Are 72(t) Plans Too Good to Be True? (For Most of Your Clients, Yes)

Posted by Sheryll Yee

March 12, 2019 at 10:00 AM

Although IRAs are intended to be long-term retirement savings vehicles (like employer-sponsored retirement plans), unexpected financial needs can arise, and your clients may find themselves wondering if they should tap into their accounts. Typically, IRA owners who distribute assets from their account before age 59½ are subject to a 10-percent early withdrawal penalty on the distribution amount. But with 72(t) plans, also known as a substantially equal periodic payment plans, IRA owners can distribute assets before age 59½ and avoid that penalty (though normal income tax rates would still generally apply).

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Topics: Retirement Consulting

How Good Are TDFs at Managing Retirement Savings Risks?

Posted by John Chevalier

January 2, 2019 at 1:30 PM

Vanguard’s “How America Saves 2018” study reveals that roughly 50 percent of defined contribution plan participants use a target-date fund (TDF) as their sole investment. By 2022, this figure is expected to grow to 70 percent. But should retirement savers be relying solely on these set-it-and-forget-it vehicles? Does that change depending on when they first started saving? And how effective are these funds at managing retirement savings risks, particular as investors approach this next life stage? As a financial advisor guiding investors to a comfortable retirement, it’s important that you can answer these questions. So, let’s take an in-depth look at TDFs.

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Topics: Retirement Consulting

The Yearly Must-Do: Review Clients’ Retirement Accounts

Posted by Sheryll Yee

October 10, 2018 at 1:30 PM

Although it’s best practice to monitor clients’ retirement accounts throughout the year, many advisors are guilty of leaving certain annual tasks for the last minute. To help ensure the alignment of plans and objectives, advisors should take the time to periodically review clients’ retirement accounts—in particular, their beneficiary designations, current contributions, and distribution requirements.

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Topics: Retirement Consulting

Implementing an ESG Investment Strategy in the Qualified Plan Space

Posted by Michael Geraci, MSF, CRPC, AIF, CIMA

October 3, 2018 at 1:30 PM

Environmental, social, and governance (ESG) investing continues to garner attention. The ability to invest in those companies that are mindful of sustainability practices, social issues, and other mission-related concerns allows investors to have some say in what’s important to them. When considering whether to offer ESG-focused funds in qualified plan lineups, however, advisors and plan sponsors need to be aware of the legal framework for fiduciaries and how the U.S. Department of Labor (DOL) views the investing style. Here, I’ll break down the details that go into implementing an ESG investment strategy, as well as some important DOL and due diligence considerations.

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Topics: Retirement Consulting

Picture This! A Better Way to Connect with 401(k) Participants

Posted by Dan Collins

October 2, 2018 at 10:00 AM

I must confess—I love emojis (   ). Why? Because they’re an easy, lively, and memorable way to communicate. Research supports the effectiveness of images over words—when people hear information, they're likely to remember only 10 percent of that information three days later. But if a relevant image is paired with that same information, people remember 65 percent three days later. How can you apply this knowledge in your business? If you work with qualified retirement plans, I bet you have a hard time getting employees to stay engaged and interested long enough for you to teach them all they need to know about saving for retirement. Maybe it’s time to change things up a bit, so you can better connect with 401(k) participants.

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Topics: Retirement Consulting

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