Are Young Workers On Track For Retirement–Or Smoking Something?

Younger employees may benefit from watching the over spending baby boomer generation struggle with their finances. The boomers over spending and debt is prevednting many from retiring at 65. The younger generation realizes that they and they alone are responsible for their own financial future.

retirement (Photo credit: 401(K) 2013)

Yet for all their interest in a social media savings message, 50% of young workers (compared to 39% of all workers) said one approach that would likely work is: “Stop trying to communicate. Instead, automatically enroll me with a high enough savings rate so I don’t have to think about it.’’  Of course if employers did ramp 401(k) withholding up to that  level, young workers might be shocked at how much it reduced their take home pay and find it hard to save outside their retirement accounts—which takes you right back to the HelloWallet identified problem of workers lacking emergency funds and draining their retirement accounts. Plus,  let’s not forget the student debt many young workers carry or the fact that if the AARP has its way, these kids will be paying through the nose for the baby boomers’ retirement,  too.  Bottom line: To stay on track for retirement, Gen Y is going to have to run a marathon. 

All employees are looking for automatic, no decision, retirement plans. This includes automatically enrolled into an age appropriate portfolio. This makes your 401(k) plan more like a pension plan. This will reduce anxiety and improve results.

Please comment or call to discuss how to improve your company 401(k) plan.

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Bad and Good Advice About the “Fiscal Cliff” - 1996 – 1996 (Photo credit: Wikipedia)

The Wall Street bullies want you to trade in and out of stocks based on financial pornography in the media. They create hype to encourage trading because they make money when money is on the move. A fiduciary adviser would discourage this kind of behavior, which is in your best interest.

If I hear “fiscal cliff” one more time, I will consider jumping off a real cliff. The financial media is in hyperactive overdrive, breathlessly dispensing what passes for investment advice. Here are some typical examples:Over at CNBC, Jim Cramer told his viewers to buy Cisco Systems (CSCO), Home Depot (HD) and PetSmart (PETM). He believes these stocks, among others, would be trading higher if the fiscal cliff was resolved. His logic is simplistic: These stocks are “recession proofers” and “big yielders.”

Yahoo!’s Breakout had Todd Schoenberger, managing principal of The BlackBay Group, as a guest on its Nov. 16 show. Mr. Schoenberger commented on the recent decline of Apple stock. He noted ominously that “[A]pple is a true proxy of the global economy.”

Sam Collins, the “Chief Technical Analyst” at InvestorPlace, believes “fiscal cliff confusion” creates a “buying opportunity” for CVR Partners LP (UAN). He notes the stock may be “… a temporary victim of fiscal cliff negotiations.”

I am sure you get the drift. Unfortunately, many investors will act on this advice, which is unfortunate.

In stark contrast to the musings of these pundits, Allan Roth provides sound advice in his Nov. 12, 2012 CBS MoneyWatch blog. Roth correctly notes that the approaching fiscal cliff is “not exactly a secret” and “thus the possibility is already priced into the market.” There is no reason to believe that stocks are mispriced or that self-styled “experts” could identify them even if they were.

Next, he observes that the market often acts in a way that is contrary to conventional wisdom. He uses the downgrade of U.S. debt in 2011 as an example. You would think lower-rated U.S. Treasury bonds would make it more expensive for the government to raise funds. In fact, bonds “soared” making it “much cheaper” for the government to borrow.

If you are really worried about what it going to happen in the stock market in the next month or two (or even over the next several years), you have no business owning any stocks.

The “fiscal cliff” is being used by the financial media and many brokers and advisers to justify short-term recommendations based on their purported ability to predict the future, time the market and pick stocks to buy or sell. Neither they nor anyone else has this expertise. Relying on their advice is not responsible investing. Don’t let the “fiscal cliff” turn into a financial disaster for you and your family.

Trying to pick stocks or market time is ok if you want to gamble and speculate with your money. However, if you are saving for retirement or any long term goal ignore the financial media and the Wall Street bullies. Your best strategy is to design a prudent portfolio and remain disciplined to that strategy.

Please comment or call to discuss how this affects you and your financial future.

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The 401(k) On Steroids

When the demographics of a business are right the defined benefit hybrid plan is a great option for many small business owners as well as professional service firms. Assets in a qualified retirement plan provide asset protection from creditors and an accelerated saving rate, up to $250,000 deduction. Many small business owners and professionals are guilty of not saving enough for retirement. This option gives them the opportunity to catch up.

English: Retirement savings for various period...
English: Retirement savings for various periods with squirrel and nut analogy (Photo credit: Wikipedia)

Would an extra $2.5 million come in handy at retirement? Would you like to defer taxes on over $200,000 of current income each year? Would you like to see a higher proportion of your retirement plan expense go to yourself, or your key people if you own a business?Whether you are a realtor, consultant, physician, attorney, independent contractor, sole proprietor, owner or a partner in a small or large business, you can turbo-charge your retirement with a cash balance plan on top of your existing 401(k) plan. You can be a one person shop, or highly paid executive or professional in a large firm.

While not for everyone, the cash balance plan or other hybrid plans are a great way to accelerate your retirement savings

Please comment or call to discuss how this might be a great solution for you and you company..

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Is Your 401(k) Up To Par?

Logo of the Internal Revenue Service
Logo of the Internal Revenue Service (Photo credit: Wikipedia)

The quality of 401(k) plans offered needs to improve or plan participants will leave the plan. These plans need to convert to a more pension fund like approach.

Here are some of the other key design features and the percent of plans surveyed with that feature, according to the IRS survey:No age requirement to sign up (20%)

No service requirement (minimum time on the job) needed to make contributions (13%)

Employees can change deferral elections at any time (41%)

Catch-up contributions allowed for employees at age 50 (96%)

Employer matching contributions program in place (68%)

Permit after-tax contributions (4%)

Hardship distributions permitted (76%)

Employee loans permitted (65%)

For a look at the “crucial” role that 401(k) plans will play in the future of Americans’ retirement readiness, check out this speech The Investment Company Institute President/CEO Paul Stevens gave earlier this month at Town Hall Los Angeles.

The 401(k) plan has become the sole source of retirement of most Americans. If plan sponsors do not take their 401(k) plan seriously someone else will.

Please comment or call to discuss how this affects you and your company sponsored retirement plan.

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Families That Cheat Investors Together, Stay Together

Financial author William Bernstein said it best: “…there is a third type of investor – the investment professional, who indeed knows that he or she doesn’t know, but whose livelihood depends upon appearing to know.”

Actually, there is a fourth type of “investment professional.” They definitely know they don’t know. They make a living conning you out of your money by offering you the lure of outsized returns without meaningful risk. Their con is more blatant and despicable than the conduct of your typical retail broker, but both have the same goal: Enriching themselves at your expense.

The debate on the fiduciary standard for all recommending investments will continue because many in the financial industry benefit fro the conflicts of interest. Investors must come first if we are to regain the trust of the American public. There is a successful business model which puts the interest of the investor first.

Please comment or call to discuss.

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Are You Ready for a DOL Audit? 401(k) and Pensions Plans are in the Crosshairs

A recent report of U.S. Department of Labor (DOL) audit results contained some surprising statistics: almost 3 out of 4 audits find violations of the Employee Retirement Income Security Act of 1974 (ERISA) and the average cost for a plan to correct them, including fines and penalties, is $450,000. The DOL’s ERISA audit force will expand to include over 1000 investigators and audit activity will be increasing.

Plan administrators often prepare for IRS audits by doing their own plan compliance audits to identify problems to correct. However, we hear less frequently about clients preparing for a possible DOL audit, even though these audits are becoming more common. DOL audits could be triggered by answers on Form 5500 or employee complaints, or be the result of random selection.

Many plan sponsors have been busy managing their business, with little time for their company retirement plan. As regulations continue to increase and DOL audits increasing now is not the time to ignore this important employee benefit.

Please comment or call to discuss.

The End of Human Resources as We Know It

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The competition for skilled employees will continue to challenge growing companies. Talent will find top organizations.

HR can’t be well managed without thoughtful criteria for assessing talent. The best HR leaders today are doing the math.A New Kind of HR Leader

The rise of the CHRO — Chief HR Officers, participating in the highest levels of decision-making — confirms the seriousness of boards of directors in elevating the role and capabilities of HR leadership. While historically CHROs were added to boards as a way to add diversity, companies in recent years have begun to add top-notch CHROs to broaden their perspective on organizational issues and expertise in talent matters.

The trend has accelerated this year and will continue to do so.

The pressures in this new HR world are enormous. A few of the current crop of HR superstars — Kevin Cox of American Express, Laszlo Bock of Google, Jeff Smith of BlackRock, Tracy Keoch of HP, Matt Schuyler of Hilton Hotels, Ashley Goldsmith of Polycom — are carrying the weight of their organizations on their shoulders.

Leaders like these won’t be caught short when asked for a realistic assessment of their organizations’ critical assets.

The best HR leaders welcome the challenge and in the process are strengthening the role of HR. They understand that talent is the competitive edge and the core of any organization — and that talent development is the most important responsibility of their job.

Organizations will find attracting and retaining top talent their main challenge going forward. This, I believe, is relevant to all organizations looking for skilled employees.

Please comment or call to discuss.

  • Vice President, Human Resources (
  • Senior Vice President, Talent Management Director (
  • Assessing the Real Value of ‘Me’ (
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Worker morale still needs a boost

Image by mhartford via Flickr

Talk is not cheap

Perhaps the most important thing you can do to help morale is “acknowledging the stresses and circumstances that your employees are feeling,” says Arlene Vernon, president of HRx Inc, an Eden Prairie, Minn.-based HR consultancy.

That may sound familiar, because it’s the sort of advice consultants were giving out during the financial crisis. They suggested company owners walk around the office, factory or selling floor and talk to workers. Ask them how things are going. Listen to them vent about the economy. See if they have questions about the company.

These chats may not seem important, but they do go a long way toward helping employees feel better. If workers have to sit on their feelings and just put on a bright face all the time, they’re just bottling up unhappiness and that can be a big morale-buster.

Employees also need to feel that they’re really being listened to, not patronized. That means you need to take in what your workers are saying, and if they are upset about their jobs, see what the problem is and what you can do to help.


Your employees are your most valuable asset.

Please comment or call to discuss.

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Can poor people retire?

selfmade image of U.S. Unemployment rate from ...
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This problem can be solved by proper education. Potential employees must realize that they will not be hired without the proper skills. On the job training is becoming a thing of the past.

the nation is experiencing a skilled worker shortage. Stories in the past week show an interesting trend in hiring – that the real problem with unemployment might not be a lack of jobs [See Businesses post most job openings in 3 years], but that employers won’t hire people who lack the qualifications. Which relates to the fact that lower-skilled adults ages 18 to 34 have had the largest jumps in poverty. [See also: Unemployment crisis: Can’t find jobs or can’t find talent?] So what does all this have to do with retirement plans? It means possibly that the next big wave of retirees will be so broke, they either won’t be able to quit working, or they’ll be living off Social Security‘s dwindling revenue. And that the cash power for Gen Y might be segregated to cohorts who are part of the greatest wealth transfer in history, an estimated $41 trillion by 2052, according to Boston College’s Center on Wealth and Philanthropy.


Is the fundamental employment problem a lack of training or a lack of potential employees desire to learn the necessary skills.

Please comment or call to discuss.

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Press Release

Internal Revenue Service (IRS)
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401K Plan Advisors LLC is Proud to announce that Tony
Krance, MBA, CFP®, AIF®, ERPA has been awarded the designation of Enrolled
Retirement Plan Agent (ERPA) by the Internal Revenue Service.  This enrollment allows Mr. Krance to
represent taxpayers before the Internal Revenue Service concerning the
following qualified retirement plan issues:

  • IRS/DOL audit representation
  • Employee Plan Compliance Resolution Program
  • Employee plan determination letters
  • Form 5500 and 5300 representation

The ERPA designation reflects Tony Krance’s commitment to
providing the expertise to their clients necessary in this increasingly complex
regulatory environment.

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