Welcome to another installment of What Robin’s Reading — our regular feature that gives you an inside look at what the Robin S. Weingast & Associates team is focusing on to stay up-to-date with benefits and retirement planning news.
This month, we continue to monitor the impact of the Department of Labor’s Fiduciary Rule, but with graduation season upon us, we’re also reading up on the investment and benefit trends among the new crop of job seekers. A recent video by Tony Robbins caught our eye — it contains his opinion on a “must invest” for young professionals. Click here to hear what he has to say.
We also read “Millennials & Financial Literacy—The Struggle with Personal Finance,” a fascinating report on the personal finances of millennials. Based on research conducted by The Global Financial Literacy Excellence Center (GFLEC) at the George Washington University, the report uncovered eight key trends. When it comes to personal finance, millennials:
1. Have inadequate financial knowledge
When tested on financial concepts, only 24% demonstrated basic financial knowledge.
2. Aren’t happy with their current financial situation
When ranking satisfaction on a scale of 1-10, 34% were very unsatisfied.
3. Worry about student loans
When asked about their ability to repay their student loan debt, more than 54% of Millennials expressed concern.
4. Have debt across economic and educational lines
Among college-educated Millennials, a staggering 81% have at least one longterm debt.
5. Are financially fragile
Nearly 30% of Millennials are overdrawing on their checking accounts.
6. Are heavy users of Alternative Financial Services (AFS)
In the past five years, 42% of Millennials used an AFS product, such as payday loans, pawnshops, auto title loans, tax refund advances, and rent-to-own products.
7. Sacrifice retirement accounts
More than 20% of Millennials with retirement accounts took loans or hardship withdrawals in the past year.
8. Don’t seek professional financial help
Even with inadequate knowledge, only 27% of Millennials are seeking professional financial advice on saving and investment.
But the picture isn’t totally bleak for millennials. Another piece from CNBC outlines distinct advantages that the generation has when saving for retirement.
Whether you know a young professional who would benefit from advisement, or you want to make sure your own personal finances are in order, the Robin S. Weingast team is here for you. Contact us today for an appointment. Our team of experts is ready to make sure you and your loved ones are on track to meet your financial goals.
The Department of Labor’s announcement has raised many questions for people who will be affected by the new Fiduciary Rule. To help keep you informed and up-to-date, we’re providing a fact sheet from the DOL as our Resource of the Month. We hope you’ll find this helpful and a great place to get answers to any of your questions.
Click here to download the resource, and be sure to contact us with any questions.
You may have have seen the recent news about the Department of Labor’s Fiduciary rule. The Robin S. Weingast & Associates team has been closely involved in understanding this rule and we are keeping a close eye on what these changes mean for our clients. For over 30 years, we have made our clients’ benefits and retirement plans our priority, and we look forward to continuing that tradition. The rule goes into effect in April 2017, with full implementation due by January 2018. This will give us all time to work to make sure you understand the rule and feel comfortable about your retirement savings path.
As a fiduciary, I am already held to the highest standards when it comes to keeping fees to a minimum and ensuring that your retirement plan works for you. You can expect the same level of service and attention to your finances as the DOL’s new rule is implemented.
If you have any questions, concerns, or want to know more about this new rule, I invite you to contact me today.
I look forward to hearing from you and to our continued success.
Robin S. Weingast
President & Owner, Robin S. Weingast & Associates
Since March is Women’s History Month, we’re bringing you a special Need To Know post on women and retirement. The gender pay gap in the US and globally is well-documented and a frequent topic of conversation and advocacy. While there is work to be done to achieve compensation equality, women can —and should — take some key steps to ensure financial stable retirements for themselves.
The most important thing for women to do when it comes to retirement is to get informed. The Robin S. Weingast team believes when it comes to retirement planning, knowledge is more than just power — it’s peace of mind. The Women’s Institute for a Secure Retirement (WISER) has a helpful checklist that outlines what women need to know, what women should ask their employers, and what women should discuss with their spouses. Click here to look at their checklist.
Something important to note is that while retirement benefits are offered to more and more full-time employees, women are more likely than men to be working part-time, and so there may be fewer benefits available. The TransAmerican Center for Retirement Studies advises women to consider retirement benefits as part of overall compensation and to advocate for benefits if none are provided.
Once you’re informed about your benefits, it’s time to think big picture and come up with a long-term strategy. A 2015 survey by the TransAmerica Center for Retirement Studies found that almost 60% of all female respondents felt that they were “guessing” when they estimated their retirement needs. That same study found that women estimated their retirement financial needs to be much lower than men’s — even though women live longer than men. Guessing and incorrect estimations can have drastic consequences when it comes to retirement planning. This can mean the difference between being free to enjoy retirement or having to work longer than expected.
Women should make it a point to sit down and articulate their financial goals — including a realistic picture of how much money is needed for retirement — and then determine a savings plan to help achieve those goals. The plan should include your knowledge of your benefits, and should also take into consideration that women are more likely to take time away from the workforce to act as caregivers to children or elder relatives. This will have an impact on your retirement savings and may necessitate some catch-up retirement planning. Revisit our post on making up for lost time with retirement planning to see how you can offset any delays in planning.
Something else women should consider doing when it comes to retirement? Asking for help from a professional. Only 36% of all women polled in the TransAmerica study used a financial advisor, and of that 36%, 77% talked retirement planning with their advisors. A financial advisor is well-versed in the many avenues available when it comes to retirement planning and can help get you up-to-speed on how to maximize your benefits and other savings opportunities available to you.
If you’re ready to have a discussion about your retirement, it’s time to contact the Robin S. Weingast & Associates team. We’ve worked with clients for over 30 years to craft customized retirement and financial plans that will help you do more than just save money, they’ll help give you peace of mind. Contact us today to learn how we can help.
In keeping with our focus on financial planning for couples, our latest Resource of the Month is designed to help make planning with your partner a bit easier. As we mentioned in our latest installment of “What Robin’s Reading” (link to post above), couples argue about money, partially because of key misconceptions about their own approach vs. the approach of their partner. Before you can have a conversation as a couple, it’s important to have a solid understanding of your individual personal financial picture. That’s why our February Resource of the Month is a “Personal Net Worth” worksheet that will give you a snapshot of your financial health. You can even pass a copy to your partner, and encourage them to fill it out as well.
Our hope is that knowing your own financial situation will help make conversations with your partner easier for both of you. Once you know where you stand, you can create shared goals for your financial future.
Need help understanding how your personal net worth should shape your financial goals? The Robin S. Weingast & Associates team is here for you. Contact us today to find out more about how we can help.
February may be the shortest month of the year, but there’s still plenty going on to keep everyone busy. In keeping with Valentine’s Day, this month we’re reading up on how couples can successfully (and peacefully) manage their finances.
Anyone who’s ever been in a relationship knows that both merging and co-managing finances can be a source of stress and tension. We’ve been reading a recent study by Money magazine that revealed that 70% of couples fight about money above any other topic in their relationship. The study points to a key reason for this arguing: four out of five of us say we’re on the same page as our partner about finances, but when you dig a little deeper, the gaps and differences begin to show up. An overwhelming majority of respondents said they were much better than their partners at managing every aspect of finances – from paying the bills to handling retirement planning. In addition, most respondents would describe themselves as “savers” and their partners as “spenders.” These misconceptions make conversations spiral into arguments, which makes future financial talks even less appealing and less smooth.
Is there any hope to bridge these gaps? For starters, it’s helpful to know how to approach financial conversations. We found this video and article a helpful place to start. Most experts recommend making a commitment to consistently bring up the topic of finances, in a way that’s free of judgement and criticism. In some ways, the conversation has to be approached the way you would handle a professional meeting in your workplace — focused on the shared goals and end results, without getting overly personal. It sounds like easy advice, but we all know that when money comes into the conversation, keeping the tone business-like is easier said than done. In some cases a professional adviser may be a good idea. Having a third-party there – especially one who knows what your shared goals are — can help keep the conversation focused and can stop a couple from veering into personal attacks that are counterproductive to achieving financial harmony.
Our team has also been visiting this comprehensive “Love and Money” online portal, which offers couples-themed advice on topics including talking finances and understanding how income gaps affect your relationship.
If you’re looking for some outside help to bring some financial harmony to your life, The Robin S. Weingast & Associates team is ready! We’ve been working to keep couples on track with their financial goals for over 30 years and would be happy to sit down with you and your partner. Make an investment in your relationship and contact us today.
January is a time for goal setting and resolutions, and in that spirit, our Resource of the Month offers ten financial resolutions that will help keep your savings on track in 2016. From tips on planning to what documents you should review, these are ten tips you don’t want to miss!
Click here to download Ten Financial Resolutions for 2016
The new year often means a career change for many people. But what does a new job mean for your retirement plan? Here’s what you need to know about changing jobs and your employer-sponsored retirement plan.
Typically you have four options – you can leave your money in its account, transfer it to an IRA, move it to your new employer’s plan, or cash out. Each option has implications for your finances, so here are some more details on each one:
Transfer into an IRA
This is an easy option that provides a few key advantages, most notably:
• You avoid taxes and penalties, which means your savings doesn’t take a hit
• You preserve your tax benefits
• Your savings become easier to manage – you’ll have fewer statements, and when it comes time to take your Required Minimum Distributions, you will have a centralized source.
• If you elect to transfer into a Roth IRA, you will avoid RMDs – you can withdraw at your own pace, which is particularly appealing if you anticipate having multiple sources for your retirement income.
• Your investment assortment may grow, since IRAs tend to offer more investment options than a traditional 401 (k).
However, be mindful that if you have company stock in your 401 (k) that has increased in value, then you should explore other options aside from an IRA, since company stocks moved to IRAs are taxed as income when withdrawn.
Keep your savings in your old 401 (k) plan
Many companies will allow you to keep money in your old 401 (k), even after you’ve left. This is certainly an easy option, and it has several key benefits:
• You retain the plan’s investments, fees, and features, plus you buy yourself some time to decide what you’d like to do with your money (all while earning more money)
• You avoid immediate taxation and penalties, and you preserve your tax benefits
• You have the option to transfer your savings at any time – typically once you leave a company, you are free to take distributions whenever you’d like, so you can move your money into a new account at any time.
• If you leave your job in or after the year you turn 55 (50 for public employees such as police and firefighters), you can take penalty-free withdrawals from the account.
You should keep in mind that if you have less than $5,000 in the account, you may not have this option and the plan may automatically roll the money into an IRA. If you have less than $1,000 in the account, you may simply receive a check.
Move your savings to your new employer’s 401 (k) plan
You are not required to move your savings into your new employer’s 401 (k) plan, but it may be the simplest, most streamlined solution for your money. You also benefit from a few key things
• You avoid immediate taxation and penalties
• You preserve your tax benefits
• You may be able to postpone the RMD past age 70 if you are still working
Be sure to fully understand your new plan’s rules, distribution parameters, and fees before you move your savings into a new 401 (k).
Cash out your savings
This seems, on the surface, like an attractive and easy way to access your funds. However, you should know a few things before cashing out your old 401 (k) plan
• The amount you withdraw will also be added to your taxable income, meaning you could lose as much as 49.6% to federal taxes
• You will have less money leftover to reinvest back into a retirement savings option, which will affect your long-term planning
In some cases, you may decide the penalties are worth it – but you should make sure you understand what they are before deciding on the cash out option.
If you have questions about how a job change will affect your retirement plan, then we’re here to help. Contact the Robin S. Weingast & Associates team for more information about how to make the decision that’s best for you.
As 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!