In today’s episode we invited Jessica Okamoto from Thrivent Financial, she is my go-to financial expert when it comes to investing, preparing for retirement, diversification, and being tax efficient.

How to lay a good foundation before saving for retirement?

Having a proper foundation is the first steppingstone. Make sure that you have a 3-to-6-month emergency fund to cover essential living expenses. If you have children or minors under your care is highly recommended, you set up a will and trust to outline who their guardian will be in case something happens to you. In the same will and trust you can include your home, so it doesn’t go to probate. Depending on your line of work, disability insurance may be a good option for you as well.

How should I start my retirement account?

If you have a 401K match or contribution from your employer, make sure to set it up. Some employers will match your contributions which means you get free pre-tax money.

Another product employers may offer is a ROTH IRA (individual retirement account), this tool allows you to save for retirement after paying taxes, so when you get to age 65, you don’t have to pay a large bill to the IRS.

How to use my retirement to buy a home?

  1. You can borrow against your retirement account and use those funds towards your down payment and pay yourself back after closing through your paychecks to replenish that account.
  2. You can withdraw up to $10,000 towards a down payment – penalty free for most of the time – to use the funds to buy a home. Remember, if you are withdrawing against your 401K account, then you’ll be liable for paying taxes at the end of the tax year.
  3. You can take out a 60 day roll over once per calendar year in your ROTH IRA. This means you withdraw against your retirement account, penalty free and tax free and must pay it back to your account in 60 days. This is a great option when you are buying a home, but your current home has not sold yet, and you need money towards your down payment and can quickly replenish your retirement account after the sale of your home.

What does it mean to be diversified?

It means to allocate your funds in different investments vehicles, such as pre-tax retirement accounts commonly known as 401Ks, after-tax ROTH IRA accounts, as well as real estate and stocks. There are also bonds which are low risk investment. A 10% investment of your entire portfolio in each account is a smart way to start.

Want a free consultation? Connect with Jessica Okamoto in LinkedIn at