Many American workers recognize that achieving financial stability in retirement requires dedication, thoughtful preparation, and a solid grasp of 401(k) plans and other investing tools.
Jean Chatzky, former financial editor for NBC’s “Today Show” and founder of HerMoney, reflects candidly on how she might have approached the challenge with greater strategic insight.
She also reveals how some 401(k) plans are rapidly changing by adding some surprising features and greater levels of complication.
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In a recent conversation with TheStreet, Chatzky urged Americans to recognize the importance of taking ownership of their retirement planning.
She highlighted how, unlike previous generations, many Gen Xers no longer have widespread access to pensions, making 401(k)s and other personal retirement savings the cornerstone of their financial future.
Reflecting on her own experience, Chatzky noted that the most common advice she and others wish they had followed sooner is to start investing earlier.
Early in her career, Chatzky received a 401(k) at a time when the concept was still new to many, and she admits she didn't fully understand how to leverage it.
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At one point, she withdrew the funds from her first retirement account and spent them on purchases such as expensive clothes for her new job — an impulse she now sees as a costly error.
Chatzky acknowledged that she didn't become an engaged investor until she began working more deeply in the personal finance field in her 30s.
Her reflections serve as a candid reminder of how crucial it is to build financial literacy early and make thoughtful decisions with long-term goals in mind.
Chatzky also explains how many current 401(k) plans are undergoing significant changes now — and why it's wise to take some time to understand the new retirement savings landscape.
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Jean Chatzky urges Americans to learn about new 401(k) changes
“More 401(k) plans are adding annuities or ‘guaranteed income lifetime income options,'” Chatzky wrote in a July 1 newsletter sent by email to TheStreet. “Others are preparing to add private investments, like private equity or private credit.”
“Some are even dabbling in crypto,” she added.
Chatzky also pointed to upcoming changes in retirement savings rules that could significantly impact those approaching retirement age.
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She highlighted a new provision allowing individuals between the ages of 60 and 63 to make so-called “super catch-up” contributions — up to $34,750 in a single year — to their 401(k) plans, provided their income is high enough to permit it.
Chatzky noted that starting next year, higher-income individuals aged 50 and older will also face a shift in how they make catch-up contributions.
Rather than adding to traditional 401(k)s, they’ll be required to deposit those additional funds into Roth accounts, which are taxed upfront but can grow and be withdrawn tax-free later.
According to Chatzky, these changes underscore how essential it is to stay informed and proactive about evolving retirement policies, particularly for those in their peak earning years.
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Jean Chatzky explains key fact on 401(k) developments
Chatzky warns Americans about an important consideration to know about 401(k) plans.
“More plan features don’t automatically mean better planning,” she wrote in the newsletter.
Chatzky pointed to a HerMoney story written by Pam Krueger, CEO of Wealthramp.
“All of that might all sound like a ‘win’ for retirement savers and in some ways, it is,” Krueger wrote. “But it also means you’re being asked to make bigger decisions, with higher stakes and not nearly enough guidance.”
The inclusion of unconventional assets such as cryptocurrency in retirement plans is becoming more common, stirring both interest and concern, Krueger explained.
While private equity and private credit are increasingly showing up in 401(k)s, they tend to be costly, complex, and less transparent than traditional investments.
Cryptocurrency carries similar risks, particularly following high-profile scandals and evolving regulatory pressures.
“The Department of Labor’s earlier warnings against putting crypto into 401(k)s have been pulled back, leaving it up to each employer to decide whether to allow it,” Krueger wrote.
Related: Tony Robbins sends strong message to Americans on 401(k)s
