The Smartest 401k Book You'll Ever Read: Maximize Your Retirement Savings...the Smart Way!

by Daniel R. Solin

The guide readers need to retire richer—from the international bestselling author of The Smartest Investment Book You’ll Ever Read.

In this New York Times bestselling guide, author Daniel R. Solin takes issue with the commonly held belief that participating in defined contribution retirement plans is a “no-brainer” because of the employer match.

While providing readers with comprehensive, accessible information on the most common deferred compensation plans, annuities, and other retirement-based investments, he shows the 70 million participants currently in those plans how to create the best portfolio with often limited options.

In his straight-forward, no-nonsense style, Solin offers the new rules for investing for retirement and shows readers how to quickly and simply determine their own needs, get control of their assets, avoid scams and sucker bets, discover untapped resources at retirement, and eventually get income out of tax deferred plans—the smart way.

Genres: Finance, Personal Finance, Business, Money, Nonfiction, Self Help, Audiobook

240 pages, Hardcover

First published January 1, 2008

About the author

Dan Solin is the New York Times bestselling author of the Smartest series of books which include: The Smartest Investment Book You'll Ever Read, The Smartest 401(k) Book You'll Ever Read, The Smartest Retirement Book You'll Ever Read, The Smartest Portfolio You'll Ever Own The Smartest Money Book You'll Ever Read, The Smartest Sales Book You'll Ever Read and Does Your Broker Owe You Money?

His latest book, Ask: How to Relate to Anyone, is based on cutting edge research he did to find out why he wasn't better at sales. What he discovered turned everything he previously believed upside down, increased his conversion rate exponentially and transformed his business and personal relationships.

Dan has taught the lessons in Ask with great success to audiences in North America, Europe and Asia.

Dan blogs regularly for Advisor Perspectives and also has a newsletter distributed to thousands of subscribers.

He graduated from Johns Hopkins University and the University of Pennsylvania Law School.

Visit the website for Ask for more information: askdansolin.com

Reviews

[Gavin · Rating 4 out of 5]

Great practical and concise book on the pitfalls of 401(k)s and the pros and cons of other investment vehicles. Here are a few of the take-aways from this book:

• A minimum savings rate of 15%, including your employers match, is critical for a successful retirement. But you need to be a smart investor.

• Don't assume that brokers add value. You may be the best advisor you will find.

• Advisors with conflicts of interest may not place your interests first.

• When constructing a portfolio, nothing is more important than your asset allocation.

• If your 401(k) plan does not give you the option to invest in at least three, broad-based low-cost index funds and a range of Target Retirement Funds, it's subpar.

• The current 401(k) system is a disaster waiting to happen.

• Variable annuities rarely make sense for investors in 403(b) plans or outside of them.

• If your only option is an annuity, choose low-cost annuities offered by TIAA-CREF.

• Consider using an IRA to get better performance.

• Lobby for a better 401(k) plan. Ask your employer for an audit of fees.

• Implement your nonretirement portfolio with low-cost index funds.

• Activity within mutual funds increases costs, which can reduce returns.

• Standard deviation measures the risk of your portfolio. Make sure your portfolio's standard deviation isn't too high for your tolerance for risk.

• Consider transferring company stock in your 401(k) into a taxable account and taking the tax hit instead of transferring the stock to an IRA.

• Buy the lowest-cost index funds from one of the major fund families.

• Cashing out your 401(k) rarely makes sense.

• Don't engage in stock picking or market timing.

• If you don't take risks, you'll only earn savings account returns. Your portfolio should consist of a mix of different classes of stocks and bonds.

[Jenny GB · Rating 4 out of 5]

I was looking for advice on 403(b) retirement savings and this was the only book that came up in my library system, but I'm glad it did. It was a nice introduction for a beginner like me on good investing principles as well as common pitfalls. It seems like Solin is advocating using your best common sense when investing and trying to make the most of options presented to you. I'm sure there are many different ways to grow after reading this book, but for now this is a good push to get started. Unfortunately, there are not a lot of alternatives to 401(k)s mentioned in the book besides IRA, Roth IRA, and possibly an immediate annuity. I'd like to really know what other options are out there. It also didn't contain much specific advice to 403(b)s except to say that they are worse than 401(k)s so don't read this book expecting it to enlighten you on that account. Definitely a nice how-to for beginners in evaluating their existing plan or as they are trying to select a plan.

[Ronald Brady · Rating 4 out of 5]

So over the last year or so, I’ve been on a quest to learn all of the things about personal finance that nobody was able to hand down to me. And on that quest, I have learned quite a lot. This book has been very helpful and helping me and the rest of my family understand the difference between the different retirement offerings out there, with the benefits and drawbacks are of each, and has helped us begin to build a strategy that involves multiple accounts, and an overall stable portfolio strategy. Like many have said though, it’s not the most page turning book in the world, but when it comes to finance… There are generally two types of books, ones that are useful in terms of the raw advice they offer, and ones that inspire you to do better. And I would say this falls into the former category more so than the latter.

[Dynah Zale · Rating 3 out of 5]

Definitely not the most turn page worthy book I’ve read this year but he stuffed enough useful information in here to realize that I need to do more then just contribute to my 401k at work. I need to take an i. Depth look at the investments my money is being applied to and that I need to add a total of 15% (Eek!!) to my retirement.

[Andrew Mutch · Rating 5 out of 5]

This is a must-read for anyone who's saving for retirement through a 401(k) or its cousins 403(b) and 457(b) retirement plans. After reading this, you may find yourself re-evaluating where and how your money is invested. While Solin provides a number of good tips on investing, this isn't primarily a book on how to invest. Instead, its primary focus is to warn you of all the ways that those managing your retirement funds are undercutting your future through the fees and bad investment vehicles that clog up the offerings in your 401(k) plan. Solin also shows you the steps you can take to help avoid those fees by making better choices about where to put your retirement funds for the long-term. Some readers may find the extremely short chapter structure (50+ chapters in 200 pages) a bit odd. But I found that by keeping each chapter focused on one concept, it was easier to absorb and retain everything.

[Gforward · Rating 3 out of 5]

It's a tough road to retirement for us working stiffs, and any help is appreciated, especially this honest little wakeup call.
Worth a read, and doesn't ask a big investment of your time (it's short & concise). You may be shocked
to discover how many thousands per year your fund provider is paying itself, subtracting it directly from
your balance. You may even be inspired to transfer your holdings to funds having lower expense ratios.
Already five years old, some of the book's content may need to be re-considered due to the market distortions caused by the
quantitative easing policy of the U.S. & other major governments.
But the basics are here, and they're not yet obsolete. If you're contributing to a retirement plan, you
should give this book at least a quick look.

[Eric · Rating 3 out of 5]

This book basically falls right in line with the message of A Random Walk Down Wall Street: don't try to beat the market, invest in low-cost index funds, diversify, invest regularly and DON'T PANIC.

Probably the most interesting thing for me was the author's explanation of how it may be better to invest after-tax money and only pay a long-term capital gains tax upon withdrawal rather than putting pre-tax money in a 401(k) and paying a larger income tax upon withdrawal. I'm going to look into this option a bit more.

[Laila · Rating 5 out of 5]

Helpful
4 m.p/5

TBD

[Jessica · Rating 5 out of 5]

It means a lot when industry professionals and sometimes just beneficiaries of an industry take time to reflect on What's the Deal? It's great that stocks exist - to support company growth, stocks may be sold and purchased, and that economic fuel is a system of trust. There are many perspectives today, regarding inside information, if market knowledge being more transparent in general just improves that market generally, and of course the conflict in that is the landslide overnight fortune rallies that enable timely cash-outs for a few. For the purpose of most 401Ks, the retirement savings success of millions, this book discloses a lot of sageness and explores what riding out stock market performance and often unknowable fees amounts to as a total cost of business in today's orchestration of traditional employee savings funds. May the force be with us all.

[Arturo Sierra · Rating 4 out of 5]

I decided to read *The Smartest 401k Book You’ll Ever Read by Daniel R. Solin because I had heard many people criticize the 401(k) plan. Wanting to gain a deeper understanding, I turned to this book, which covers a wide range of topics such as 401(k)s, Roth IRAs, 403(b)s, and life insurance. What I appreciate most is the author’s ability to clearly explain the differences between these investment options and offer actionable advice to ensure readers are making the best decisions for their retirement.

With so much misinformation online—often aimed at selling a product—this book stands out as a trustworthy resource. I highly recommend it to anyone looking to make informed financial choices and secure their future.

[Doug · Rating 4 out of 5]

Excellent reinforcement of indexing principles. But I don’t see evidence that international indexed funds are counter cyclical to the S&P 500 in the intertwined global economy. Just check 10 year return (as long a timeline as my diminutive brain can grasp) and I like the security of the U.S. Likewise, currently LT bond funds, with their low returns, seem a real stretch as a safe (think inflation) investment. I hope for the day of 4-5% returning bond funds (with 1-2% real returns) but I don’t see it coming anytime soon. Overall, great book to reinforce principles and teaching to ignore financial media hype.

[Chan-joo Moon · Rating 4 out of 5]

Good overview of the things that are out there for retirement investing. Healthy dose of warnings to watch out for employers, insurance people, folks selling retirement plans, because they often have their own interests in mind. Also to watch out for yourself thinking you can make stock picks and time the market. He advises a balance of low cost index funds. I'd say a good read for anyone who is planning to invest in retirement. It was written well but it is pretty dry reading - the topic is what it is.

[Saad Aftab · Rating 4 out of 5]

Quick, concise and densely packed with information. Provides abundant context, pro's and con's for all accounts, mentioned on the cover. The book is basic enough to bring a beginner up to speed, but has enough information in it that even readers with an intermediate level of understanding will have plenty to takeaway. The only thing that can be improved upon, is a revision to bring it up to speed with where we are right now as it has been a while since it first came out.
Nonetheless, highly recommended for US residents.

[Jenn · Rating 3 out of 5]

A lot of this info in this book is outdated and requires you look up new tax rules for the current day (e.g, income limits for contributing to a Roth IRA). The core message of this book is useful: evaluate your employer provided retirement plans, advocate for better plans, and stay informed. However, it could have done a better job of introducing concepts - if you don’t know what a no-load mutual fund is, or any of the other financial terms used, lot of the advice will go right over your head. I’d recommend starting somewhere else like Broke Millennial.

[Alex · Rating 4 out of 5]

About as close to a how-to book as you can get without having a step 1, step 2, etc. guide to 401k selection. Quick read, really narrow scope to help a lay reader decide on how to invest into a 401k plan, common pitfalls, and what to expect as you approach/reach retirement age. This not a book on financial history so if you're looking for more background story, look elsewhere.
As with any book about time-sensitive subject matter, the specific plans discussed are a little dated so they might be called something else, but the advice on how to choose is timeless.

[kz · Rating 4 out of 5]

This book looks like it would be a snooze fest but there’s a lot going on in 401(k) plans that I can give props to this book on shedding the light on them. Mostly how 401(k) plans are mostly for the betterment of employers, and mutual fund salesmen and not the workers of any give private corporations.

[Snehann Kapnadak · Rating 4 out of 5]

Decent and tangible, though slightly outdated because it was published in 2008, advice on retirement funds. I like that there’s a “why it matters” summary at the end of each chapter that goes over the major points. Only thing I felt was missing was a definite guide of how to allocate your paycheck into different investment vehicles.

[Kirk G. Meyer · Rating 4 out of 5]

The book is well written and extremely basic. It would be an excellent book for an investor with a 401k that is not financially savvy. Has some good points and tips that are well worth reading about. Overall a good and informative book.

[Mo Coghlan · Rating 4 out of 5]

Really useful book. Blew my mind in a few ways. I will definitely be re-evaluating how my 401K is invested and will be checking out instant annuities. This book is a bit dated, but the basic premises still apply. Interesting, eye-opening stuff.

[Zakiyo Fields Jackson · Rating 5 out of 5]

Great book!

Learned lots! For beginners. Quick and easy read! Must have book if just starting to learn about retirement accounts. Great but!

[Mercurialgem · Rating 4 out of 5]

4.5

[Rebecca · Rating 4 out of 5]

Good solid book. Nothing mind shattering, but after all the books I've read I don't expect mind shattering. If/when I need to hire a financial advisor, I'll pick it up again.

[Will Rauber · Rating 4 out of 5]

A good review of retirement planning basics. Certainly a great place to start for those who feel overwhelmed.

[Rex · Rating 4 out of 5]

Good book. Baseline investment strategy for most of the people.

[Sarina Jenkins · Rating 3 out of 5]

Not the most interesting but helpful and straight to the point!

[Alex Barrett · Rating 3 out of 5]

Good basic guide, a little silly in some of its complaining about fees in funds while at the same time insisting they should have to issue individualized prospectus' (i.e. very costly printing fees that have to get passed on to customers) but if you read this and only this you'll likely do well with your investing.

[Elwin Kline · Rating 5 out of 5]

After separating from military service, I was at the decision point to invest into my new organizations 401k, or waive the opportunity to utilize this benefit. I picked up this book when I had my time to decide and look over all the different options. My goal was to learn all about 401k’s from this book and how to start a successful investment journey.

This was book lived up to all of its expectations and met all my goals. Coming in with zero knowledge, it taught me everything I needed to know to succeed. The "fill in the blank" portion of the book, where you decide how aggressive or passive you want to be is incredibly easy to follow... and even better... it works. All I have done is follow the guidelines within this book, did my own research, made sound decisions, and my 401k has been thriving. Reading this book was a very smart move and I am so glad I did so from the very beginning and didn't coast along without the knowledge gained within this book for any duration of time.

Why is it 5 stars, and identified as "It was amazing" ? -- Because of this book, my 401k is doing great and I am making free money. How could I give this book anything less?

If your 401k isn't doing so hot, if you know nothing about 401k's, or you want to open your mind to the world of investing... Then I highly recommend picking up this book.

[Paul Childs · Rating 4 out of 5]

Daniel Solin is a good honest writer when it comes to investing and this book should be read by anyone that has a 401k. Unlike most of the financial industry and press out there, he is not looking to make some money off of your investments.

The most important point to take away from this book is that no body cares about your investments as much as you do. With a minimum of planning you should be able to make sure you benefit from your investments more than the banks and investment firms whose only desire is to separate you from your money.

[Maryann · Rating 3 out of 5]

For the most part general advice, but it's always good to get a refresher, especially with the way markets have been lately. He really stresses to stay out the managed funds - the high fees get you over time and only 2% outperform a nice low fee index fund. Putting the bulk of funds into index funds like Wilshire 5000, S&P 500, etc is the way to go. He recommends 15% of income (can include company match) go to your retirement funds - which can include company 401k and also IRA's. I'm rebalancing my portfolio, so all in all this book had very good advice which I'll be using.

[Amanda · Rating 3 out of 5]

Good basic overview for beginners in retirement investing. All a little more simplistic than I was hoping for. (I feel like I fall into some middle ground that's not written for - I know the basics, I've drunk the kool-aid on low cost index investing, but I want a little more meat/strategy discussion. But because I've drunk the kool-aid, I don't want complicated stock picking sliced 900-ways analysis of some of the other stuff.)

Oh well. Refreshers never hurt. And I thought the asset allocation quiz was a more concrete useful guideline than many I've seen.