The Partners Circle

The mission of the Partners is to empower all of us to go directly to each other with our expertise. FiduciaryFirst is considered an industry leader and our knowledge and informative blogs can help you gain an understanding about key topics within the industry.

3 Ways to Save for College Explained: Prepaid Tuition Plans, 529 Plans and ESAs

3 Ways to Save for College Explained: Prepaid Tuition Plans, 529 Plans and ESAs
According to collegeboard.org, the average yearly full-time student budget for tuition and fees, room and board, books, and other incidentals at an in-state public four-year college is currently more than $25,000. For a private four-year college, that costs skyrockets to more than $50,000. With the potential total price of an undergraduate degree now topping $200,000, parents are understandably concerned about how they’re going to handle such a daunting expense. Fortunately, there are a number of options available for parents trying to fund the dream. Here’s a comparison of three popular plans. Prepaid Tuition Plans If you’re fortunate enough to live in a state that still offers a prepaid plan, then you may be able to save ahead and lock in tuition at current rates at eligible schools. Plans may cover two-year community college, four-year programs or even graduate school in some cases. It’s important to note that they do not,...
Continue reading
8 Hits

Loss Aversion: Fighting the Fear

Loss Aversion: Fighting the Fear
Loss aversionsounds like a good thing — trying to avoid losing. What could be wrong with that? Unfortunately, if taken too far, it can actually be a threat to your long-term financial health. Loss aversion is the tendency to prefer avoiding potential losses over acquiring equal gains. We dislike losing $20 more than we like getting $20. Yet, this common bias can come with a heavy cost. Excessive risk avoidance can hurt you when, for example, it keeps your money out of the market and tucked away in low-risk, low-interest savings accounts — where purchasing power can be eroded by inflation over time. Delaying enrollment in your employer-sponsored 401(k) plan due to fear of market downturns can cripple opportunities for future growth. Loss aversioncan also lead to undue stress and anxiety. You stay invested, but worry constantly, which can create health and other problems. Finally, it can result in shortsighted...
Continue reading
123 Hits

What Age Should You Retire?

What Age Should You Retire?
When we think retirement age, 65 is often the first number that comes to mind. But that doesn’t mean it should be your final answer. While it’s often a starting point for consideration, there are several factors that could make another age a better choice for you. Here are eight considerations to keep in mind when making this very important decision. 1. Your plans.If you want to start a business, run a charity or create a foundation — those could take a while to get off the ground. Make sure you allow enough time for your dreams to come to fruition. 2. Your money.While you may want to retire by 60, you might not be able to afford to given your current savings. In that case, delaying retirement and working a few extra years may be well worth the wait. 3. Your health.Do you have any chronic or progressive health...
Continue reading
142 Hits

The 1% Change That Can Really Make a Difference

The 1% Change That Can Really Make a Difference
Sometimes small moves can yield big results. If you want to plan for a better, more secure retirement, start by increasing your 401(k) contribution by just 1%. You might be thinking that 1% can’t possibly make that much of a difference — but you’d be wrong.Here’s what Fidelity Investments found when they ran the numbers on the effect of a 1% retirement account increase for employees at different ages and salary levels. Example #1: Suzi, age 35, earning $60,000 per year.If she put less than $12 more into her retirement account each week, Suzi could accrue over $85,000 more by retirement.* What could that money buy her?According to cars.com the average new car payment is now $523 per month. With her additional savings, Suzi could ride in style for 162 months during retirement — that’s more than 13 years of new car smell! Example #2: Andrew, age 45, earning $70,000...
Continue reading
207 Hits

Missing Participants: Are You Doing Enough to Find Them?

Missing Participants: Are You Doing Enough to Find Them?
Recent Department of Labor (DOL) letters have threatened sanctions against plan fiduciaries for potential Employee Retirement Income Security Act (ERISA) violations regarding the handling of missing participants. The DOL also cited potential violations involving the timeliness of required minimum distributions for participants nearing the age of 701/2. This occurred despite a lack of clear-cut guidance from the DOL regarding best practices and appropriate administrative procedures for handling instances where prior employees cannot readily be located. As a result, plan sponsors have been required by Labor Department auditors to follow procedures regarding required minimum distributions (RMDs) not documented from any previous formal guidance. In response to concerns expressed by plan sponsors, the Internal Revenue Service, DOL and Pension Benefit Guaranty Corp. (PBGC) have released guidance regarding the steps plan sponsors and administrators should take when attempting to locate separated participants, including: Searching plan, employer, sponsor or other publically available sources of...
Continue reading
141 Hits

Four Ways to Increase Employee Retirement Contribution Participation

Four Ways to Increase Employee Retirement Contribution Participation
As a retirement plan sponsor, can you encourage your employees to save and save more? A significant amount of research says that yes, you can improve both employee participation and their saving rates. Here are four ways you can help your employees start building a confident retirement: Boost employee participation with automatic enrollment. Choosing to automatically enroll all new employees in your retirement plan can dramatically improve your participation rates. According to the Center for Retirement Research (CRR) at Boston College, in one study of automatic enrollment, participation increased by 50 percent, with the largest gains among younger and lower-paid employees.1 While auto-enrolled employees are allowed to opt out of the retirement plan, most generally stay enrolled. Set the initial default contribution rate higher. Many companies who use auto-enrollment set their default contribution rate relatively low at three percent, according to the CRR, which is lower than the typical employer match rate of six...
Continue reading
231 Hits

IRS Tips for Plan Sponsors

IRS Tips for Plan Sponsors
As an employer, you’re ultimately responsible for keeping your company’s 401(k) plan in compliance at all times. Your plan document should be reviewed on an annual basis and administered accordingly. The IRS offers useful tips for plan sponsors to help in those efforts. Here are some highlights on their guidance. Understand and verify your adoption agreement options.For pre-approved plans, you may have an adoption agreement that supplements the basic plan document and lists features that may be selected. It’s important to understand this document and specifically what it says about plan eligibility, types and limits of contributions, how contributions are divided among plan participants, vesting and paying benefits. Educate yourself about your service agreement. As a plan sponsor, it’s important to understand what your service agreement does and does not cover. For administrative tasks, it’s imperative to know who will perform these and to make sure that person has the...
Continue reading
143 Hits

Happy 40th, 401(k): Changes Are Coming

Happy 40th, 401(k): Changes Are Coming
It’s hard to imagine a time before 401(k) plans, but employee fiduciary risk management once relied heavily on employer-backed pensions. Over the past four decades, 401(k)s have grown in popularity as businesses realized the benefits that come with them. While 401(k)s have seen incredible growth since their inauguration, their 40th anniversary is a great time to review the program, its process, and how it could improve. Here are a few things businesses can consider implementing regarding their own 401(k) offerings. Easier Onboarding Once new employees are hired, it becomes difficult to add them to a 401(k). Paperwork is already a standard part of their first day, so why not include paperwork for 401(k) enrollment? By incorporating 401(k) signups from the getgo and making opting in the default, businesses can increase participation and ensure as many employees as possible are enjoying retirement planning perks. Unfortunately, one major deterrent to 401(k) participation...
Continue reading
534 Hits

Client Lockbox

Contact Details

1060 Maitland Center Commons

Suite 360

Maitland, FL 32751

Phone: 866-625-4611

Fax: 407-740-6113

Email: info@fiduciaryfirst.com