Are You Considering Auto-Enrollment for Your Company’s 401(k) plan?

July 23rd, 2018

The upside of using auto-enrollment (and auto-escalation) features in a 401(k) plan are considerable. Participants in plans that use auto-enrollment seldom opt out, even when they are enrolled at 6% to 10% of pay. This has resulted in many new participants saving for their futures. Recently, though, a study was done that suggests people who are automatically enrolled in their plan may take on more debt than they would have otherwise.

Read the rest of this entry »

Summertime and Financial Organization

July 21st, 2018

Summertime is a great time to get organized.

From a tax or portfolio management perspective, the dog days of summer don’t have much going on. But it’s still a great time to organize your financial records and get ready for the second half of the year.

How easy is it for you to put your hands on bank statements, tax receipts, IRAs or estate planning documents? Office supply stores have sturdy file boxes for keeping all your records in one place. Set up file folders to contain all your most important financial papers and records.

Test Your Money Smarts

July 17th, 2018

Think you have a good handle on the basics of investing? Take this 10-question quiz to see how you rate on basic investment skills.

  1. If you buy a share of company stock,
    1. You own a part of the company.
    2. You have loaned your money to the company.
    3. You become responsible for the company’s debts.
    4. The company will return 100% of your investment to you, with a fixed rate of interest.
  2. If you buy a company’s bond,
    1. You own a part of the company.
    2. You have loaned your money to the company.
    3. You become responsible for the company’s debts.
    4. You have a say in how the company is managed.
  3. Since 1929, the type of investment that has earned the most money for investors has been:
    1. Stocks.
    2. Bonds.
    3. Savings accounts.
    4. Certificates of Deposit (CDs).
  4. If you buy the stock of a new company,
    1. You cannot lose money.
    2. You can lose all the money you used to buy the stock.
    3. You can lose only a portion of the money you used to buy the stock.
    4. The FDIC will insure the investment you made in the stock.
  5. Kendrick owns a wide variety of stocks, bonds and mutual funds to lessen his risk of losing money. This is called:
    1. Saving.
    2. Compounding.
    3. Diversifying.
    4. Shorting.
  6. What asset class has, on the whole, produced the best performance results since 1929?
    1. Bonds
    2. Stocks
    3. Gold
    4. Bitcoin
  7. Tom wants to have $100,000 in savings in 20 years. The sooner he starts to save, the less he’ll have to save because:
    1. The stock market will be higher in 20 years.
    2. Interest rates will be higher in 20 years.
    3. Interest on his savings will start compounding.
    4. Inflation will reduce the purchasing power of his $100,000 goal.
  8. Mutual funds have a number of attractive characteristics for retirement plan investors, EXCEPT (pick one):
    1. They are guaranteed to earn more than bank savings accounts.
    2. They are managed by experts at picking investments.
    3. They offer risk-return potential that reflects the many types of securities they invest in.
    4. They pool money from many different investors.
  9. Which all-in-one investment is designed to get more conservative as you approach retirement?
    1. Roth IRA
    2. Fixed annuity
    3. Target-date fund
    4. Money market fund
  10. All the following statements are true about International Investing EXCEPT (pick one):
    1. There are more companies outside the U.S. than inside the U.S.
    2. International investments are often used to broaden diversification and spread investment risk.
    3. There are particular risks involved with investing internationally, including political risk and currency and liquidity risks.
    4. International stocks always offer more return than U.S. stocks.

Halfway Through The Year

July 12th, 2018

As featured

In our home, July marks our ‘check-in’ chats: discussions on any travel plans for the remainder of the year, whether we should upgrade any furniture or get a newer car, and so on. But our biggest and sometimes most ‘heated’ chat is regarding the semi-annual review of our finances and update of our ‘net worth statement’.

Let’s be serious. When two people come together and comingle their lives [which typically includes joining their finances], a difference of opinion on how it should all be managed is always going to cause ‘a little heat’ in the kitchen. In our home it is no different: neither one of us really wants to ‘learn the truth’ of how our finances are doing overall, but we accept the fact that in order to build the reserves we need for our retirement years, it is imperative that we update our net worth statement semi-annually.

A couple of years ago I was chatting to my grandfather, who has just turned 99 this year, about the balancing act between enjoying life and also building your wealth as a couple. He said this to me: ‘In every relationship, there will be the “spender” and the “saver”. The spender lives for the here and now and wants to enjoy life to the fullest. The “saver” is always thinking of the end game and will enjoy a modest lifestyle in order to secure their long-term goals. However, at the end of the day, a “spender” will become a liability to the “saver”, and their union will eventually crumble unless the spender changes.’ I think it is a fantastic piece of marital advice, considering that in 2015 I read an article in The Wall Street Journal stating that 41% of all marriages in the United States end in divorce because of money issues.

So how do you create and maintain a net worth statement so you can compare what you own [your assets] with what you owe [your liabilities]?

Firstly, you do not need a high-tech programme – a simple excel spreadsheet will work just fine. The best way to start is to create two columns: label one “Assets” and the other “Liabilities”.

Under “Assets”, individually list each asset, where it is held and how much it is worth.

For example: Bank Account [Savings] – BNTB – $2,000.00

Make sure to include all your assets: bank accounts, pensions, investments, life insurance cash value, real estate, personal property, etc.

Under “Liabilities”, individually list each debt, where it is held, how much is owing, the interest rate and the amortization schedule.

For example: Mortgage – Clarien Bank – $650,000 – 6.5% – 22 years

Make sure to include anything you owe: credit cards, mortgage, loans, etc.

Once you have listed all your assets and liabilities, total each column on your spreadsheet; this will give you a complete picture of what you own versus what you owe. The next step is the most important. Deduct your liabilities from your assets and this will give you your actual net worth.

Sit down and create a plan with your partner to determine how often you intend to update it. For our family it is twice a year [January and July]; for yours it could be simply once a year, but the golden rule is at a minimum is should be annually, and it needs to be done in the same month every year.

A great benefit to updating your net worth statement is that you will discover three very important facts:

  • 1. Where your assets are held
  • 2. How your assets are allocated
  • 3. How much liability is associated with each asset

When you make it part of your routine to update your net worth statement, you will also be able to compare the historical data against your current financial goals to track your progress.

For example:

In 2017, was your goal to pay off your credit card?

  • Upon reviewing your net worth statement, do you still have a balance on your credit card?

In 2017, was your goal to put additional funds into your pension plan?

  • Upon reviewing your net worth, has your pension balance increased by more than just investment return?

In 2017, was your goal to build an emergency fund for 2017?

  • Upon reviewing your net worth statement, do you have a new account with additional money saved?

Remember, you work hard for the money you are making, and you need to work equally hard to make sure your finances are monitored so you can accomplish your long-term financial goals.

Carla Seely is the Vice President of Pensions and Investments at Freisenbruch-Meyer. If you would like any further details, please contact her at or call +1 441 297 8686.

What To Do in July

July 3rd, 2018


  • Conduct a review of second quarter payroll and plan deposit dates to ensure compliance with the Department of Labor’s rules regarding timely deposit of participant contributions and loan repayments.
  • Verify that employees who became eligible for the plan between April 1 and June 30 received and returned an enrollment form. Follow up for forms that were not returned.
  • Ensure that the plan’s Form 5500 is submitted by July 31, unless an extension of time to file applies (calendar-year plans).

Consult your plan’s financial, legal or tax advisor regarding these and other items that may apply to your plan.

Planning For Your Child’s Education

June 21st, 2018

As parents, you want to make sure your children have the best education possible, yet the cost of schooling and university can be extremely high. The money that you spend on your children’s education can be one of your largest lifetime expenses, so saving early is key.

Starting to save early will enable you and your child to select an excellent school or university based on the programme and their academic ability, rather than your financial situation. Read the rest of this entry »

2018 Retirement Trends to Watch

June 13th, 2018

In-plan spending strategies becoming more important

Among retirement industry trends to watch in 2018, along with how to save money in a 401(k) plan and other retirement accounts, is how to spend those savings.

A retirement industry think-tank expects a growing number of plan sponsors and industry stakeholders to evaluate retirement income solutions and de-accumulation strategies for DC plans. The expectation is that, with the growing impact on the workforce of an aging population, increased emphasis will be placed on the distribution of plan assets.

In-plan retirement income solutions will likely continue to evolve. The goal is to provide retirement plan participants with greater flexibility in how their plan assets are distributed to them. The Institutional Retirement Income Council (IRIC) believes such in-plan retirement income solutions will become a greater component of employer-sponsored financial well-being programs and that spending components should increase retirement readiness among employees.

Federal government provides guidance to offset fiduciary concerns in innovation

With the discussion of retirement income solutions as a backdrop, there is concern that innovation in these products, as well as alternative investments, could be stifled in 2018 by concerns about fiduciary risk. Some consultants may hesitate to propose innovative products to their plan sponsor clients, out of concerns about litigation. However, the U.S. Department of Labor and the Treasury Department have provided helpful fiduciary guidance that may help plan sponsors add retirement income strategies to their plans. And, legislation has been proposed that should continue to have a similar effect in supporting lifetime income options.

Another trend to watch, of course, is the impact of the new tax law. IRIC’s position is that the changes will likely provide additional savings opportunities for plan participants, and that it creates an ideal opportunity to re-think Roth features. Participants can likely benefit from additional education about Roth and how these accounts may affect their retirement readiness.

Read more about IRIC’s predictions for 2018 in this press release:

Five Money Rules to Live By

June 5th, 2018

It’s not simply a matter of working harder; it’s much more about using your non-financial skills and talents in new ways to bring you prosperity and a greater sense of personal satisfaction. Here are five tips to follow when seeking balance in your finances. Read the rest of this entry »

Jumbles of Numbers

June 4th, 2018

Without setting your life goals, saving and investing can seem like a bunch of disconnected facts and figures

For many investors, the process of monitoring progress to retirement can seem to swirl around a bunch of numbers: portfolio performance, market index returns and portfolio rebalancing percentages, to name a few.

These are important figures to keep in mind, but they miss a key critical element: how you go about defining and prioritizing your unique life goals, and then tracking your progress toward them. Here are five ways to make sure   that the numbers don’t sidetrack you from what’s really important — living the personally enriching life you have imagined for yourself.

Start with the big picture. The way you view your long-term financial picture generally can be segmented into three goal “buckets:” your needs (think housing, health care), wants (hobbies, travel) and wishes (fishing boat, new outdoor kitchen). Read the rest of this entry »

Attract Millennials with Values-Based Investment Options

June 4th, 2018

It isn’t surprising that average contributions are generally lower for younger 401(k) plan participants. Not only is retirement much farther down the road for them than it is for their Generation X and baby boomer colleagues, many of them struggle with more debt and less income. On average, they contribute about 5.3% of pay to their retirement plans, compared to 6.6% for Gen Xers and 8.6% for baby boomers. Read the rest of this entry »