, which is a, a supplement to today’s episode. Go to your financial pharmacist.com/moves. Again, your financial pharmacist.com/moves. And a shout out to Jeff Kimer, uh, pharmacist at. Has collaborated with us on, on several, uh, writings. He wrote the book, fire Rx, the Pharmacist Guide of Financial Independence.

Tim Ulbrich: He helped us put together the content for this guide, uh, as well, just an, an overall, uh, community pharmacist, uh, money nerd. So shout out to Jeff for his help in, in putting together this guide, Tim, this topic probably I would suspect, is you’re, you’re conversing with, uh, pharmacists that are. Wanting to learn more about our fee only financial planning services.

Tim Ulbrich: I’ve gotta believe that this is one that comes up fairly often. Is that, is that correct?

Tim Baker: It does. One of the things that, you know, when I talk to a prospective client that is [00:04:00] in transition, it’s like, you know, I’m unsure what the best. Path is for, you know, my old 401k, or, you know, some people, you know, make the habit of collecting 4 0 1 Ks or 4 0 3 Bs, and they’re just kind of scared,

Tim Ulbrich: Mm-hmm.

Tim Baker: So, you know, what is, what’s the best, you know, path for me and what should I do with those, with those plans. So, yeah, it’s important because as you, if you think about it, Tim, like, you know, 401k, 4 0 3 B. You know, often outside of your house, and then eventually it will eclipse the value of your, your house in terms of like the, the biggest asset on your

Tim Ulbrich: Mm-hmm.

Tim Baker: is a big really over the course of your career in terms of like what to do with, you know, your, your 401k, especially when you leave an employer. Um, You know, I think it’s important to analyze and examine and just try, try to figure out what, what’s the best thing for [00:05:00] you to do.

Tim Ulbrich: Yeah. And especially, you know, I think about the, the job transitions that may happen, it’s, it’s rare to see someone now that’s worked with the same employer, you know, for 20, 25 years, right? So if, if you’re changing jobs every 3, 4, 5 years, which can be pretty, pretty normal, uh, you know, you’re gonna start to, to accrue several of these accounts.

Tim Ulbrich: And what are the options that we have to do with them along the way and. We’re gonna talk about 401k, 4 0 3 B interchangeably. They are similar, yet different. Uh, we’ve covered that on on previous episodes. Both of them are employer-sponsored retirement plans. Typically, we think 401k. Those that work for a for-profit, 4 0 3 B, those that work for a, a non-profit or thinking about something like A TSP for those that work for the federal government.

Tim Ulbrich: So we’re gonna use those terms interchangeably, but they’re not. Not the same thing. There are important differences, uh, between them, but for the sake of the conversation of job transitions and what do I do with these accounts, we’re gonna lump, lump both of them together. Tim, before we get into the options.

Tim Ulbrich: Let’s cast a vision for, for why this is [00:06:00] important, right? When I think about my own experiences, you know, uh, fir first job or two specifically thinking back to a memory of, of Jess’s, uh, old 4 0 3 B, that was kind of hanging out there. And, you know, after a while we, we didn’t really remember kind of what, what was there.

Tim Ulbrich: And we, we were moving on to the next account. We left it at the time being, we would eventually do a transfer, uh, and a rollover that we’ll talk about in this episode. But when I think about the, the potential. Consequences here, things come to mind like, hey, it’s, it’s outta sight, outta mind, which means we might not just be paying a attention to it like we are, uh, other accounts and, and therefore it might not be optimized in, in the same way that we’re treating our other investment accounts.

Tim Ulbrich: What, what else comes to mind for you about why, why this is important? Before we talk about functionally what we do with them, why, why is it important that we evaluate what we might do with these old accounts?

Tim Baker: I mean, I think one of the first things that we do with clients when we kind of down the path of like our financial roadmap is. We call it a get [00:07:00] organized meeting where we’re essentially taking inventory of everything that we have. so you know, it’s cash, it’s it’s credit card debt, it’s student loans, it’s investment accounts. real estate, those types of things, right? So often what can sometimes be a black box in this, especially if you, if collected 4 0 1 Ks, is like, what are these plans and how are they actually invested and what am I actually paying in fees?

Tim Ulbrich: Hmm.

Tim Baker: So visibility is, is really the first step to, to build a cohesive, comprehensive plan. And like I mentioned, as your career continues, a 401k or if you rolled into an IRA will be one of the largest things on your balance sheet

Tim Ulbrich: Mm-hmm.

Tim Baker: So it’s really important to have a, intentional plan with how you’re gonna manage these assets and how do they fit [00:08:00] in the overall picture of your ability to build wealth and then to spend that wealth like in retirement. So. You know, a for a lot of people, you know, they’ll say like, I don’t even know where these

Tim Ulbrich: Mm-hmm.

Tim Baker: Or, I have a statement, I have no idea like how it’s invested or, or what it’s, you know, and it, and it’s, it could be, it could be at one extreme of like, I just don’t know what this is to like, you know, the other extreme of like, I know it’s probably not optimized and I need some help with this.

Tim Baker: So I think it’s really important to, you know, again, have a plan for this asset and, and make sure that. It is aligned with what you’re trying to achieve,

Tim Ulbrich: Yeah. When I think about the maintenance that we typically will do. With our clients on their various investment accounts, right? We’re looking at things like, you know, what’s, what’s the asset allocation according to our goals, according to our risk tolerance and capacity? And, you know, as the market does its thing over time and, and things may get outta whack, how do we rebalance those accounts?

Tim Ulbrich: How do we make sure that this is fee efficient, right? So [00:09:00] if, if that’s outta sight, outta mind, that’s the potential risk that we’re, we’re losing eyes on the intentionality of those funds. And, and one other thing I want to say here while we’re talking about this. Is that it’s not uncommon, correct me if I’m wrong, but it’s not uncommon for some financial planning firms to look at your current employer, 401k or 4 0 3 B uh, and say like, Hey, we see that, but we’re not necessarily gonna spend time helping you.

Tim Ulbrich: You manage that, which can be another, another thing to think about.

Tim Baker: Yeah, I think a quarter of advisors, if you’re working with a quarter of advisors, don’t help you with a current 401k, which I think is bonkers. Um, so to me, like if you’re, if you’re looking at a comprehensive plan, like I think that’s important to make sure. Like if I’m, you know, the, the, like when we do, you know, you don’t mention asset allocation.

Tim Baker: When we set, when we establish an asset allocation, what, whether it’s 90, 10, 90% equities, 10, 10% in bonds, or [00:10:00] 70 30 or 80, whatever it is, like to me that conversation isn’t complete until you give a 70 30 or a 90 10 or whatever it is for that held away or for that current 401k. I just think that, that, I don’t, lazy is not the word, but the reason that advisors don’t do that is ’cause they don’t get paid on those.

Tim Baker: They

Tim Ulbrich: Mm-hmm.

Tim Baker: on that. So part of this discussion is following the money. Like, you know, how, how does it, how do fees work? And, you know, what’s the scope for the fee that I’m paying? And to me, if advisors is, is unwilling to help me with a, with a, you know, a 401k, they’re not getting paid directly on.

Tim Baker: That’s, that to me is a red flag. Um. You know, you’re, if you have my best interest in mind, and this is a big part of my balance sheet, then help a brother, help a sister out. Is, is my, my viewpoint. Um, but you mentioned like asset allocation [00:11:00] is, is big, is a big part of this, but I think part of this discussion of like the options and, and what to do is also asset location and. And how an asset location is often forgotten. But I think it’s, it’s one of the things that is, is just as important as, as asset allocation. Meaning, you know, are these accounts taxable, pre-tax, Roth, that type of thing. And to me, you are confined inside of a 401k to be able to pull some levers to make sure that the percentages of where your assets are held, are. Controllable or you can affect change there. And in, in some, in some accounts you can and in others you can’t. Um, so it’s important to understand that. So, and again, one of the things you mentioned is like Reba, and just to address that really quick, know, if you’re, if you’re actively contributing to a 401k, the action of rebalancing kind of happens naturally every time you get paid and put money in if you [00:12:00] leave that job. And that money’s just sitting there. The market does what it does, so that that asset loca, that asset allocation that you set will drift because you’re not actively putting money into it. So you could drift into something that’s much, much more conservative or more likely, much, much more aggressive than what you signed up for. So that’s another thing to be aware of, is that, you know, one of the important things about this is that, you know, when you’re not actively putting dollars in. It, you tend to drift more out of, you know what you signed up for, which can be problematic, especially when the market turns sour.

Tim Ulbrich: Yeah. Great, great points. And, um, I’m glad you mentioned the asset location because that’s a really important one, that if, if we’re on autopilot with some of these things or we just leave them and forget ’em, we’re not necessarily thinking about those asset location questions, which will raise some important decisions like.

Tim Ulbrich: Might we or might we not do Roth conversions, you know, for example. So,

Tim Baker: Right,

Tim Ulbrich: um, really good stuff. Let, let’s talk about the various options. Option one, [00:13:00] perhaps the option, uh, that has the least amount of friction, uh, is do nothing and leave money in the old plan. So I, I leave my employer, I go to work for a new employer, and I just leave the funds in the provider that was managing the 401k for the employer That, that I just left.

Tim Ulbrich: Tim, where, where might this, or might this option not make the most sense?

Tim Baker: Yeah, if you’re, if you’re lazy or you don’t want to deal with, uh, pulling statements and everything that you know it takes to uh, an account, this might be right for you. Right? You just basically don’t do

Tim Ulbrich: Mm-hmm.

Tim Baker: Um, you still enjoy. I. The continued tax defer growth, whether it’s a traditional, um, bucket or a Roth bucket, you still get that benefit, which is great. Um, you still get potential, um, benefits of a lot of 4 0 1 Ks will have the options for like in institutional share classes, which are, can be

Tim Ulbrich: Mm-hmm.

Tim Baker: in [00:14:00] fees compared to like just a retail, you know, what you would buy on the street. Um. And one of the things that’s what’s great about, you know, keeping it at the 401k or even transferring it to a new 401k is that. 4 0 1 Ks had a little bit more protection, um, by erisa, which is the Employment Retirement Income Security Act. So under this federal law, creditors can’t touch your 401k in most cases. E you know, even in cases of like bankruptcy lawsuits or collections, they still, the I risk can still get to your money.

Tim Baker: If you’re in, in a divorce, a Quadra, a qualified domestic relations order, can still access those accounts or any type of CRI criminal risk. Restitution IRAs still have protection, but it could be limited compared. I can kind of get into that a little bit more when we talk about IRAs, but that’s, that’s the big benefit.

Tim Baker: Um, I think the cons here, you know, just like if you, if you leave it or if you move it, you’re still limited to the

Tim Ulbrich: Yeah.

Tim Baker: by that

Tim Ulbrich: Mm-hmm.

Tim Baker: So I always talk about like, you know, [00:15:00] with a 401k, you’re in a sandbox and you only have so many toys that

Tim Ulbrich: Mm-hmm.

Tim Baker: with. And those toys are typically mutual funds. average, 4 0 1 Ks have about 20 to 25 investment options, is typically good enough to build a, you know, a diverse portfolio. But looking at many, many 4 0 1 Ks, I think you can throw out of ’em because they’re crap. And what I mean crap is like they’re typically

Tim Ulbrich: Expense ratios. Yep.

Tim Baker: Exactly, so, so you’re, you’re, you’re often stuck with just,

Tim Ulbrich: I.

Tim Baker: maybe four or five or six funds that are, that are good.

Tim Baker: Most of them, most 4 0 1 Ks will have exposure to US stocks from large, mid small, not all the time. Um, most will have exposure to internationals. They’ll have bond funds. They’ll typically have a stable like money market fund. Um, but they often, they’ll miss things like real estate. If you believe in real estate, emerging market. A lot of 4 0 1 Ks don’t have a digital [00:16:00] exposure if you believe in commodities. Um, so I think that’s one of the cons. I think also one, the big, the big con I think is like the, the possibility of higher fees, um, related to the

Tim Ulbrich: Yeah.

Tim Baker: So we mentioned investment fees. Um. So this is the expense ratio that, the fee that the funds themselves take to

Tim Ulbrich: Mm-hmm.

Tim Baker: of a, uh, a balanced, um, ETF or a mutual fund in this case. So, a, on average the investment fees, uh, inside of a 401k are about 39 basis points or 0.39%. So if I have a hundred thousand dollars portfolio every year, $390 of that is basically being absorbed by the funds that I’m in. Um. And the other big thing that I think is a detriment to a 401k is administrative fee.

Tim Baker: So this covers the cost of running the plan, record keeping compliance, compliance tests, and maybe legal fees. Um, [00:17:00] so there’s really no getting away because, because these plans are, um. very much tested and looked at by the federal government. There’s a lot of record keeping that goes, and that typically is passed on to the participants, to the investor. So the average administrative fees for a smaller plan can range anywhere from 0.5% to 1%. So if it’s, if it’s 1% and I’m paying 30, you know, 0.39%. On, um, investment fees, that’s 1.39 or almost $1,400 of a hundred thousand dollars. As the plans get bigger, like a mid-size plan, so this is a plan that has assets of 10 to a hundred million. You know, you’re looking at 25 to 50 basis points, so a quarter of a percent to a half percent. And then larger plans, you know, you’re looking at, you know, 0.10, that type of thing, but then you add the investment. You know, the expense ratio, there could also be flat fees associated with, um, [00:18:00] administrative fees, that type of thing.

Tim Baker: So, you know, it’s important to, to understand this and this, this data is hard

Tim Ulbrich: Yes.

Tim Baker: not

Tim Ulbrich: Yeah.

Tim Baker: statement. It’s, it’s not transparent. We talked about how poor, um, financial services can be in terms of transparency. So you could be paying anywhere from. 20 basis points, 2.2% to 1.5% and not know it.

Tim Baker: Right. Um, so it’s important that, you know, and it’s kind of like the, the, the, the rule that if your employer is bigger, typically the plan is better. Not always. If your, if your employer is smaller, typically the worse it is for a participant. Um, so fees are gonna be a big thing. And, and we, what we talked about too is like the last couple things this year, like if you’re inside of a 401k, you can’t really do Roth

Tim Ulbrich: Mm-hmm.

Tim Baker: Which I think from an asset location perspective, it really limits your, in your, your ability to

Tim Ulbrich: Yeah.

Tim Baker: the tax, um, portion of your plan. Um, and I think just if you’re [00:19:00] keeping it there and you’re collecting 4 0 1 Ks, I think it’s harder to manage a cohesive plan that is pointing in the direction that you need to point it in and, and optimize for what you’re trying to do. So are pros, there’s obviously cons and a lot of the pros and cons will kind of. You know, we are kind of the same with the, the second option, which is kind of rolling it into your, your new 401k. Um, they’re very similar.

Tim Ulbrich: Yeah, and I think as you’re describing some of the limitations of, of a 401k, you know, we, we’ve seen in the clients that we’ve talked with and, and worked with everything from, Hey, I work for, let’s say, an independent pharmacy that doesn’t even offer. A 401k, or if they do, it might have very limited options, higher fee options, right?

Tim Ulbrich: Very small. E employer all the way up to, I work for a, a giant company where we’ve got, you know, may maybe more options, maybe not more options because of the sandbox that you were talking about, but I might have, you know, lower fees on, on the administrative side as well as the investment options. So 4 0 1 Ks are not all created equal, which, [00:20:00] which really plays into this decision.

Tim Ulbrich: What might I do with. This 401k, this old 401k in terms of either leave it or move it or put it in an IRA, and we’ll talk about here in a moment when, when you go from some of the variants, we’re talking about various 4 0 1 Ks, and you look at something like an IRA rollover, at that moment, we’re starting to level the playing field, right?

Tim Ulbrich: Because once we’re into the open market. You know, those limitations aren’t, aren’t necessarily the same that they were, uh, by any means. We’ve got more options to, to be able to choose from, which might might for some, to be fair, you know, this can be overwhelming and, and I think this is where.

Tim Baker: con.

Tim Ulbrich: It’s a con.

Tim Ulbrich: Yeah. And I, I, I think about some of the, the employers that I had early in my career, you know, I remember it was about 15, 20 options as you mentioned. And the visual that was coming to mind as you were talking is, you know, if we’re bowling and we got bumper lanes on, right. In terms of like, I can only, you know, mo move so far, thankfully I can’t put the ball in the gutter.

Tim Ulbrich: So if I’m overwhelmed by, you know, asset allocation decisions or choosing investments or not understanding where those investments might want [00:21:00] to go, you know, there, there’s a limited. Menu of choice, which can be valuable, but also as we start to really build the financial plan in a way that it’s, it’s custom to you and your goals and individualized to what we’re trying to achieve long term.

Tim Ulbrich: Some of those options that we have might be more valuable as well as you articulated, really trying to keep those fees down because as we’ve covered in this podcast many times before the, the erosion of the portfolio that can happen due to those fees can, can be very real over the long, long term. Tim, one other idea that just came to mind that I wanna get your thoughts on.

Tim Ulbrich: Uh, and, and probably I’m bringing my, my own personal experience bias here. ’cause I made this mistake on, uh, Jess and I made this mistake on her 4 0 3 B very early, uh, in, in our, uh, investing career is, it was a very small account, wasn’t there for a long period of time. We, we chose the option one, do nothing.

Tim Ulbrich: Uh, at that time, admittedly didn’t really have a good idea of what were the options available and it became a, a, a [00:22:00] nuisance after a while I remember getting these statements. Uh, in the mail periodically, and it was like just something we weren’t often thinking about, right? Because it was from a year ago, two years ago, whatever the timeline was.

Tim Ulbrich: And because the account was so small, I felt like the combination of outta sight outta mind and the smaller account balance, uh, drew us into the temptation of perhaps the absolute worst move to make, which is cash out that account. So I, I think, you know, if you, if you think of an account that’s relatively small.

Tim Ulbrich: And is kind of an annoyance factor outta sight, outta mind, that tendency, that risk arguably could increase. Versus if we’re able to combine that with other funds and we, we’ve set an intentional plan and strategy for those funds, I think, I think it might minimize the likelihood of making a decision like that.

Tim Baker: Yeah, and I don’t know if this is one up in you, Tim, but I, I think that. I did the same thing, but it was more of avoidance and they, they said, Hey. They basically, they were sending me [00:23:00] letters that said like, if you don’t do something with this, we’re gonna send you a check. Like, so they cashed it out for me. Um, which is obviously a, you know, something that you don’t want to do. Any, any dollars that you have the, the wall of, you know, a, a Roth or a traditional is

Tim Ulbrich: Mm-hmm.

Tim Baker: And, you know, if you extrapolate, extrapolate those dollars out over the course of a career, even if you don’t do anything with it, um, and it, you know, if we’re invested somewhat, um, appropriately, those dollars are gonna

Tim Ulbrich: Mm-hmm.

Tim Baker: and be, you know, potentially substantial by the end of a 30, 40, 50 year career. So, I mean, those are those, you know, some plans have, You have things built into the plan documents that say if they, if you’re not a

Tim Ulbrich: Right.

Tim Baker: a non participant, meaning you’ve moved on and the, the, the, um, account is this small, then they’re not

Tim Ulbrich: Mm-hmm.

Tim Baker: keep you on their books and they’re gonna basically force [00:24:00] a rollover, um, which. Then if you don’t know what you’re doing, you know, you go to cash and you’re paying the 10% penalty plus, plus the, uh, the taxes. So it might not seem that big of a deal, but I think in the grand scheme of things, it can, it can be. So, yes, absolutely. And, and, and again, I’m, I’m, I’m biased here, but I’m like, that’s

Tim Ulbrich: Mm-hmm.

Tim Baker: advisor.

Tim Baker: Just help

Tim Ulbrich: Mm-hmm. Mm-hmm.

Tim Baker: if you can get the statements, an advisor can do the rest. Um, so I think it’s really important to, um, you know, if you, if you’re. I, I, it’s frequent that I talk to, to pharmacists and they’re like, yeah, I have, you know, I have three old retirement accounts.

Tim Baker: My spouse has two old retirement accounts. We’re finally at a point where we just need to figure out, ’cause like, I’ll ask like, well, know, like, what’s your, you know, and if you, and if we add up these accounts, like there might be half a million dollars, 750,000, maybe even more. And I’m like, well, what’s your philosophy?

Tim Baker: Like, how are you managing it? And it’s like, uh. [00:25:00] Don’t

Tim Ulbrich: Mm-hmm.

Tim Baker: think, I think that, and we’ve talked about this before. A pharmacist with the count kind of money that pharmacists make and what they will amass over the, their course of their career. The sooner they answer that question or work with an advisor to help them answer the question, the more efficient and optimized they

Tim Ulbrich: Yeah.

Tim Baker: The longer that you’re like, I don’t know, or it’s in target date funds, and again, I don’t, I’m not hating on target date funds, but target date funds typically. Don’t, are more expensive and their glide paths of how they transition for from equity to fixed income over the course of the life of the fund is typically not in line with

Tim Ulbrich: Yeah. Yep.

Tim Baker: It’s just not

Tim Ulbrich: Yep.

Tim Baker: to me, the sooner that you are. On the path, you know, you’re following a roadmap from a financial perspective, the, the more efficient and it’s, you know, it’s kind of the whole adage of like, work smarter, not harder. Right? And [00:26:00] I think sometimes the dis disjointed, um, investment philosophy across multiple accounts lends itself to just being again, inefficient and wasting time and money that you don’t otherwise have to.

Tim Ulbrich: I think there’s also decision fatigue there. You know, when I think about the, the exam, the example you gave, which is not an uncommon one. You and I were talking about

Tim Baker: Mm-hmm.

Tim Ulbrich: a couple weeks ago and I wrote a blog post on this called The Accidental Millionaire, which is like, Hey, I wake up in my forties and we’ve been saving 10, 15, 20% of our account.

Tim Ulbrich: I. You know, of our income towards various investment accounts, and we wake up and we’re like, oh, wow, we’ve got north of a million dollars a, a fairly common situation. And, and naturally there’s this. Point, not of reckoning, but of like, well now what we, we haven’t really necessarily been super intentional on where we’re going, why we’re going there, what’s the asset allocation?

Tim Ulbrich: What’s the asset location? Are we on track? Are we not on track? I mean, but those unanswered questions can be exhausting and they’re all answerable questions. Right. And I think that’s to the point you’re making [00:27:00] of like, let’s figure ’em out.

Tim Baker: Yeah. I mean, I mean, in the beginning you’re just like, it’s just the start, right? And just get it rolling. And then it’s kind of, you know, you’re kind of shooting first ask questions later, but eventually you need to ask those questions of like, am I truly optimized? And again, like we’re not talking chump change, you know, the, the, the wealth that you should amass over the course of your career. Um. That should sustain you till the end of your life substantial, or it should be

Tim Ulbrich: Mm-hmm.

Tim Baker: um, you know, having a, a plan and a strategy, um, asset location, asset allocation. Again, if all those things sound like foreign to you, that’s okay,

Tim Ulbrich: Mm-hmm.

Tim Baker: you know, but I would say hire an advisor like you need it.

Tim Ulbrich: So option two is we can roll it over to our new employer. So let’s say I worked at a hospital, I had a 4 0 3 b, I left that hospital. I’m now working for another hospital. I do have an option to roll over my [00:28:00] old 4 0 3 B or old 401k to my new employer count. Now this might Tim, bring an advantage of consolidation.

Tim Ulbrich: It could bring an advantage that we have everything in one place. We can see it, we can be intentional. It’s not that out ofci outta sight, outta mind risk that we were just talking about, but it still carries all the similar, same limitations we were just talking about. Of the, of the limited options and fees within the the retirement Plan sandbox, correct?

Tim Baker: Yeah, you, you, you consolidate. So instead of collecting, you know, two or three or 4, 4 0 1 ks, you still have the one, if you leave that job, you can

Tim Ulbrich: Mm-hmm.

Tim Baker: and you still have the one. Um, you know, there are things that 4 0 1 ks offer, like loan provisions and things like that, that IRAs do not, um, that I guess can be a pro, you know, you still have the, you know, the creditor protection, um, under the, the new 401k. it can allow for easier. Backdoor Roth, IRA contributions since it keeps, you know, pre-tax

Tim Ulbrich: Mm.

Tim Baker: out of a traditional

Tim Ulbrich: Mm-hmm.

Tim Baker: So that’s a big, that would be a big plan, uh, plus as well. [00:29:00] But yeah, to your point, the cons are you’re still limited by the investment menu, that you’re still limited by the fees, which I think are substantial compared to, um, an IRA, uh, you can’t do those conversions, which I think are gonna be more important.

Tim Baker: More important down the road. And I think, again, the sooner that you can kind of figure out. How much you should have in each bucket, the easier it is to do. If you’re overly weighted and pre-tax or overly weighted in taxable or Roth, then that’s a problem, um, or can be a problem. Um, and then there’s some plans, Tim, that don’t accept rollovers.

Tim Baker: They just don’t do it. Which I think is becoming more and more rare, but they

Tim Ulbrich: Hmm.

Tim Baker: those do exist. Um, so you might be forced to, to do, you know, to either leave it or roll to an an IRA. So yeah, a lot of the same things. Pros and cons, that you know, your old 401k will follow you to the

Tim Ulbrich: Mm-hmm. Option three, Tim, then is that we could roll it over to an IRA. So we’re gonna move a old 401k, or an old 4 0 3 B, or multiple old 4 [00:30:00] 0 1 Ks. 4 0 3 Bs into an IRA. And I know this is a very common approach. It’s what, you know, I did in my own 4 0 1 a when I left, left Ohio State. Um, and ultimately put that in, into an IRA.

Tim Ulbrich: And the idea is that you could, you know, if you have multiple old accounts, eventually you can consolidate those all into one. So tell us about this option. Why often, but not always. Why often it’s, it may be the preferred option. And, and what are some of the pros and cons here?

Tim Baker: Yeah, so, so the big thing is like, you’re, you’re, you have wider. Investment options, right? So that can be a pro anacon. So you’re, you’re out of the sandbox. You’re not limit to what the 401k offers. And there’s thousands of stocks, bonds, mutual funds, ETFs, that cover all asset classes. So typically of, you know, some of the, the risk associated with investments, 4 0 1 Ks don’t want to do certain asset classes.

Tim Baker: So they say, Hey, we’re just gonna offer these, they’re kind of down the middle and that’s it. [00:31:00] So outside of the 401k and in IRAs, you can really tailor the portfolio to what you want as an investor. So that could be looking at all the asset classes that we mentioned and have a diversified portfolio that way. It could be where you are a vanguard, you’re a boggle head, and you want all Vanguard. Sometimes you can’t do that inside of a 401k ’cause they only offer

Tim Ulbrich: Mm-hmm.

Tim Baker: Fidelity or things like that. Um, most 4 0 1 Ks don’t offer like a digital asset exposure if you believe in that. Um. lot of 4 0 1 Ks won’t allow you to, um, invest directly into stocks outside of the, the, the stock that they, you know, their own, you know, the employer stock. Um, so some people like things like, you know, individual stocks or like right now my brokerage account is invested like direct index in, so this enables you to buy stocks that make up a particular index, like the s and p 500 that has. benefits. So you can book tax losses on positions that [00:32:00] have decreased in value. Um, so these losses can be harvested. Um, even when the, the market is, you know, up overall. So this is another, you know, strategy that one can use that is not available inside of a 401k. And then, you know, if you lean more towards value or growth or emerging market, some of those things might not be available in a 401k.

Tim Baker: So you can kind of get a little bit more nuanced, with what you’re trying to achieve. The big thing here is that. The fees, the fees are often, you know, not the same. So like, like we mentioned, you could be paying north of 1%, one and a half percent, um, in a 401k, which that, that doesn’t necessarily exist in a, in, in IRA.

Tim Baker: Now there’s a caveat, and I’ll get to that in a second. Um, you know, it simplifies the planning, you know, if, if you consolidate counts, which is true if you consolidate a 401k to a 401k. Um, the big thing again, asset location, is that you can convert.

Tim Ulbrich: Yeah,

Tim Baker: IRA, which is

Tim Ulbrich: I.

Tim Baker: with the traditional [00:33:00] IRA to a Roth IRA and do that like this has nothing to do with a, a backdoor conversion.

Tim Baker: This is, I have a hundred thousand dollars in a traditional, I’m not making any money this year. I’m gonna put $40,000 from my traditional to my Roth. Pay the taxes when I don’t make, I’m not making any money. basically now I have $40,000 in a Roth and $60,000 in a traditional, there’s a lot of power in that and the ability to do that in a four in a IRA that you can’t do in a 401k.

Tim Baker: So those levers that we’re pulling, um, as we’re in the accumulation phase to then with then go into the withdrawal phase, that’s work that can be done in the accumulation phase that you can’t do on a 401k. Um. The big thing here, and I think from a, a advisor perspective, is follow the money. So why is my advisor telling me that a hundred percent of my time I should roll it over? Typically it’s because that’s how advisors get [00:34:00] paid. So advisors will say, Hey, I can’t help you unless you have a half a million dollars, or, I, I can’t help you unless I have a million dollars. You have a million dollars. What does that actually mean? That means that that advisor only works with clients that have investible assets of a half a million or a million dollars. Investible assets are typically old, 4 0 1 Ks old, 4 0 3 Bs, IRA accounts, Roth IRAs, brokerage

Tim Ulbrich: Yep.

Tim Baker: Any other, any other accounts are typically not. Accounts that tho that advisor can get managed on. So there’s a conflict of interest there in, in their advice to their, to their client or to a prospective client. Um, and that should be known. And again, I think what we have said often, um, and consistently is that in financial services. We are terrible at being transparent with the scope of work that’s being provided [00:35:00] and the fee that’s being charged. It’s often nebulous in terms of the scope of work. Yeah, we do plan and well, what does that mean?

Tim Baker: Are you gonna help me with my, my 401k that I contributed a lot of times? No. Um, are you gonna help me with my student loans? Are you gonna help me with, um, you know, insurance or whatever that is? And a lot of the case like it is. Not explain and the client is left confused. And then how am I being charged?

Tim Baker: And we went through that whole episode, Tim, is it buried in a, uh, insurance product? Um, is it transparent? Can I actually see the fee or not? So what we have found is that, again, transparency and, and explaining the conflicts of interest are important. So if you have an old 401k. And you can roll it over a lot of the times for the reason that we, we talk about it’s important or it’s good for you to do that.

Tim Baker: However, at YFP, we’re gonna bill part of your fee [00:36:00] from that

Tim Ulbrich: Yep.

Tim Baker: It. And what we have found is it’s more of a sustainable relationship with clients if we’re billing them from the assets that we’re managing versus cash flow. What do I mean by that? What I mean by that is if we’re charging 1% on a $500,000, um, you know, old 401k that we’re managing, that is easier for a client to pay than to bill. Um, and pay out a cash flow or to pay out a credit, a credit card, that money is still your money. Money is fungible. It’s still important to understand that

Tim Ulbrich: Mm-hmm.

Tim Baker: that, but, um, from a longevity perspective, it’s easier to pay from an asset. So a lot of advisors say, I can’t help you unless you have that amount of, those amount of assets.

Tim Baker: So I think it’s just be really important to be upfront. I think what a lot of people do is like, they’re like, oh, well I’m, I’m paying 1%, or I’m paying half a percent at my 401k. Like, it doesn’t make sense for me to roll it [00:37:00] over the apple’s. The orange it is, is that if you’re working with an advisor, if they’re doing it correctly, you get access to a comprehensive plan that is going to not only advise on the asset that they’re managing, but the held away assets and every other a, you know, part of the financial plan.

Tim Baker: Right. So. The, the assets is often, are often the engine for which to pay an advisor. It’s just important to know that upfront, which a lot of people don’t

Tim Ulbrich: Yeah, I think what you’re talking about there is, is transparency, right? In that model and making sure that we, we understand it as you mentioned, where a fee comes from. Money is money. Um, and as long as we, we, we know where it’s coming from. We feel comfortable. We understand that, that that’s really important.

Tim Ulbrich: And, and I’ll add to your, your discussion, why is longevity of the relationship important? Right. What we know, myself included, yourself included, is that the market cycles are going to have significant ups and downs, and we are in this for the long run, not just the long run to like retirement, like the [00:38:00] long run of our funds, being able to continue to grow and produce a retirement paycheck so that inflation doesn’t erode our purchasing power.

Tim Ulbrich: That means that we need to sustain. The progress and the momentum, not only on our investments, but as you highlighted in every other part of the financial plan. And if the market’s going to do what it has done historically in every five years, we’re gonna have a fairly significant drop of, say, 20% or more.

Tim Ulbrich: Human behavior and emotion suggests that most of us, if we do this completely ourselves at one point, if not more than one point, are going to make a mistake, whether it be buy in high or sell low, and not keeping that long-term horizon in mind and a huge piece of the value equation. Again, we’re only talking about investments key part of the financial plan.

Tim Ulbrich: But of course there’s a lot more than just the investment. Part of the plan is to have a person in our corner that is helping us keep the long-term perspective and horizon, uh, in, in mind because we know that it’s [00:39:00] those decisions If we make them irrationally, which. A lot of us, I’ve done it before. I was telling you, you know, before we hit record, like I’m guilty of back in the day, you know, buying Circuit City Penny stock.

Tim Ulbrich: I was convinced him Circuit City was coming back, like laughable. Right At this moment, you know, I, I’ve cashed out an old 4 0 3 B account. Like these things, when we look at the volatility and this season we’re in right now is just a great reminder. You know, if, if you would’ve been napping the last three months, it’s like nothing has happened in the market.

Tim Ulbrich: Right. But if you’re checking your accounts every single day, especially thinking about those people that are nearing retirement or transitioning out, like palpitations might be happening, we, we need someone alongside of us to say, Hey, we’ve got this. We’ve planned for this, we accounted for this. Let the markets do its thing and we’re gonna be able to weather this and look at the long term perspective.

Tim Baker: Yeah, and like, you know, like we, we were talking about like asset location, like in a RoboAdvisor is not gonna

Tim Ulbrich: Totally.

Tim Baker: most and most, again, most, a lot of advisors aren’t looking at that. They’re. [00:40:00] I’ve had so many conversations in the last couple weeks, Tim, where it’s like I’m, I’ve been working with an advisor, you know, they are like the one I had recently.

Tim Baker: It’s like I have a Roth IRA with them. I have a brokerage account with them, and I’m like, why are you funding a brokerage account? And he’s like, I don’t know, I just recommended him. I’m like, are you maxing out your 401k? He’s like, no. Um, so they’re like, they’re setting up these accounts that they can get paid on. They

Tim Ulbrich: a whole life, A whole life policy or, yeah.

Tim Baker: crappy insurance that they, they don’t need, no help on the student loans. No help on, you know, this goal or that goal. I’m like, did you guys sit down and talk about goals? No. So, and again, like, I don’t want to sit here and like, like talk negative about, but like, that, that’s just not serving your interest.

Tim Baker: Like it’s not serving your interest. And, you know, to me, um. You know, I think what we’re talking about is, is again, looking at this from A to Z, you know, and

Tim Ulbrich: Yep.

Tim Baker: it’s, it’s not like, oh, well, we’re not getting [00:41:00] paid on that directly, so I, I can’t help

Tim Ulbrich: Mm-hmm.

Tim Baker: that’s asinine. So it’s really aligning yourself with a planner, I think that has your best interest in mind. And it’s hard to talk about this without kind of sounding like, you know, Hey, these people are bad. I don’t think they’re bad. I just think it, I think it’s the, the environment that they’re, they are in is not conducive to put in the interest of their clients first.

Tim Baker: You could li you could listen to that and be like, and, and be scared away and be like, well, I don’t wanna work with advisor.

Tim Baker: But I also would say that the majority

Tim Ulbrich: I.

Tim Baker: of, of the people listening to this podcast. I think need an

Tim Ulbrich: Mm-hmm.

Tim Baker: on the level of wealth that we’re, that we’re, you know, we’re talking about, um, know, pharmacists are in the, the top 10 to 15% of income earners in the United States. Those are typically individuals that need professional help, that, you know, it becomes more complicated as your estate grows, the taxes all, you know, the complexity, all that. Um, and again, I think the sooner that you get in front of [00:42:00] that, the more efficient you’re gonna be. So, um. But I, I think us speaking about this directly, ’cause I’m just like, you know, I, I kind of get it exasperated. I’m like, why? Like, why? Because like, you know, I’m, and I’m sure there’s examples in the medical world where

Tim Ulbrich: Mm-hmm.

Tim Baker: is this prescribed?

Tim Baker: Or like, what, what

Tim Ulbrich: Mm-hmm.

Tim Baker: on here? And it’s like, you probably follow the money with the doctor’s office, right? No offense to doctors, but I’m sure there’s, you know, we talk, I’ve talked about this, like when I first got into financial services. We’d have mutual fund, whole mutual fund wholesalers come to our office in a fancy car wearing a fancy suit, taking, take us out to a fancy lunch, show us fancy glossaries of their fancy funds, and said, Hey, Tim, when client X, Y, Z rolls over their half a million dollar portfolio, wink like, use our funds.

Tim Baker: And I’m just like,

Tim Ulbrich: Mm-hmm.

Tim Baker: your funds are. 20 times more expensive than, you know, what, what you can get out there. Are they 20 times better from a performance perspective? Are they 20 times safer for the same amount of performance? And often the time is [00:43:00] the, the answer to that is no. So you know, it is kind of following the money.

Tim Baker: And I think most of the time when you ask advisors, they kind of

Tim Ulbrich: Mm-hmm.

Tim Baker: seat about how they arrive at fees or how they get paid or things like that. And I think that’s a huge red flag.

Tim Ulbrich: Yeah, and I think this is really where the fiduciary obligation matters. We throw that term around a lot, but you know, if, if you’re having a conversation with someone about what should I do with an old account? I. Right. We, we, we’ve kind of made the case that in, in many instances, it may make senator to roll, roll it over an IRA, but there may be a case where that doesn’t, for, for whatever reason.

Tim Ulbrich: Um, and so to have that perspective where, you know, yes, this may be where the fees derive, but if that were to be the case or the situation, right? The fiduciary obligations says I’m acting in the best interest of the client as they’re making these decisions. So as we wrap up this third option of rolling it over to an IRA, some of the key benefits I heard you say, were consolidation.

Tim Ulbrich: Right. We have multiple accounts that we can have eyes in one account. We have more investment options. We’re outta the sandbox. We typically can have lower, [00:44:00] lower fees. Uh, as we look at more options. And then asset location, we, we’ve made a case about why asset location is so important and inside of an employer account, we don’t have that same flexibility.

Tim Ulbrich: If we were to want to do things like a Roth conversion, you know, for example.

Tim Baker: And, and if we think about this with the end in mind, like I think if, if I’m building out, like if I’m looking at a client, the, and, and I’m trying to build out a retirement paycheck, I think the perfect makeup of that client in terms of the ability to have a con, like a concentrated focused strategy that I can then spend is. That they have a brokerage account, they have a pre-tax, a rollover, or traditional IRA have a Roth. And then we’re figuring out social security and, and maybe they’re making consultant income and things like that, but that’s essentially it. Like the 401k that they had, we’ve

Tim Ulbrich: Mm-hmm.

Tim Baker: um, they might get some pension dollars.

Tim Baker: That’s great, that’s gravy. But those are the three accounts in which we’re basically [00:45:00] pulling the levers to then say, Hey. You know, you need $55,000 out of your, out of these three accounts, we’re gonna get X per year, or, you know, per month from social security, maybe x from a, a pension, maybe some. But that, that to me is the end in mind.

Tim Baker: You’re not looking at. 401k. Old 401k IRAs. It’s, it’s those three accounts that you’re essentially is your dashboard. I will say, Tim, I just wanna mention, mention the cons on this. So we mentioned of, of doing, going to an IRA, it’s the paralysis by an analysis, right?

Tim Ulbrich: Yeah.

Tim Baker: overthinker, you know, I don’t want these, you know, accounts being stuck in cash ’cause

Tim Ulbrich: Yeah.

Tim Baker: what to do.

Tim Baker: Um. IRAs typically don’t offer loan provisions, which can be both a pro

Tim Ulbrich: Yeah, yeah.

Tim Baker: Uh, the creditor protection might be

Tim Ulbrich: Mm-hmm.

Tim Baker: in bankruptcy, IRAs are protected up to 1.512 million, um, under federal bankruptcy law. So, and then per like, different states have different, you know, things, so that might be something to, to consider. Um, and then moving [00:46:00] funds here could complicate like a backdoor

Tim Ulbrich: Yep.

Tim Baker: um, potentially. So those are are the cons. But you know, to me. To me, this is all about transparency, understanding the conflict of interest, um, and knowing, again, like if you’re gonna work with someone, how does, what’s the scope of

Tim Ulbrich: Mm-hmm.

Tim Baker: does the fee get charged? And then being able to make, you know, a, a decision that you think is best for you. I.

Tim Ulbrich: So we’ve covered three options, right? Option one was do nothing. Option two is roll it over to a new employer account. Uh, option three is rolled to IRA to be complete. There’s technically a fourth option, which would be that you could cash it out. I think we’ve made the case for why that’s typically, if not always, not what we want to do, right?

Tim Ulbrich: So. If it’s something we cash out, if it ever hits your bank account, and it’s not a direct rollover to either a new employer account or to an IRA, we’ve got a tax problem on on a traditional account. So that’s gonna be subject to to federal income tax, state income tax, and often because of when those funds hit and it may be a while till your fire taxes, that might [00:47:00] mean we have a surprise coming at tax.

Tim Ulbrich: Tax filing time if we weren’t thinking about what the impact of that was gonna be. So that account’s gonna take a major haircut. Um, and so if at all possible, especially if they, we have a lot of time for that money to grow compound for time, value, money to work its magic, we wanna let those funds continue to do that.

Tim Ulbrich: Uh, whether it mean a rollover or one of the other options we’ve already discussed. All right, as we wrap up here, um, we’ve covered several options of what you can do with an old 401k, 4 0 3 b. As a reminder, we’ve got a brand new guide, uh, that will help give you some more information on this topic. You can download that guide Bests and wor Worst Moves to Make with an old 401k.

Tim Ulbrich: By going to your financial pharmacist.com/moves. Again, that’s your financial pharmacist.com/moves. And if you’re listening to this, say, Hey, I’d love to have a conversation to learn more about Y fps one-on-one fee only financial planning services. We’d love to do that. We work with pharmacists virtually all across the country.

Tim Ulbrich: Uh, you can book a discovery call by going to your financial [00:48:00] pharmacist.com. You’ll see an option to book a discovery call. Tim Baker leaves, leads those calls, typically 45 to 60 minutes in length. It is an opportunity for us to learn more about your financial situation, your goals, what’s going on, not only with something like an old account, but what’s going on with the rest of the financial plan.

Tim Ulbrich: What are the goals? What’s our progress? How are we tracking? We can share more about our services and ultimately see whether or not there’s a good fit for there. So again, your financial pharmacist.com, and you can click on the option to book a discovery call. Tim Baker. Great stuff as always. Uh, thanks so much and, uh, wishing everyone a great week.

Tim Ulbrich: Take care. Thank you so much for listening to this week’s episode of the YFP Podcast. And if you like what you heard, please do us a favor and leave us a rating and review on Apple Podcast or wherever you listen to the show, which will help other pharmacists find the podcast. Before we conclude, I wanna again, thank this week’s sponsor of the Or Financial Pharmacist Podcast, first Horizon.

Tim Ulbrich: First Horizon offers a professional home loan option, a KAA doctor or pharmacist loan that requires a 3% down [00:49:00] payment for a single family home or town home for first time home buyers. 5% for non-first time home buyers, has no PMI and offers a 30 year fixed rate mortgage on home loans up to 8 0 6 500 in most areas.

Tim Ulbrich: The pharmacist’s home loan is available in all states except Alaska and Hawaii can be used to purchase condos as well. However, rates may be higher and a condo review has to be completed. And finally, an important reminder that the content in this podcast is provided for informational purposes only, and is not intended to provide and should not be relied on for investment or any other advice.

Tim Ulbrich: Information in the podcast and corresponding materials should not be construed as a solicitation or offer to buy or sell any investment or related financial products. For more information on this, you can visit your financial pharmacist.com/disclaimer. Thanks so much for listening. Have a great rest of your week.

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