Category Archives: Uncategorized

You don’t still use a flip phone? The DOL’s new proposed electronic disclosure safe harbor

What were you doing in 2002 and what did your phone look like? We would venture that your phone wasn’t your main hub for how you access & digest information. It was probably intended to make phone calls and maybe send some text messages. As technology has changed, the DOL has decided to offer up a second safe harbor for the electronic delivery of required plan notices.

Many plan sponsors are unaware of the relatively high bar to achieve the 2002 safe harbor. Under the current safe harbor, employees had to have notices (think summary plan descriptions, fee disclosures, safe harbor testing disclosures, summary of material modifications, black out notices, qualified default investment alternative notices, auto-enrollment and escalation notices…did I miss any) either delivered by hand, first class mail, or electronically IF participants have electronic media at work or have consented affirmatively to allowing electronic delivery.

There aren’t many plan sponsors that meet this bar for employees and even fewer who meet this bar for terminated participants who maintain balances and beneficiaries. Fortunately, the DOL has offered up a 2nd safe harbor to meet your disclosure requirements (a shade under 17 years, thanks Big Paper and the AARP lobby)!

The new safe harbor would be optional for plan sponsors and could be used to communicate to plan participants who either provide an electronic address (which could include a phone number for a smartphone) to the plan sponsor or have an electronic address assigned by an employer. Under the proposed rule, plan participants would need to receive both:

-a one-time paper disclosure stating that some or all disclosure documents will be furnished electronically, and

-for each required disclosure, an electronic notice of internet availability with a brief description of the document(s) and instructions on how to access information on the website.

Participants must also be notified of their right to receive paper copies of some or all plan notices. The website hosting the disclosures must also meet certain requirements. This new proposed rule would help alleviate some of the burden. It is far from perfect and more importantly it isn’t a final rule but as plan sponsors are going through their annual disclosures and wondering why you have to mail these things (mainly), you now know the reason and the alternatives. #401k #QPRetirement #403b

What can we learn about the Nationals World Series title (and even the Astros)?

Even if you are not a baseball fan, you may have read about the Washington Nationals improbable run from a record of 19-31 to the wild card and eventual World Series title. During that run a lot of strange things happened. That Nationals were down 3-2 to the 106 win Dodgers. Miraculously they won the last two to win the series. In the World Series, the Nationals jumped out to a 2 game to 0 lead winning both games in Houston.

Clumsy sportscasters were already planning the parade only to watch in horror as the Nationals dropped the next three at home. Down 3-2 in the series, the Nationals were largely assumed to be done. But low and behold, the Nationals won the next 2 and for the first time in 115 years, no home team won a game in the World Series.

What can this teach us about investing & retirement? The first lesson is to never give up. Whether you got off to a late start, weren’t able to save much early in your career, or ran into some road bumps along the way that forced you to watch your account balance rapidly diminish, it’s not over until it’s over.

The second thing this teaches us is small adjustments can reap huge benefits. They may not be obvious at the time, but increases to contributions, deliberate allocations, budgeting discipline, and realistic expectations can all help towards achieving a successful retirement. Down 0-2, the Astros made some adjustments and got back into the series despite being written off early in the series.

The last thing the series taught us is all things aren’t always as they appear. Maybe your living expenses are going to be considerably less in retirement. Maybe your savings rate will jump up significantly as soon as your student loan debt is paid off. Maybe your health is strong and you plan to work well past the assumed rate of return. As I walked to game five of the series, the reality of Max Sherzer not pitching immediately dimmed expectations for that evening. While the Nationals lost, the silver lining was that Max Sherzer was able to get healthy for game seven and help propel his team to a title. It’s never too late to start doing the right thing and to get your retirement savings in order. #401k #403b #457b

What is an HSA?

Some employees have access to an HSA today and are unaware of it. Unlike an FSA which requires that money in the account be spent by the end of the calendar year, an HSA carries over from one year to the next. An HSA is a health savings account that can be paired with a HDHP (high deductible health plan). For those who don’t spend much on healthcare from one year to the next, you can invest the money in an HSA to continue to grow just like your 401K.

The money can be pulled out to pay for qualifying health expenses at any time even if the expense occurred years before. These accounts also are tax deductible going in, grow tax free, and aren’t tax when used so they are more efficient then your 401K or 403b when paying expenses in retirement. If you have a HSA option and you have low relative health costs, now is probably a good time to consider using this to further lower your tax liability.

Should you Roth your 401K?

This is really a question that deals with taxation. As you may know, the Tax Cut & Jobs Act of 2017 temporarily lowered tax rates for many Americans. Those cuts are set to expire in 2025 without further Congressional action. Typically the lower your income, the lower your federal income tax liability. As you move up the income scale, your tax liability grows.

Regardless of whether you choose to defer into the Roth portion of your plan or the pre-tax piece or both, you must defer at a high enough rate to insure retirement success. Keep in mind as well that your employer’s contribution will always be on a pre-tax basis so regardless of what you do you will likely have some tax liability in retirement.

Don’t be Chicago!

While reading my Sunday paper, I read a good editorial on the perils of over-promising and under-delivering. Chicago unfortunately was the guilty culprit. For decades, city employees have been promised healthy pensions yet their employer has not funded those liabilities. What can you learn from this as a retirement saver?

We talk to employees all the time about budgeting, saving, rebalancing, and increasing deferrals with pay increases (both at work and in the home budget). Unfortunately, employees frequently are worried about the here and now (as are most politicians) more than the future. We are asked about the “best” investment option or inverted yield curves but many fail to realize that those aren’t going to have a big impact on their small savings rate and retirement will remain illusive. As employees keep kicking the can down the road, many wake up only to realize they are in their late 50’s and have to save a considerable sum of their income to catch up. This is frequently in conjunction with a realization that retirement at 67 isn’t going to happen.

Chicago is going to be forced into this realization unfortunately it will be paid for by their tax payers and beneficiaries. As an individual, you don’t have a back stop. The same boring stuff still applies. Save early, save often, and increase as you move through your working years.

What is the optimal savings rate for your retirement plan?

When talking around the watercooler at work, we frequently hear a lot of tips about life. One that is probably wrong is how much to save in your firms retirement plan? Is the answer up to the employer match? That was what we heard when we started by in ’97. Unfortunately the follow up questions that an expert could help you with on your 403b, 457 or 401K involve a deeper look.

When did you start saving? When do you plan on retiring? Are you paying off student loans? Are you saving for the purchase of a home? What other savings do you have for retirement? Do you have an emergency fund? Are you paying off any other debts like credit card debt?

Those are just a few of the considerations that would lead you to the correct savings rate. Fortunately if you are a participant in a QP Consulting advised retirement plan, we have the tools and resources to help you with this.

What is the magic number needed for retirement?

The real answer is it depends. Are you going to own your home outright by that point? Will you continue to work part time? Are you going to down size or move to a lower cost of living area? Are your dependents off the payroll? Do you put a large portion of your paycheck towards savings currently?

These are all factors in the magic number. Despite that, the news will always try to pinpoint a number so here is one article that gives it a shot:

QP Consulting sponsoring the Ride for Paralysis

QP Consulting LLC will be participating in Next Step Fitness “ride for paralysis”. This cross country wheelchair ride will raise funds & awareness for the critical need for wellness services for those living with paralysis. Our firm President Mark Ivcevich will be joining Janne Kouri for the Amarillo, TX to Oklahoma City, OK portion of the ride as well as the final leg from Manassas, VA to DC. Please follow us on the road: