Maximizing Employer Contributions

you're an employer. As a matter of fact, you're an employer, We're going to be talking about something very specific to you about the important role that you play in retirement planning. But you can learn more about Class Financial on their website Coss Financial dot com. That's Coss k l a A s Financial dot com and their telephone number six oh eight four four two five six three seven. No charge for that initial get to know you appointment tech

Coss Financial. It will be complementary, complementary to you again their number six oh eight four four two five six three seven. And joining us this morning are CJ. Coss and Forrest Ross of Class Financial.

card to the cheesecake factory. Our friends from Class Financial have provided that will tell you a little bit later on how you can win the class quiz quesch the week how you can win that prize.

one K plan. And this kind of makes sense when you think about it, because when you're planning for retirement, a lot of people can feel overwhelmed and just not sure what to do if they don't have the right guidance. So what can employers do to help provide some support to their employees through the four one K plan? And this survey indicated a couple of key ways employers can help. First of all, they can help by provide personalized planning

tools through their four to oh one K plan. So these days, there's a lot of online calculators projection tools that can help employees figure out what's the right amount for me to save in my four to oh one K plan and how big of a nest egg do I need when I retire. That's one of the big questions that we get all the time when we're talking about participants about their four oh one K plan is how much do I save? How much do I need?

And again, a lot of these tools can really help answer some of those questions for people and put a very complex question into very easy and understand terms. Next, an employer can provide financial advice through their four oh one K plan so employees consistently show that they value access to professional advice. Whether that comes through in person one on one meetings or group meetings or phone comsultations

or zoom meetings. You know, there's multiple different ways that employers can provide that kind of access to employees that can really help them get some good guidance. Next, they can also look at expanding retirement plan features in their

four oh one K plan. There's been some recent legislation that allows employers now some more innovative features like adding the option for student loan repayment matching program, emergency savings accounts, or even guaranteed income choices and all of those can really enhance an overall retirement plans effectiveness and also assist the employees as well, and then finally educate your employees again through the four oh one K plan with retirement

with workshops and webinars, people really appreciate being able to access some of these wellness what we would call financial wellness tools, maybe when they're at home with their spouse at night. So giving the employees access to some of these more comprehensive financial planning topics through webinars and workshops can really be valuable to them as they're trying to navigate their financial situation.

to engage planning experience for their employees. So this means going beyond just the standard features like auto enrollment or auto escalate and really help provide their employees with a clear, personalized roadmap so that way they can use these different tools in the forum that they're being provided for through their four oh one kese services to help them really make intelligent, thoughtful financial decisions.

dot com. Also, while you're there, you can sign up for the weekly Market Pulse newsletter. It's a great weekly email comes in your inbox. We'll snapshot of what's been going on in the market. Also link to the most recent podcast again. That available to you at classfinancial dot com. Betel for number six oh eight four four two five six three seven. No charge for that initial get to know you appoyment tech COSS Financial. It will be complementary

to you again. Their telephone number six oh eight four four two five six three seven. Looks you to our conversation with cjn Forrest. We'll talk a little bit about four oh one k's and you. We'll do that next as Money in Motion with Coss Financial continues right here on thirteen ten wiv A talking this week with Forrest Ross and CJ.

six three seven. No charge for that initial get to know your appointment at Colss Financial. It will be complementary to you again. Their number six oh eight four, four, two, five, six, three seven. Talking in that last segment with Forrest about the employer side of retirement planning, let's kind of shift gears then and talk about what folks can do as it comes to being a four to oh one K plan participant. What can regular people do to kind of take control of their retirement planning?

are they talking about? Employer sponsored? These are your traditional So if you work somewhere often not always, but often your employer will offer things like simple irays or SEP I rays or four oh one ks or four h three v's or fourty sevens or four oh one a's and there's all these different terminologies, but the idea being it is the your employer who is sponsoring that retirement plan for your benefit. So those are the plans we're talking about here, And these are the plans that have

different resources potent available to you. We're going to talk about some of those resources and how to empower you. So Number one, take advantage of various employer resources. So things like if your employer provides financial planning tools or advisor access, we would suggest use those tools. These resources can simplify decision making and clarify your path to retirement. Check with your h artist's team at your employer to

see what benefits are available. And when we say that, we're referencing, like you go to the website for the four to one K plan, often they'll have these calculators like calculate if you're saving enough to actually retire someday now. Often if you work with a financial advisor, they will

do these same calculations for you. But the of course, an advisor costs money, right Whereas these employer financial planning tools that are on the website, they may be less robust, but they can at least give you a sense of if you're headed the right direction. Number two would be to increase your contributions. Even small increases in retirement contributions

can make a big difference over time. For example, raising your four one K contributions by just one percent annually can add tens of thousands of dollars to your retirement savings through compound growth over a lifetime. If your employer offers matching contributions, obviously be sure to take full advantage, and it's essentially what we would call free money for your future. Do be aware of some of the maximum

contribution limits. We've talked about this in previous shows, but if you are under the age of fifty in twenty twenty five, you can contribute up to twenty three thousand, five hundred dollars into your four to win K or four h three B. And if you're over the age of fifty, you get an additional seventy five hundred dollars catch up contribution, and believe it or not, starting this year and in future years, if you're over fifty, but

specifically sixty to sixty three, your catchup amount is eleven thousand, two hundred and fifty dollars. So be aware of these ages. These are amounts going to want to like try to contribute to those four one K plans as much as possible.

that you make. Similarly, like on diversification, you have to look at the consequence of being wrong. So the consequence of putting all your money in one investment is if that investment doesn't do well, it ruins you financially. So in a similar way. And by the way most people get this, they go, yeah, yeah, yeah, but think of that through the lens of financial planning decision making, such as like I save everything into my four oh one K plan. Well, if you do that, are you are

you aware of your debt load? Are you paying down your debt? Are you building up an emergency reserve so that if you lose your job you can actually live without having to tap your four oh one K plan before you're eligible. You get the idea that would be diversification of financial planning focus. So don't just think about saving into your four one K plan. Think about the rainy day fund, the high interest credit card debt, the auto loan that you have, the mortgage. Diversify your focus

outside of the four one K plan. And Forest can attest when he goes to different employers that we work with where we sponsor the four one K or I'm not sorry not sponsor, but we're the advisor on the plan, he will often be talking about these topics. So he will say, hey, here's not only what you need to be doing in terms of saving into your retirement plan, but have you been thinking about these other topics. Step

number four would be to just educate yourself. So if you're listening to this show, you can you can check the box because you're already educating yourself. But read articles, listen to podcasts. You know, often our clients will reach out to us and say, hey, what podcast do you listen to? And so truly I love this question because I could give you, you know, three or four fantastic financial podcast to just up your IQ. And then you know, Number five on our list is review and adjust your

plan regularly. So this would be your estate plans, your financial plans, your insurance plans. This is the whole of your financial picture. You need to review it pretty consistently. We believe this is where a financial planner can be a huge value add because they will systematize or automate the ongoing review of your financial plan. We often find that if people do it on their own, they spend

all their time on one topic. Right. Like one might be like, I love my investments and I look them up every single day, and then you go, do you have an estate plan? And they go, no, if I die, I don't know where my money is going. But I've got these great investments that are really great. You get my point. The idea is a good financial planner. We'll be looking at the scope of your financial life and kind of forcing you to pull your head out of the sand and look at it all.

you apployment dech loss Financial. It is complimentary to you again their number six oh eight four four two five six three seven and CJ laid out really good information there. And I've got a guest though, for ust take some time and effort to kind of put that stuff into practice, doesn't it?

we talked about earlier going to fit together. But then you also have to be aware of, you know, things happen in life. It can throw you a curveball, so your plan has to be able to kind of be flexible and be able to accommodate some of those unexpected things that can come up as well.

maybe it's just sporadically. But if she sits down and takes the time to develop a plan with a professional, maybe she's able to establish a budget to kind of get control of her expenses. That then she can start saving small, consistent amounts into a four to oh one K plan and maybe even increase it as time goes on and she gets pay raises, and those kind of action items can really help put her on track to

be successful overall. And let's also take a look at maybe a second person, Jim, who's maybe thirty years old, hearing retirement and Jim realizes that he didn't start saving for his retirements until later in life, maybe either his late thirties or early forties, and he really feels like he's behind the eight ball, right, He's like, I didn't start until later. You know, how am I ever going

to get where I need to go? And the answer is he can still get there, but maybe he needs a plan to help make him realize that he can use those catch up contributions that we talked about earlier or other things to help make up for that lost time, so that way he can get back on track and optimize his savings and help really enhance his nest egg for his overall retirement. So here's really what we believe. The takeaway is, you know you can achieve financial security

and retirement have a successful retirement. It is possible, but it doesn't usually happen by accident. You know, it really requires some serious intentional thought in planning, and you should really just start by assessing your current situation in where you at and then set out really clear, thoughtful, actionable goals.

And please don't hesitate to reach out to a professional if you need help, whether it's a financial planner CPA, a trusted family member, or tapping into those four oh one K resources that we talked about from your employer. Don't be afraid to ask for advice if you really feel like you need it.

to you at class financial dot com. The telephon number six oh eight four four two five six three seven. No charge for that initial gets to know you appointment at Coss Financial. It will be complimentary to you. We're going to continue our conversation with CJ and Forrest. We're also going to check the inbox. We will do that next as Money in Motion with Coss Financial continues right here on thirteen ten.

four four two five six three seven. Coming up a little bit later in the segment, we'll do the Money in Motion the closs quiz question of the week. We'll do that a little later the segment, but first we've got the Money in Motion listener question corner and Tom took the time to write in he's got the following question. He says, my father recently passed away and left me his IRA. I've heard something about a ten year rule,

but I'm not sure what that means. How does it affect my inheritance and what are my options for taking distributions in CJ.

called the ten year rule. Now, it didn't used to always be this way. So you used to be able to inherit money from a parent it was in a retirement account, and you could use your own life expectancy tables to perform distributions over your life expectancy, but not so much anymore. If the death occurred after twenty nineteen, then these new rules apply, which is this ten year rule.

And this means that while you are not always required to take an annual minimum distribution, you must fully withdraw all the funds from the IRA within ten years of your father's passing. Now, I do want to just hone in on something there. You may or may not be required to pull annual minimum distributions. It depends upon whether or not your father had had reached his required beginning

date known as an RBD. If your father had reached his required beginning date, which is just for rm D purposes, then you will have to continue pulling out at least a minimum distribution and then make sure that all the money is out by the end of the tenth year. Now, remember if this is a traditional IRA, as that money comes out, it becomes income taxable to you. And finally,

if it's a roth iray. You still have to abide by the same rules of getting it out, either you know, a little bit at a time, or all at the end of the tenth year. But there's just no tax as you pull the money out of the wroth for everybody, just so you know, when our clients come in. Most of the time, not always, but most of the time we are actually spreading out that ten year that that distribution over ten years pretty equally, especially if our clients

are old enough. So I don't know your age, but you know, depending on your age, it might just be Hey, if I'm in retirement, you know, and I need to pull out the money and it's taxable as I receive it, how should I do this? Many times we're just evenly distributing it. There would be an exception if that was a wroth ira there's a wroth, we'd want to leave it alone as long as possible. But long story short here, this whole ten year rule has created a lot of

additional confusion for people. They don't know how to adhere to the rules. A lot of the custodians have not built tools to actually help you on this, so many times they don't even know think the schwabs and fidelities of the world to be like I don't know. It depends on exact circumstances. Talk to your financial advisors what they'll say. So it just really encourage you when you start getting into inherited retirement accounts and needing to meet

certain guidelines or rules. This is probably where a good CPA or advisor would be a big help.

turn RMDH. So if your MDA is seventy three and that's in twenty twenty five, you don't have to pull out a minimum distribution until April first of next year. So interestingly enough, then you say, well, but my father died, what does that have to do with it? The question is did your father reach their RBD that April first

of the year after hitting r MD age. And if the answer is, oh, yeah, yeah, yeah, my father was seventy eight years old and had a minimum distribution, well then you actually have to continue pulling a minimum distribution that was at least as much as what he was over those ten years, and then by the end of the tenth year, all the money has to be out of the retirement account. Oh boy, A bunch of complications.

You can hold on to that telephon number because it's time now for the Coss Quiz Question of the week.

say twenty five dollars gift card to cheesecake factory. This week's Closs Quiz Question the Week is this in twenty twenty five, what is the total amount you can contribute into your employer's retirement plan if you are under fifty? Is it twenty thousand dollars or twenty three thousand, five hundred dollars? Telephone number six oh eight four four two five six three seven. First cost correct answer, wh that's

twenty five dollars gift card to the cheesecake factory. And again that's COSS Financial's office right here in Madison six four four two five, six three seven CJ.

does not offer tax or legal advice. Any opinion offered during the course of this show is the opinion of that particular investment advisor representative, and not necessarily the opinion of COSS Financial. News comes your way next right here on thirteen ten wiba