Resource of the Month: 2016 Plan Limit Changes


IRS_ImageAs they do every year, the IRS released their plan limit changes for the 2016 tax year. For our final 2015 Resource of the Month, we’ve compiled all the changes into a handy document that you can reference!

Download our Resource of the Month: 2016 Plan Limit Changes.

Questions about 2016 Plan Limits and what they mean for you? Contact our team today!

What Robin’s Reading: December 2015

Robin Weingast Reading RecsWelcome to a new installment of “What Robin’s Reading,” our bimonthly feature that highlights what the Robin Weingast team is reading to stay current and up-to-date on the issues that will most impact our clients and their benefits planning.

This month, we’re reading the 2015 Employee Benefits Security Survey, released each year by Mass Mutual. The goal of the survey, which drew responses from over 1,500 full-time employees at companies that provide benefits is “to explore the disconnect between the value employees place on their employer-provided benefits and other aspects of their lives, to understand employees’ perceptions of their benefits, and to determine the level of interest in employee benefits and personal finance guidance tools.”

Here are some takeaways from the survey that caught our attention:

• Personal finance and health are the areas that are most important to the respondents — being able to retire comfortably is important, but not nearly as important as those two areas.

• Respondents know more about their personal finances and employee benefits than anything else, including current events, sports, and office gossip.

• While respondents feel like the understand basic personal finances, like credit card balances and savings accounts, they do not feel they know as much about what it takes to retire comfortably, and how to prioritize their benefits

• Respondents who want to know more about their finances feel that the obstacles they encounter include not having enough time and not having a person they trust to talk to about finances.

• 40% of the respondents stated that they are very distracted at work due to their concerns about their own finances, most notably millennials. (We read this great follow-up piece in Forbes on why that’s so important.)

• A total of 87% of the respondents were at least somewhat satisfied with their employee benefits plan. Not surprisingly, those who knew more about their plans were more satisfied with them and less distracted by their finances.

For a full copy of the report, click here

For us, this study reinforced a few key things. The first, is that it’s difficult for people to understand what they need to do to retire comfortably. We touched upon this in previous posts about 401 (k) plans and retirement myths. 

The second big takeaway for us, is that it’s not enough to have a good benefits plan; you have to have a well-educated team of employees who understand the plan and know how it can help ease their anxiety and keep them focused at work. That’s good for your team, and good for your business.

It’s vital that you have a plan administrator who won’t apply a “cookie cutter” solution to your benefits plan and who will take time to provide your employees with information and resources to help them plan for their futures. If you’d like help making sure your employees have a benefits plan that they understand, appreciate, and that works for your bottom line, contact us today.

What Robin’s Reading: October 2015

Robin Weingast Reading RecsWelcome to a new installment of “What Robin’s Reading,” our bimonthly feature that highlights what the Robin Weingast team is reading to stay current and up-to-date on the issues that will most impact our clients and their benefits planning.

We’re focusing on life insurance this month (be sure to read our recent Need to Know post on Whole Life Insurance), and paying special attention to a group of people who are most likely not thinking about life insurance at all: millennials. Millennials have taken the workplace by storm, but they are also proving to be very different from their baby boomer and Gen X counterparts when it comes to long-term planning.

We were particularly interested in this article that cites “a study from Life Happens, a consumer group formed by insurance providers, and LIMRA, the life insurance trade association, found that 29 percent of millennials cited saving for a vacation as a priority over purchasing life insurance or increasing their coverage. And 60 percent of millennials said it was more important to pay for expenses like Internet access, cable, and cellphones than purchase some or more life insurance.”

The article goes on to explain ways to make sure that millennials are prepared – even if they don’t think life insurance is something they should worry about right now. Rather than scaring them with tales of doom-and-gloom, focus on the benefits – particularly the financial benefits.

If you, like many business owners, manage an intergenerational work place, it’s important to understand the millennial mindset. If you need help making sure your benefit plans are tailored to your staff’s needs and financial goals, contact the Robin S. Weingast & Associates team today.

Need to Know: Whole Life Insurance

Robin Weingast life insurance benefits planningLife insurance has been around for thousands of years. It is believed that the Romans originated the product to fund burials of military personnel who were members of a burial club.

Over time, the reasons for owning life insurance grew more complex, such as to meet estate planning or business planning needs, in addition to personal protection. Product innovations and designs also occurred to meet varying factors, including economic concerns, investment market cycles, medical advances and increases in longevity.

Throughout that time, one proposition has remained constant: None of us know when we’re going to die. Whole life insurance is uniquely positioned to meet that proposition and, thus, has seen a resurgence in popularity because unlike term insurance, it is a permanent life insurance product. And unlike variations of universal life products, it is not subject to interest rate and market fluctuations provided the required premiums are paid.

Once thought of as an expensive form of death protection, whole life insurance lends itself well to various scenarios. Among them:

Scenario 1: Clients who want a higher return with lower risk.

Given current low interests, which are yielding minuscule returns on bank and fixed income financial products, whole life insurance’s cash value growth is now seen as a higher-yielding financial product with similar risk profiles. Yes, it is still life insurance, but the cash value element is often thought of as a bond or CD alternative.

Insurance carriers guarantee an interest rate in cash values. Mutual companies also often provide an annual dividend which is not guaranteed, (although most has paid a dividend every year). The dividend further increases cash values, all of which grows tax-deferred and can potentially be accessed income tax-free through withdrawals to basis and loans thereafter.

Scenario 2: Clients who want a healthy investment portfolio.

Whole life insurance is a non-correlated asset class in a healthy, diversified investment portfolio. For entrepreneurs and more aggressive investors, whole life insurance serves as a counter-balancing force against concentrated positions and aggressive investments.

Scenario 3: Clients who need permanent protection.

The average mortality rate has increased dramatically in recent times due to advances in medical technology, greater access to healthcare, and greater awareness of wellness. As a result, families often realize that there is no standard or finite period to maintain life insurance, such that when the period is over, the “need” or desire somehow goes away.

Other products and designs may not be able to guarantee death benefit coverage through advanced ages without:

• increasing premiums on existing coverage;

• adding to underwriting to get new coverage; and

• reducing coverage on existing policies to maintain the policy and/or premium.

The above shortcomings have led to a renewed awareness of whole life insurance. By design, the death benefit is guaranteed if the premium is paid, thus ensuring the policy will be there when protection is needed. Premiums have been amortized over the expected life of the product so as not to place sticker shock on those who are no longer actively employed but still want and need coverage.

Scenario 4: Clients who have business planning needs.

In business planning situations, advisors and clients have traditionally turned to term insurance to fund buy-sell agreements. Increasingly, however, business owners have discovered that the likelihood of dying while in the business is remote.

It is more likely that the business owner will become sick, injured or leave the business due to retirement or some other life event. As a result, the cash value buildup in a whole life policy is an attractive vehicle to create a sinking fund that will act as a down payment on an installment sale or to supplement a lifetime buyout, while the death benefit ensures funding in the unlikely event of death.

If death does not occur, then the policy can be re-purposed for personal planning use of the departing owner. A well-drafted business continuation plan can address this situation.

Scenario 5: Clients looking for a favorable cost structure.

Overall, costs of a whole life policy are too often misunderstood. As measured by premium outlay, there is no argument that whole life presents the highest premium. However, over a lifetime, whole life insurance generally provides both the highest IRR of premium to death benefit (measured at life expectancy) and also the best cost structure as measured by net present value of premiums relative to cash values.

Scenario 6: Clients who need a “forced” savings vehicle.

As increases in college tuition continue to outpace inflation, and as more individuals and families are realizing they won’t be saving enough in traditional retirement accounts to meet retirement expenses, whole life insurance and its cash value buildup are excellent supplemental sources to accumulate wealth while also protecting the family. The premium payments are often seen as a “forced” savings vehicle.

Thus, there are many reasons why whole life products have enjoyed a resurgence in popularity. For those advisors who don’t typically work with whole life, perhaps a fresh look is warranted. To take a fresh look, contact the Robin S. Weingast & Associates team today. We’re here to help!

Resource of the Month: “Educating Employees About Your 401 (k) Plan”

Robin Weingast 401kWith market volatility, there’s a good chance that your employees are also experiencing anxiety about  their retirement plans. Now is the perfect time to make sure your team understands everything they need to know about their 401 (k) plans and to make sure they are contributing enough to meet their long-term goals. 

Not sure how to explain things to them? Our Resource of the Month can help. It will provide you with tips and tools on how to structure information sessions, what information you should include, and how a small investment in time may motivate your team to invest more in their 401 (k) plans.

Download “Educating Employees About Your 401 (k) Plan”

Need assistance making this happen at your company? The Robin Weingast & Associates team is here and ready to help. Contact us today to discuss setting up an employee information session. 

 

Need to Know: Three Tips to Keep Calm During Market Volatility

Robin Weingast Market FluctuationThe end of the summer certainly wasn’t dull, as overseas market fluctuations impacted US markets and had people panicking. Beyond worrying about short-term investments, you may be one of the many people who is wondering if you need to dramatically overhaul your retirement plans. We understand, and we’re here to help. Here are three things to keep in mind during market volatility:

1) Stay Calm

This may seem counterintuitive, and maybe even impossible, but resist the temptation to panic and start moving your retirement money around during volatile times. In fact, sometimes the smartest move is to sit back, watch, and see what develops.

Remember that changes in the market don’t impact regulations and rules about retirement plan distributions and remember that changing the age at which you begin withdrawing your retirement savings will have long-term consequences. A moment of panic might not just impact your short-term future, it might impact your long-term goals. Staying calm will help you asses what steps you need to take based upon what’s actually happening.

2) Avoid change for the sake of change but don’t be afraid to change if you need to.

We know, this is really two tips, but they go hand-in-hand. A common next step after panic is to take action — and it’s usually sudden and non-strategic. Another temptation is to “stay the course” and not act at all, because you fear more change. Don’t be tempted to make a change in your retirement plans just because the market is changing or because you’re worried about what volatility means for your future. In the same vein, if the reality is that fluctuations really are impacting your long-term goals, you need to be prepared to take the necessary steps to correct your course.

The first step is to assess where you are relative to your goals. This piece offers a really simple way to assess if you actually need to change or if you will be ok to proceed as you have been. The answer will be different based upon your age, your goals, and what you have done to save for retirement so far. We also like this piece because it makes recommendations about what to do if you’ve not even begun retirement planning. 

Whatever situation you find yourself in, there will be steps you can take if you need to — and reassurances that not doing anything may be exactly in line with your long-term goals.

3) Use your Resources

Let’s face it — you’re busy running your business and don’t have time to suddenly become a financial or retirement planning expert. And that’s ok. You have a team of people who are here to help you navigate uncertainty and volatility, and Robin S. Weingast & Associates is part of that equation. We know it can be overwhelming to figure out how to balance your business goals with your retirement planning, and that market fluctuations only add to the challenge. Our number one goal is to make sure that you have retirement peace of mind, and we’re here to do whatever we can to help you achieve that. 

If recent events have you concerned, now is the time to contact us. We’re here to make sure you feel confident and satisfied with your plans for the future. Contact us today to see how we can help.

Resource of the Month: College Savings

Robin_Weingast_Saving_For_CollegeBelieve it or not, it’s back-to-school time, which is the perfect opportunity to think about your child’s long-term educational needs. As we explored in a recent post, money anxiety is becoming more prevalent and people are saving less for long-term needs. Rising college costs are a reality and a plan can help make sure you’re prepared and worry-free.

Our August Resource of the Month covers ways to save for college. It discusses traditional methods as well as tax-advantaged strategies and explores how each way impacts eligibility for financial aid.

Download it today and take a step towards preparing for your child’s future.

As always, the Robin Weingast & Associates team is here for you. Contact us today to see how we can help with your planning needs.

 

What Robin’s Reading: August 2015

Robin Weingast Reading RecsWelcome to a new installment of “What Robin’s Reading,” our bimonthly feature that highlights what the Robin Weingast team is reading to stay current and up-to-date on the issues that will most impact our clients and their benefits planning.

The entire Robin Weingast team believes that a key part of our responsibility is to understand what our clients value, what’s on their minds, and what they need to have peace of mind about their benefits and retirement planning. That’s why this month, some recently released studies have captured our attention.

The first is a study from the American Psychological Association that found that money is the leading cause of stress for Americans. This is probably not a surprise to most of us, since as the study indicates, most of us are stressed out about finances! What was surprising to us is that money anxiety crosses all socioeconomic lines. In fact, a recent survey of individuals “with a net worth of $1 million or more by UBS found that while millionaires derive significant satisfaction from the wealth they amassed, they also feel “ever-present fear of losing it all.” This fear and money anxiety take a toll on personal happiness and relationships, and sometimes trick us into making the wrong decisions about planning for our future.

Another recently released study indicates that Americans are saving more,  “but the percentage of household savings that went into employer-sponsored retirements plans like 401(k)s fell 7 percentage points to 22 percent in 2014, and households participating in employer-sponsored plans declined to 56 percent last year from 60 percent in 2013.” What’s the reason for the decline? A focus on short-term, unexpected cash needs rather than long-term planning. In fact, there was an 8% increase in households reporting that their savings were being put aside specifically to deal with immediate emergencies that may arise.

We’ve spent time on our Need to Know blog discussing the dangers of not being prepared for retirement (Link 4), and our 30+ years of experience have shown us that a well-structured, attractive retirement plan is a win for everyone — you’ll attract the best staff and they’ll be more prepared for retirement. We also know that knowledge and support are the keys to alleviating anxiety, preparing properly, and achieving peace of mind.

This month’s readings have shown us that now, more than ever, the Robin S. Weingast team’s ability to provide Retirement Peace of Mind is vital. Don’t let anxiety about your future affect your present. Our team is here to help you take a deep breath, plan, and free you up to enjoy the results of your hard work. Whether you want to ensure that you’re on track to meet your future goals, or you want to make sure your retirement plan is structured to ensure that you and your staff are properly prepared for retirement, we can help. Contact us today to learn more.

Need to Know: Obergefell v. Hodges Decision on Same Sex Marriage Will Impact Planning

Robin Weingast Obergefell v. Hodges    This month, the Supreme Court issued its ruling on Obergefell v. Hodges, a case that was poised to determine the future of marriage equality in the United States. With their 5-4 ruling, the Court struck down state-level bans on same-sex marriages and mandated that all states must recognize a same-sex marriage, regardless of where it occurred. This means that all married same-sex couples are now entitled to full benefits under the law – in all 50 states (and US territories).

As marriage equality advocates rejoice nationwide, the Robin S. Weingast & Associates team is here to help you understand what this ruling means for planning:

Healthcare: Someone in a same-sex marriage can no longer be excluded from their spouse’s healthcare, long-term care, or guardianship decisions.

– TaxesSame-sex couples will now enjoy federal and state-level tax benefits. They can file jointly on the state level – which was not possible previously in states where same-sex marriage was either banned or not recognized – and are eligible to take full advantage of all tax breaks.

– Survivorship: This issue was at the core of Obergefell v. Hodges. Although federal-level benefits have been available to same-sex surviving spouses since 2013, with this ruling, a surviving same-sex spouse will be legally recognized and entitled to all benefits, including those on the state level. This is particularly important when considering governmental benefits, custody of children, and any other financial benefits.

Intestacy: If a spouse dies without a legally recognized will (known as “intestacy”), the surviving same-sex spouse will have automatic spousal inheritance rights.

Understanding the new benefits available to same-sex couples is just the first step. As always, the Robin S. Weingast & Associates team recommends that all couples plan proactively and prepare themselves for all situations that may arise. Our team is here to work with you and make sure your wishes are followed out at all stages of your life. Contact us today to find out how we can help.