Archive for December, 2016

Accupod Episode 6: IOUSA Documentary Review – Accuplan’s Podcast

Friday, December 16th, 2016

Final Podcast image

This week on our biweekly podcast, Nick and Tanya are discussing the 2007 documentary IOUSA. It addresses the growing national debt, and the consequences that the United States and its citizens will have to face. The documentary goes over 4 key deficits the US is facing: budget, savings, trade, and leadership. Are those deficits discussed still and issue in 2016? Join us as we talk about our nation’s future, and where we think we went wrong, and where we’re now going.

Make sure to subscribe on iTunes and SoundCloud so you’re not missing out.

Listen below through SoundCloud!

Where Does Andy Puzder as DOL Pick Put Your Retirement?

Wednesday, December 14th, 2016

dol pick

Just this week, President-elect Donald Trump made the announcement that fast-food executive, Andy Puzder, was going to be his pick for secretary of labor. As labor secretary, Mr. Puzder would oversee the federal apparatus that investigates violations of minimum wage, overtime and worker safety laws and regulations, all of which have an impact on retirement. The DOL also has recently made news regarding the passing of The Fiduciary Rule back in spring 2016, which put regulations on wealth managers to make sure that they make the best financial decisions for their clients retirement accounts (the American public), and not their own interests.

So what are Andy Puzder’s views on both minimum wage and the fiduciary retirement rule?

Minimum wage

On policy questions, he has argued that the Obama administration’s recent rule expanding eligibility for overtime pay diminishes opportunities for workers, and that significant minimum wage increases would hurt small businesses and lead to job losses.

He has criticized paid sick leave policies of the sort recently enacted for federal contractors, and strongly supports repealing the Affordable Care Act, which he says has created a “government-mandated restaurant recession” because rising premiums have left people with less money to spend dining out.

Speaking to Business Insider this year, Mr. Puzder said that increased automation could be a welcome development because machines were “always polite, they always upsell, they never take a vacation, they never show up late, there’s never a slip-and-fall or an age, sex or race discrimination case.”

Puzder has also expressed disinterest in raising the minimum wage, he believes efforts to raise the floor to $15 an hour is destructive. “Most low-skilled jobs aren’t worth that much money,” he’s argued, “and it could spur companies to reduce staff, especially in industries with low profit margins such as restaurants.”

“Instead of creating a living wage, the fight for dramatic minimum-wage increases could leave millions with no wage at all,” Puzder wrote in a column in The Wall Street Journal in 2015.
In his own industry, Puzder said a higher minimum wage is helping to push fast-food restaurants to more quickly adopt touch-screens and other technology to replace staff.

Fiduciary rule

To be clear, although Puzder’s views on the fiduciary rule are not on record, he has generally advocated for the withdrawal of the regulations issued by the Obama DOL secretary, Tom Perez, so it is likely that the rule is on his “hit list”.

The Department of Labor’s definition of a fiduciary demands that advisors act in the best interests of their clients, and to put their clients’ interests above their own. It leaves no room for advisors to conceal any potential conflict of interest, and states that all fees and commissions must be clearly disclosed in dollar form to clients. The rule — six years in the making — is scheduled to take effect on April 10th 2017.

Eyes will be on retirement advisors now, especially those who promised they would do away with commissions on retirement business, and trumpeted the move as a demonstration of their commitment to clients’ best interests. If these advisors decide to reverse course now that there’s a new sheriff in town, clients may have uncomfortable questions about what exactly is in their best interests and whether their advisor is indeed serving them.

Not your Average 401K: Self-Directed 401K Q&A

Tuesday, December 6th, 2016

SD401K - normPut simply, a 401K plan is a retirement plan that meets the standards set by the Internal Revenue Code for tax-favored status. If offered by their company, an employee can contribute a percentage of their wages either Traditional before tax plan or a Roth after tax plan, depending on the options offered by their employer. In some plans, the employer also makes contributions known as matching contributions, and the match is generally based on contribution percentages that the employee has made themselves.

Now, a self-directed 401K plan operates on similarly to a Traditional or Roth 401K plan that was mentioned above, but the difference is that you, as the owner of the 401K can choose to direct where your 401K funds are invested. You’re no longer restricted to the list that’s set by the plan provider, like mutual funds and stock options, you can now invest your money outside of traditional investments, and diversify your portfolio.

Q: What can I invest in with a self-directed 401K?

Since your 401K is now self-directed, you’re able to invest in an array of assets. Most common investments are:

  • Real estate (residential, commercial, farmland)
  • Trust deeds
  • Precious metals
  • Private notes and loans
  • Small businesses
  • And much more!

Q: I haven’t heard of a self-directed 401K before, why is that?

Whether a custodian, broker, or your company holds your 401K, you may not have heard of the self-directed option because they may not offer it. There are a lot of hoops that brokers, custodians and employers have to jump through to be IRS compliant, and a lot of companies decide that it’s just not worth their time, since they won’t make much money off of them.

Q: Do I really get total control of my 401K?

Yes, with Accuplan, your self-directed 401K is truly self-directed. No strings attached.

Q: Can I roll my current 401K into a self-directed one?

That all kind of depends. If you have the 401K through a custodian or broker, then yes, but if your 401K is held by your company, then most likely not, since that company owns the 401K. Consult the provider for a thorough answer.

Q: What are the downsides?

A self-directed 401K takes a lot of know-how and patience. You’re not managing your money, so you have to be prepared to invest, and shoulder the responsibility of making decisions for your financial well-being. It’s definitely not for everyone, but at Accuplan Benefits Services, we are here to guide you, and help you reach your potential.

Will Social Security Checks Grow or Shrink in 2017?

Friday, December 2nd, 2016

social security check

If you’re already receiving Social Security and are curious how you compare with other recipients, or you’re fast approaching retirement and you want to get a better feel for how much money you can expect from the program, you’re probably curious how much the average American collects in Social Security income. The short answer is that the average retired worker will receive $1,360 per month in 2017. The long answer is that the amount that Americans receive in Social Security will vary widely next year.

How is Social Security calculated?

Social Security is designed to replace roughly 40% of a worker’s pre-retirement income. However, the calculation used by Social Security is complex, and a person’s actual benefit depends a great deal on his or her work history.
Social Security calculates your monthly benefit by adjusting your highest 35 years of monthly income into current dollars and then averaging those amounts to come up with your average indexed monthly earnings.

What people really get in Social Security Income

In 2015, 2.8 million Americans were awarded Social Security benefits, and the amounts payable to them ranged widely. Over 217,000 Social Security recipients were awarded less than $500 per month, and more than 433,000 were awarded north of $2,100 per month.
Across the entire universe of Social Security recipients, the amount pocketed also varies widely. Ignoring the two extremes of high- and low-income recipients, you see that most Americans are getting somewhere between $750 per month and $1,800 per month this year.

Maximizing your benefit

If you’re approaching retirement, you’ve already worked 35 years, and your income is higher now than it was in the past, your best bet to a higher Social Security payment may be to continue working. Social Security uses only your 35 highest-income years, so every additional year worked at a higher income today will remove a lower-income year from Social Security’s calculation.
Further, working beyond your full retirement age can pay off with a higher monthly Social Security payment due to delayed retirement credits. Social Security rewards people for holding off on claiming until after their full retirement age by increasing their payout by about 8% per year up until age 70.

If you’re a bit further away from retirement, then it may be a good time to ask your employer for a raise. The average American’s hourly earnings grew 2.8% year over year in October, and if your income isn’t keeping pace, it may be worth bringing up the topic with your supervisor. After all, unless you’re already at the maximum benefit, any additional money you earn every year can increase your AIME and primary insurance amount.

Finally, if you’re 62 and want to retire, consider working half-time while collecting your Social Security benefit. If you claim at 62 you’ll receive roughly 75% of what you would otherwise receive at your full retirement age, and if your earnings eclipse $16,920, then Social Security will hold back $1 for every $2 you earn above that limit. Those withheld dollars will then be used to increase your benefit once you reach your full retirement age.