A Vision of Retirement Under the 20/20 Proposal

May 08, 2012

Would the government want to encourage workers to save LESS?  A recent proposal by the deficit reduction committee calls for a reduction to the total combined annual limitations for both the employer and employee to retirement savings plans.  Called the 20/20 Cap Proposal, the committee suggested a cap of the lesser of 20% of an employee’s compensation or $20,000 in annual total employer and employee retirement plan contributions.  Although this sounds higher than the current 2012 deferral limit of $17,000 that employees are restricted to now, the 20/20 Cap Proposal will also include employer contributions that now has a $50,000 or 100% of income limitation for 2012.  This combined limit of only $20,000 will severely limit the tax benefits of business owners to sponsor a retirement plan. According to the American Benefits Council, “ When a typical small business owner evaluates the significant legal responsibilities, risks, and costs of voluntarily sponsoring a retirement plan, it is often the promise of meaningful tax benefits for key employees that is the deciding factor in choosing to establish and maintain a retirement plan. But if tax benefits to decision-makers are substantially diminished, businesses that would have considered plan sponsorship may no longer do so, and existing plan sponsors might reduce employer matching contributions or stop offering retirement plans altogether. All employees would suffer because employer sponsorship offers considerable advantages for workers, including strict fiduciary standards; participation rules that ensure that benefits are delivered across all income groups; easy payroll reduction; lower fees from group participation; access to financial education; and often significant employer contributions.” Continue reading “A Vision of Retirement Under the 20/20 Proposal”

The Proposed Retirement Security Project: Could Retirement Plan Deductions Get Cut?

May 01, 2012

A recent tax reform proposal may bring the end to the cherished tax shelter of a retirement plan deduction.  During testimony to the U.S. Senate Committee on Finance last September, William Gale discussed a proposal to eliminate the current tax deduction on retirement savings plans and suggested replacing it with a flat-rate refundable credit that would be deposited directly into the saver’s account.  Gale, who is the Director of the Retirement Security Project at the Brookings Institution, wants to see a new incentive structure for contributions to retirement savings accounts by changing the treatment of retirement savings in three ways: Continue reading “The Proposed Retirement Security Project: Could Retirement Plan Deductions Get Cut?”

1 Week to Go – Remind Your Employees of the IRA Deadline

April 10, 2012

The IRS has given us 2 extra days to file this year due to April 15th falling on a Sunday and the recognition of Emancipation Day on April 16th.  This also provides a few extra days to consider contributing to an IRA.  Your employees are probably aware that any changes they make to their 401(k) contributions can’t impact last year’s tax picture but do they know about the ability to make a prior year contribution to an IRA and how an IRA contribution can increase their overall tax refund with a Saver’s Credit? Continue reading “1 Week to Go – Remind Your Employees of the IRA Deadline”

Mark Your Calendars: National Retirement Planning Week is April 9-13, 2012

April 03, 2012

Last week, I wrote about the importance of running a retirement calculator or a retirement preparedness assessment.  With National Retirement Planning Week coming up April 9 -13, 2012, there’s no better time to highlight the necessity of your employees knowing where they stand regarding their own retirement readiness.  This year’s theme is “Retire On Your Terms” and is sponsored by the National Retirement Planning Coalition.  The NRPC was formed by a group of prominent financial industry and advocacy organizations to raise public awareness of the need for comprehensive retirement planning and to recognize that the need to educate Americans on retirement planning is an ongoing effort and is committed to making this a national priority.  Members of the NRPC include the Jumpstart Coalition, the American College, EBRI, the Center for Retirement Research at Boston College, and the American Savings Education Council, along with many others. Continue reading “Mark Your Calendars: National Retirement Planning Week is April 9-13, 2012”

Does Calculating Your Retirement Needs Even Matter?

March 27, 2012

The resident financial planners at Financial Finesse handle a variety of difficult questions from employees representing many different walks of life and unique backgrounds.  One common area of concern these days is retirement.  In fact, nearly 31% of all employees indicate that retirement is their number one financial planning priority.  A recent helpline caller represented a perfect example of how a seemingly complex retirement planning scenario can be simplified using some quick and easy to use retirement planning tools.  Continue reading “Does Calculating Your Retirement Needs Even Matter?”

Employee Tax Education: Are Prep Fees Too Taxing on Your Lower Income Workforce?

January 31, 2012

For many lower income employees, their yearly tax return provides more than just a refund of their tax withholding – it can include refundable tax credits that can add thousands of additional dollars to their bank account.  The Earned Income Credit http://www.irs.gov/individuals/article/0,,id=150513,00.html (EIC) can add up to $5,751 for a working parent with 3 or more children making a yearly income of less than $43,998 and if the kids are under age 17 there could be up to an additional $1,000 child tax credit for each.  Because of these large refunds, many tax preparation services aggressively go after these taxpayers with the temptation of getting their refund immediately, instead of waiting the average 2 weeks it takes to get their tax refund directly deposited by the IRS. Continue reading “Employee Tax Education: Are Prep Fees Too Taxing on Your Lower Income Workforce?”

Sparking the Interest of Retirement Readiness with Your Employees

January 17, 2012

My favorite gift from this past Christmas has to be my new Kindle Fire.  I would have never bought one for myself, however, because I swore that the reading experience from turning the pages of an actual book could not be duplicated.  But now, I am a Kindle convert.  Not only because it gives the look and feel of a real page in a book; I now have access to hundreds of books for FREE in the Amazon bookstore.  Continue reading “Sparking the Interest of Retirement Readiness with Your Employees”

A Workplace Twist on Balance Transfer Day

December 20, 2011

In case you missed it, two Sunday’s ago was designated as Balance Transfer Day, based on a Facebook-led protest against big banks that encouraged consumers to switch their high interest credit cards for cards with lower rates or 0% teaser rates.  The December 11th protest was meant  to “beat the banks at their own game and demand the same 0% interest rate that they receive from the federal government,” the protest’s organizers said.  Hopefully, this put the spotlight on the high cost of finance charges that some consumers are facing with their credit card debt.  So where can you shine your own spotlight? Continue reading “A Workplace Twist on Balance Transfer Day”

The Impact of Financial Stress on Job Productivity

December 06, 2011

Stress is a part of life and isn’t necessarily a good or bad thing.  Personally, I prefer less stress.  But, in small doses stress can help us perform better under pressure and provide the necessary motivation to perform important tasks at home and at work.  As a busy financial planner with countless deadlines, assignments, travel requirements, and client service related demands, my work-life balance is always a challenge.  Thankfully, I thoroughly enjoy the opportunity to help others improve their relationship with money and admit that I do indeed enjoy the sometimes chaotic life of multitasking.  Continue reading “The Impact of Financial Stress on Job Productivity”

Surveying Employees: What’s Gained from the “Inner-view”

November 29, 2011

Whether you’re trying to get feedback on a new employee benefit, employee morale, or about company management, employee surveys are typically the best way to gather voluntary data and opinions from your workforce.  The problem is how to get the employees to actually participate so you can get their inner-view.  According to PPI, a workplace assessment company, employees ask themselves this question before participating:  “Is this survey safe to answer, and is it worth my time?”  Some feel that their anonymity will be compromised, others fear retaliation from management for their comments, and many simply think the process is an exercise in futility, with HR gathering the information, but doing nothing with it. Continue reading “Surveying Employees: What’s Gained from the “Inner-view””

Do Employees Need (or Even Want) Help with Asset Allocation Decisions?

November 22, 2011

When it comes to investment planning, sometimes it pays to get a little help (or at least a second opinion).  But what are the best options for providing guidance to employees and how does online advice fit into the mix?  Retirement plan participants have a variety of options available when seeking help regarding their investment selections.  Professionally managed accounts, target-date mutual funds, online advice, and the use of financial advisors outside the retirement plan are some of the most common sources of investment guidance employees typically utilize.  While these tools are proven to be effective, there is still a need to increase usage rates in order to improve the confidence employees feel relating to the way their investments are allocated. Continue reading “Do Employees Need (or Even Want) Help with Asset Allocation Decisions?”

What It Takes to Have a Winning Benefits Communications Plan for Your Employees

October 25, 2011

Congratulations to the most recent PSCA Signature Award Winners for 2011!  The Profit Sharing/401(k) Council of America (PSCA) announced the winners of their Signature Awards at a special presentation at its 64th Annual National Conference at The Mirage in Las Vegas last month, to honor excellence in plan communication and education.  This year, the Signature Award judges recognized 48 winners in 18 categories, based on how companies design, manage, and provide defined contribution communication and investment education to plan participants.  Signature Award judges carefully review how effective the campaign was at achieving its goals and I’m proud to say that 3 employers that I have worked closely with over the past few years, were recognized as 2011 Signature Award Winners. Continue reading “What It Takes to Have a Winning Benefits Communications Plan for Your Employees”

National Protect Your Identity Week

October 18, 2011

This week is National Protect Your Identity Week (PYIW), October 16th to October 22nd, 2011, so consider promoting this to your workforce.  Over 8 million consumers were victims of identity theft in 2010, so the odds are that your employees may have been a casualty of that statistic.  An employee that is dealing with identity theft is feeling financially stressed and distracted, and may be taking time during the workday to try to deal with the situation – leading to lost productivity.  Even worse, if the employee is a victim of medical identity theft, your group health plan could be impacted by false insurance bills from their imposter. Continue reading “National Protect Your Identity Week”

Taking Stock of Options and Awards

October 11, 2011

I recently spoke to a freshly minted MBA graduate who was so thrilled to have had landed her first job in this tough job market, but her icing on the cake was a sign-on bonus equal to ½ of her first year’s salary.  The catch to the bonus was that it was given to her in the form of a restricted stock award, so she had called me to find out the details.  She was very confused, because in addition to the stock award for the bonus, she is also eligible for a restricted stock matching program AND stock grants. Continue reading “Taking Stock of Options and Awards”

Nuisance Calls at Work

October 04, 2011

For the umpteenth time this year, I got a call last night from someone who is trying to track down my ex father-in-law.  The call came in on my business fax line (does anyone else even have a designated fax line anymore?) at 8:30 pm, and since my office is conveniently located 10 ft. away from my living room, I answered the call. Continue reading “Nuisance Calls at Work”

Roll Call: 24th Annual Benefits Forum and Expo 9/25 to 9/27

September 20, 2011

Employee Benefit News’ Benefits Forum and Expo is the largest event in the nation solely dedicated to employee benefits, so are you planning on attending?  If so, you’ll be among many senior benefits professionals who will be traveling to Dallas, TX next week.  I won’t be there myself, but make sure to look for the Financial Wellness at Work track on the conference agenda, which kicks off the day on Sunday, September 25th. Continue reading “Roll Call: 24th Annual Benefits Forum and Expo 9/25 to 9/27”

Back to School Season Brings Tuition Bills to Your Employees

September 13, 2011

It’s that time of year again.  Summer is coming to an end (already!) and college classes are starting.  You know what that means for your employees that are parents – time to start writing those checks!

Unfortunately, sometimes those checks have nowhere else to come from but their retirement accounts.  If you handle the day to day administration of your retirement plan, do you notice an uptick in hardship withdrawal and loan requests around this time of year?  If so, these looming college costs could be the culprit.  According to the College Board, the average tuition this year is almost $8,000 for an in-state public university, and that doesn’t even include room and board, books, and other typical costs. Continue reading “Back to School Season Brings Tuition Bills to Your Employees”

Eldercare’s Impact on the Workforce: The Hidden Cost of Caregiving

September 06, 2011

Last month, my in-laws came along for a weekend trip to Florida, and it gave me a very small taste of what many caregivers experience on a daily basis.  My father-in-law (Gene), who is in his early 70s, has diabetes, heart problems, and is severely overweight and because of these ailments, he has dietary limitations and needs help getting dressed and putting his shoes on.  To give my mother-in-law a break that weekend, we took her “off-duty” and my husband and I soon came to realize why she has been under so much stress lately. Continue reading “Eldercare’s Impact on the Workforce: The Hidden Cost of Caregiving”