What Is A Bond?

January 16th, 2020

A bond is a security, generally issued for a period of more than 1 year, that is used to raise capital by borrowing from a lender. The U.S. and foreign governments, states, cities, corporations, and many other entities sell bonds.

Bonds generally pay a stated rate of interest over a specific period of time, and issuers promise to pay that interest along with a return of the investors’ principal when the bond matures.

Auto-Features Accomplished; What’s Up Next?

January 14th, 2020

Retirement income options may be coming soon.

You can almost hear the retirement plan consultants ticking the boxes on their to-do lists: auto-enrollments? Check. Auto-increases? Check. With widespread implementation of these features firmly entrenched, the next focus may be retirement income options in 401(k) plans. That’s one of the findings from recent queries of 238 consulting and advisory firms. Roughly two-thirds of the consultants who were asked about the future of plan design said they believe their plan Read the rest of this entry »

Are You Prepared For The Unexpected?

January 9th, 2020

Life has unexpected expenses: car or appliance repairs, for example. It may be helpful to create a rainy-day fund in a separate checking account for small financial shocks like these. Also create an emergency fund which should have enough to cover an unexpected job loss or serious family health issue.

Many financial experts recommend setting aside as much as 9 months of living expenses to keep you afloat during emergencies, but you can certainly start smaller, with a goal of socking away 2 months of salary.

 

Retirement Savings To Fund Emergencies

January 7th, 2020

Have you noticed a lot of loan activity among your employees suggesting they are using their retirement savings to fund emergencies? Lots of Americans are finding it difficult to fund even small emergencies from their bank accounts, as demonstrated by the proliferation of payday loans, early withdrawals and loans from 401(k) plans.

One way to help may be the sidecar IRA, an account to which employees can direct after-tax money through payroll deduction. Once the account is funded to the extent desired by the employee, the payroll deductions can then be directed toward pretax retirement savings.

Read the rest of this entry »

January Checklist

January 2nd, 2020

  • Send payroll and employee census data to the plan’s recordkeeper for plan-year-end compliance testing (calendar-year plans).
  • Audit fourth quarter payroll and plan deposit dates to ensure compliance with the S. Department of Labor’s rules regarding timely deposit of participant contributions and loan repayments.
  • Verify that employees who became eligible for the plan between October 1 and December 31 received and returned an enrollment Follow up for forms that were not returned.Consult your plan’s financial, legal, or tax advisor regarding these and other items that may apply to your plan.

 

Saver Or Spender?

December 20th, 2019

In most families there are two types of people – the savers and the spenders. Statistics suggest that many couples argue or even divorce over money issues, and this is predominately due to either not making enough money or spending too much money.

It is important to understand your attitude towards money; mostly it is formed during our childhood. If someone had parents that were constantly arguing about a lack of money, this often turns them into a dedicated saver as they don’t want to be in the same position as their parents. Conversely, a person who grew up in a family that didn’t talk about money, or where money posed no issues, often emerges as a spender because of the lack of financial guidance. Read the rest of this entry »

Are You Getting Good Value From Your Fund Investments?

December 17th, 2019

Each quarter, you should receive information in a statement from your plan administrator about the fees and expenses charged to your plan. This fee disclosure is designed to help you assess the value you receive by participating in your plan, and to help you compare your investment options on an apples- to-apples basis.

This “plan-level” and “investment-level” disclosure information is required to be posted on a publicly accessible website. Check with your plan administrator if you have questions.

When it Make Sense To Work With An Accountant

December 11th, 2019

Some only contact a CPA once a year —  when preparing a tax return.

But checking in with a knowledgeable CPA before taking money from your retirement account, or a traditional or inherited IRA, may help you avoid poorly timed withdrawals that may increase your taxable income, or the taxes you pay on your Social Security benefits.

Hiring a tax advisor can ultimately save you a lot of money over the course of a retirement that can last 30 years or more

Participant Lawsuits Against 401(k) Plans

December 4th, 2019

Companies strive to do their best to avoid situations that could lead to participant lawsuits against 401(k) plans. Part of that is using prudent processes in the plan.

Since the inception of the Employee Retirement Income Security Act of 1974 (ERISA), the prudent person rule has provided a good rule of thumb. To paraphrase, it states that an appropriate decision is one that a prudent person, with similar skill and circumstances, would make. It does lack Read the rest of this entry »

December Checklist

December 2nd, 2019

  • Prepare to send year-end payroll and updated census data to the plan’s recordkeeper in January for year-end compliance testing (calendar-year plans).
  • Verify that participants who terminated during the second half of the year selected a distribution option for their account balance and returned the necessary
  • Review plan operations to determine if any ERISA or tax-qualification violations occurred during the year and if using an IRS or DOL self-correction program would be appropriate.

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