7 Reasons You May Never Retire

If you ran out of money at age 80 what would you do? Sobering but true, below are only 7 reasons you may never retire. These items should alarm you but it won’t. That’s because unless you study this stuff, and I do, you won’t see the problem or what it means to you.

I’m not a doomsday sayer. I’m just a guy watching this story unfold, and watch it get bigger. I do like the image of politicians, “kicking the can down the road.” But, really, aren’t we all kicking it down the road?

So, listen up, here’s the list of 7.

1) 10,000 Americans reach age 65 every day.
2) Companies offering Pensions has dropped from 112,000 to 23,000
3) 45% of workers cannot access employer-sponsored 401k or pensions.
4) Medicare and Social Security will run out of money by 2028 and 2034.
5) $300 Trillion dollars are owed for unfunded public pensions
6) Americans don’t save, in fact, Americans have a negative savings rate.
7) Politicians have too many competing interests, so they kick the can.

The earlier one starts to save, the easier it is to accumulate sufficient wealth at retirement. The corollary to this is that the longer a country (or an individual) waits to address these issues, the fewer options there will be for solutions, and the options that remain will become more and more difficult to successfully implement (source noted below).

The authors of the article I quote grade our current 401k system as a letter grade of “D+.” I’m not sure what the plus sign means, but I can tell you many individuals are not prepared to retire because so few have pensions (that’s what your Grandpa or Grandma had), and those with a 401k have put too little in it.

Work for a City or other governmental unit?

There is a combined $300 Trillion in unfunded liabilities for employees of these places of work. And, these employees are going to look for their retirement check and receive something like what Detroit retirees received, which was pennies on the dollar.

Your parents and grandparents retired with a pension. They received a check each month for as long as they lived, that, plus social security, made a very comfortable retirement for many people. With the list of 7, you can hopefully see you’re unlikely to retire the way you might be thinking.

You can save now, try closing your Amazon account. Or, find any other way to save. Whether you’re by yourself or at a company or government, the time to do something is now. Make saving and asking questions to protect retirement important to you. After all, I have a friend who says;

“What gets attention, gets done.”

I love these conversations, either to help you as an individual, or your employer. I am happy to help or steer you to better resources.

Building a Strong Retirement Program: One for the AGES, Benefits Quarterly, International Society of Certified Employee Benefit Specialists, Brookfield, Wisconsin; www.iscebs.org.

NEW – AHP, Catholic Business Owners Healthcare Relief

Catholic Business Owners

The NEW AHP regulations created to fit President Trump’s Executive Order make it possible to create a Catholic Buying Trust. This provides owners a way to control what they pay for in healthcare.

This is the biggest news in benefits since ERISA. Small business owners can keep their firmly held beliefs (respect for all Human life), follow their conscience, offer the Dignity of the Human Person in their Healthcare plan, and own the ability to choose how to lower cost. Perfect! Continue reading “NEW – AHP, Catholic Business Owners Healthcare Relief”

How is a benefit plan like a bus route?

family_schoolbusflasher
School bus flashers are for the safety of the children on and off the bus.

A benefit office is supposed to make decisions for the benefit of the beneficiaries. A bus route should be concerned first for the safety of the children.

On the main road connected to my subdivision, two different school districts have bus routes running in opposite directions. The road is a two lane semi-rural, 50 MPH road. I’d add, drivers routinely move at 60 MPH or more.

Lake Orion School District buses travel southbound. Rochester Community Schools travel northbound on the very same road; it’s Adams Rd. for those interested in the particulars. In both districts, the bus stops on the road or shoulder but does not turn into the subdivision.

Lake Orion has chosen to tell bus drivers not to use the red flashing stop safety lights when picking up the children. And, by contrast, Rochester Community Schools does instruct drivers to turn on their red safety flashers. Continue reading “How is a benefit plan like a bus route?”

An Obamacare Article Written for CPA’s is Right On

“Choosing the right plan requires the knowledge to make the right choice.” I couldn’t have said it better.

Screen Shot 2015-03-06 at 6.08.54 AMDuring the Goldman Sachs 10,000 Small Businesses classes and work I learned just how difficult it is for an owner to hear my message. It’s because when I say the word insurance, the label “insurance dude” is applied. That’s fine, except with it usually comes the connotation that I’m going to sell them insurance. It’s a logical conclusion but it would be wrong. Why?

If what I was doing was popular people wouldn’t get to that conclusion, instead they might ask, “are you selling a product or are you providing independent advice?”

The quote I found while reading an article makes my case why I’ve left the “agent/broker/consultant” world to help America do better (watch my video).

So, I’m reading an article written for CPA’s on the topic, PPACA – Obamacare. It’s a 4 page article making recommendations to CPA’s on how to advise their clients on these complicated topics: insurance markets, metal levels, pricing and benefits, government sponsored exchanges, SHOP, private exchanges, self funding, pay-or-play, employer reporting, limited networks and finally underwriting.

“numerous strategies are available to businesses as they try to make the best health insurance choices for themselves and their employees in this new regulatory environment. Choosing the right plan requires the knowledge to make the right choice.”

“Health Care Reform Essentials”, Journal of Accountancy, July 2014; Dietrich, Marks.

This statement could be the description of BenStaff’s Decoder work.

Two critique’s I have about this, first, what a great list of all the new options in healthcare, it demonstrates what I’ve been saying now since March of 2010. The very reason I built BenStaff and BenStaff’s team built the Decoder. On one hand it’s as easy as the article states. But, to optimize the right balance between taking risk (self funding) and low cost and access (limited networks) the question is, who is better suited to advise on these matters?

My team is independent, we don’t sell insurance, and we have much deeper knowledge of benefits especially healthcare. Having former underwriters we know risk and pricing in groups and individual markets, our actuarial team provides expertise to the Decoder, our CEBS specialists cover the plan in operation requirements of the DOL, HHS, CMS and the IRS. And, we encourage a businesses advisors to offer their best thinking so don’t miss something. A small businesses CPA, CFO, HR executives, attorney’s or other advisors are welcome to contribute. No one person has all the answers but we believe we’re as close to that as possible.

Our structure gives us dominance and reach into every market and option available. Overall, our Decoder is the answer to the question posed to owners and CPA’s at the end of the article, beautiful;

“Choosing the right plan requires the knowledge to make the right choice.”

I couldn’t agree more.

How is it financial firm doesn’t understand it’s own fees?

It is remarkable that a financial institution like Citigroup is being sued by it’s own employees, who should have known they had fees included in their own 401k’s. How is it that employees who build these plans for use by small business accepted the practice of excessive fees in their customers plans.

Where was the outcry, education to their own customers?

Nearly seven years after their awsuit was filed, the plaintiffs in a “self-dealing” case against Citigroup will be allowed to move ahead with their claims.

On Sept. 30, U.S. District Judge Sidney Stein denied Citigroup’s motion for summary judgment, which would have thrown the case out of court based on Citigroup’s assertion that the statute of limitations had passed.

The suit, brought by former Citigroup employees Marya Leber and Sara Kennedy, is one of a number of excessive-fee cases filed in recent years.

It alleges that Citigroup breached its fiduciary duty by including its own fund options, and those of its affiliates, in the company’s 401(k) plan despite having higher fees than competing funds of equal

Specifically, the plaintiffs allege that Citigroup’s funds “charged higher fees than those charged by comparable Vanguard funds— in some instances fees that were more than 200 percent higher than those of comparable funds.”

Court documents show that in 2003 Citigroup’s investment committee eliminated 10 unaffiliated funds and added the new funds, including three of Citigroup’s own options. Participant assets were then automatically transferred to the new or remaining funds, four of which were Citigroup’s own or Citigroup-affiliated.

Citigroup’s motion to dismiss the case was rooted in the claim that the plaintiffs were aware of both the affiliated status of

the funds in question and their fees more than three years prior to the suit’s filing.

Under the Employee Retirement Income Security Act, if plaintiffs have “actual knowledge of the breach,” then they must

bring their claim to court within three years of acquiring that knowledge.

Stein wrote that the plaintiffs did not have “actual knowledge,” as Citigroup claimed, because Citigroup failed to prove that

the plaintiffs were given data on the fees of comparable funds.

In denying the motion, Stein said Citigroup had “not even attempted to offer evidence that plaintiffs possessed the fee data

“Citigroup employees could have earned millions more for their retirement if Citigroup had followed the law,” alleged Greg

The plaintiffs are expected to ask the court to certify theirs as a class-action claim.

Benefits Pro; link: http://www.benefitspro.com/2014/10/08/judge-rejects-citigroup-bid-to-dismiss-401k-fee-ca