I saw that on a sign the other day.  I smiled because it made me think of how most people view financial planning.

The whole process of planning, for almost anything, is opaque.  There are help books and guidebooks for almost anything, but when we sit down and think about our current situation, it all seems unclear as to where to start.  There is more “help” available on almost everything today than there was 20 years ago, and yet we seem to be able to do less and less on our own.  My father built the homes he lived in, repaired the cars we drove, and made some of the furniture in our home.  You think I can do any of that?  Nope.

Interestingly, to me, one thing he never did do alone was plan for his (and my mom’s) financial future.  He always used an advisor.  An advisor can help even the best of the self-sufficient get started on their financial planning, and it appears most people are aware of this.

A new survey from Employee Benefits Research Institute (“EBRI”) finds that 70% of all workers would find it helpful to have a workplace educational/financial planning program available to them.  What do workers most want out of such program(s)?  It turns out that 70% of the ones that want a program want help/advice on how to manage competing financial priorities.  Quickly behind this desire is the desire to have help with basic budgeting and day-to-day finances (65%).  45% of them want help specifically around their student loan obligations.

Financial planning can be opaque and it is certainly unclear where to start.  But getting started is the most important thing!  Surveys of retirees always highlight that retirees wish they had started their financial planning earlier in their careers.   And what better place get started than with an advisor at the workplace.
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If you are an employer who would like to learn more about how to get a financial planning benefit for your employees up and running, give me a call!

The word “Retirement” congers many different thoughts and images.  I can tell you that after having spent 25 years working with companies and employees that “retirement” seldom means the same thing to two different people. 

And the definition of retirement just keeps getting more jagged as the Baby Boomers reach their senior years.  Research from AP-NORC Center shows that the idea of retiring on your own terms and putting your feet up for your remaining days is something that fewer and fewer people do.  In fact, if that was ever the reality, it certainly is not prominent today.

A couple of stats from the research to get us started:  over 1/3rd of Americans who consider themselves retired did not retire by choice.  Most common reason people take early retirement?  Health problems or disability.  One out of every 3 people stop working not by choice.  Find that surprising?  I do.  43% of Americans over 50 say that the thought of retirement causes them to be more “anxious” than “excited.”  That’s probably not good. And 56% of Americans say they expect to work past 65 with 27% of those saying they never expect to retire.

Now this last statistic may not be all that bad.  Many people find purpose and enjoyment to work and working past age 65 is a choice that they welcome, not a need they bear.  It’s an option, not a requirement.  And that is worth keeping in mind. Rather than being forced to work beyond what your health can bear or what you need to do to provide for living expenses, isn’t it nice to think that your golden years might afford you the chance to continue to stay involved, find purpose and enjoyment without the financial requirement to do so?

What's the lesson here?  It is critically important to promote savings, budgeting, and planning as early in one’s career as possible so that when those later years approach, they are not met with anxiety, but rather with hope and excitement of what can be.
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If you want to work with an advisor who shares such a vision, please give me a call!

As of 2018, student loan debt is now the second highest consumer debt category – behind only mortgage debt – and higher than both credit cards and auto loans.  According to Make Lemonade, a consumer finance company, more than 44 million borrowers have student loans and the collective debt is greater than $1.5 Trillion.  The average borrower owes $37,172.  And, of course, the largest group of borrowers is under age 30.

If you find these stats a little disconcerting, you should.  How this debt is impacting our society is being felt in many ways.  For those who are shouldering this debt, it means that many of the things they would otherwise be spending money toward must instead be used to pay off their student loans.  When you consider that most of the individuals who have this debt are also just starting out in life and need to begin building a life separate from their parents or college, the financial hill they need to climb can be more than intimidating; it can be debilitating.

What’s this have to do with your retirement plan?   For one thing, we are seeing more and more young people unable to contribute to their company’s 401k plan as they need to use those dollars for debt payment.  At first glance, this might not seem like much of a worry for employers, but when you consider that the delay in participation could last for 5-10 years, the real impact to employees who are now falling behind in retirement savings can be huge.  Moreover, think about the increased stresses these borrowers are feeling as a result of just trying to dig themselves out of this financial hole.

Is there something an employer can do?  There are several things actually.  A financial advisor can work with employees to help them with budgeting and cash flow management.  A good advisor can also work with the employer to help craft a way via the retirement plan whereby the employer can still make some “matching contributions” to the plan for those employees who are paying down debt instead of making 401k deferrals.  In fact, this idea is gaining so much momentum that legislation is even being proposed in Washington to codify how to do this.
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Want to learn more about how to help your employees manage the student loan burden?  Give me a call!  I work a lot in this space.

​We all pay into it.  We are all expecting to receive it.  But do we all understand it? Apparently not.  New research from Nationwide Retirement Institute suggests that many Americans have either false expectations as to what they can expect from Social Security or a false reality of their own retirement.

The research has so much data that I can’t possibly cover it all in this blog, but here are just a couple of the more glaring misconceptions:  70% of pre-retirees (those within 10 years of retirement) believe they will be eligible for full benefits at age 63.  Wrong.  And 26% believe that even if they do claim benefits early, that the benefits will rise once they reach full retirement age.  Wrong.

In fact, there are so many things about Social Security that pre-retirees get wrong, it almost makes you wonder what they get right.   They certainly don’t get the amount right.  The vast majority believe they will receive $1,805 per month in Social Security benefits, when the actual number is closer to $1,408 per month.  That a difference of 28%.  That’s a BIG difference.  Many people, for some reason, forget that Medicare is not actually free and that premiums are withheld, on a monthly basis, from the Social Security benefit.  And it can be a meaningful amount.

Is there some hope?  Of course.  It appears from the research that only 22% of pre-retirees have a formal written retirement plan, but that if you work with an advisor the likelihood of increasing your Social Security benefits goes up.  In fact, 76% of those surveyed say that if their advisor did not, or does not, speak to them about maximizing Social Security benefits, they will switch advisors.
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So what should you do?  Make sure you have a good advisor who works with you to put a solid plan together for your retirement.  Are you looking for such an advisor?  Give me a call!

I just picked up a new client and the reason might be a bit surprising. The client was quite happy with their 401k Recordkeeper and made it clear from the outset that they were making no changes with them.  Rather, they did not feel that their advisor was moving the needle with employees and it was time for a replacement.  They decided to interview prospective advisors, including me, but were not sure what they wanted other than “better engagement with employees.”

After 25 years of working with corporate retirement plans, I did not find this prospect/client to be much different than most.  They felt like something was lacking with their existing advisor but couldn’t clearly see what needed to be done to improve things.  It’s not their fault.  Their job is to run their business not understand everything there is to understand about their 401k plan.

When meeting with a prospect like this, I find it always helpful to inquire as to their wish list and when they invariably struggle (again, not their fault) that is the point where I am able to offer some possible suggestions.  What I generally recommend as one of the first items on the list is that it be shown how the plan will be improved through objective data by hiring me.  Data should drive our analysis around improvements and serve to justify initiatives, but outside of actual investment performance returns, most companies struggle with defining how the plan is objectively improved.

The first step in showing improvement is to get an analysis of where we are today.  For this client, the reason they awarded me the business was my ability to actually baseline today the state of the employees’ financial security and roll that up to an overall corporate score.  From here, we will target individuals and groups for financial training and measure the results of actions taken.  Over time, we will benchmark the plan again and be able to measure improvements.
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This doesn’t sound all the complicated, right?  Nevertheless, you might be surprised how few people understand how and why benchmarking current state is so important.  To learn how I can help you and your employees, please give me a call! 

Are you like most Americans who dream of a comfortable retirement that will start sometime in your mid-60s?  For most Americans, they can’t even imagine another scenario.  However, new data suggests that the dream is becoming less a reality and more of a pipe dream.
 
According to a new report by United Income, the percentage of Americans who are over 65 and still working is at the highest level in 57 years!  Over 20% of all Americans who are at or above retirement age, i.e. 65 or older, are still working.  In 1985 it was 10%.  Additionally, according to some research from the New School for Social Research, the median savings for a “middle class employee”, someone earning more than $40,000 but less than $115,000, is $60,000.  $60,000!  It’s no wonder that more and more employees are continuing to work beyond age 65...they have little other choice!
 
If you are an employer who finds this information interesting, but unconcerning, I would encourage you to think more broadly.  These numbers are national numbers, but are they so much different for your employees?  If you have employees who are working after 65 wouldn’t you rather they be doing so because they want to instead of have to work? 
 
The answer to this problem lies in getting involved with your employees early to promote a culture of savings and financial wellness.  Helping employees understand how to budget, save, and invest for an adequate nest egg is critical to not only a healthy retirement for the employee, but also for the health of the employer.
 
Give a shout to learn more about how we can help your firm.