Archive for August, 2018

Does It Still Make Sense To Give To Charity?

Wednesday, August 15th, 2018

2017 may be the last year that tens of millions of Americans got a tax break for donating to their favorite charities. That’s because the new higher standard deduction of $24,000 per couple ($12,000 single) that President Trump signed into law last December means that only a tiny percentage of taxpayers likely will take itemized deductions, such as those for charitable donations. Still, many donors will continue to give, because the main goal of charitable giving is doing some good.

Financial Education for Employees

Tuesday, August 14th, 2018

General financial education, in addition to education specific to 401(k) plans, can encourage employees to save more for retirement. Topics like budgeting, debt management and reduction, and finding ways to save on household purchases may allow employees to feel more confidence in contributing more of their income to the plan. In turn, that can lead to improved retirement readiness.

It’s wise to consider employee interests when selecting topics, because there is some disconnect between what employers think is important for employees to know, and what employees really want to know. For example, 81% of employees want more education about how to obtain life insurance, but only 68% of employers thought they would. Forty-seven percent of employees want to know about saving for children’s education, compared to 24% of plan sponsors. And refinancing or paying off student debt is on the minds of 46% of employees, but just 18% of employers said it was important.

You might consider an employee survey to identify the financial topics that are truly on the minds of your employees. That way, you may get greater participation in the sessions — as well as in the 401(k) plan. Read more in the Alight 2018 Hot Topics in Retirement and Financial Wellbeing report, here: https://tinyurl.com/Alight2018HotTopics.

New Tax Law Preserves Medical Deduction

Friday, August 10th, 2018

For the next 18 months, Americans with high medical bills will be able to continue to write off expenses exceeding 7.5% of their income. To claim the deduction, filers must itemize. However, now that the standard deduction has been increased to $12,000 for individuals, $24,000 for joint filers, it may make sense to simply claim the standard deduction, according to the AARP.

Taking Advantage of the New Tax Law

Monday, August 6th, 2018

The dust hasn’t yet settled, but a few things about the new tax law seem clear. Employees will likely begin to notice a difference in their paychecks as early as February, and some projections put the average worker’s additional spendable income at about $2,000 per year.

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What To Do In August

Thursday, August 2nd, 2018

• Begin preparing for the distribution of the plan’s Summary Annual Report to participants and beneficiaries by September 30, unless a Form 5500 extension of time
to file applies (calendar-year plans).
• Submit employee census and payroll data to the plan’s recordkeeper for mid-year compliance testing (calendar- year plans).
• Confirm that participants who terminated employment between January 1 and June 30 elected a distribution option for their plan account balance and returned their election form. Contact those whose forms were not received.

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