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Joseph R. Biden was sworn in as the 46th President of the United States on January 20. While the incoming administration is expected to take significant steps on a host of issues in the coming weeks and months, there are several proposed changes to the American retirement system that could impact 401(k)s for people across the income spectrum and some that will increase awareness of the benefits of offering 401(k)s to employees.
Read MoreFinancial professionals often preach the importance of the “buy and hold” strategy— especially for long term investments such as small business 401(k) plans — a point I emphasized at the beginning of the COVID crisis. Investors should be disciplined to avoid selling stock investments selling equities during a trough in the market.
Read MoreA Safe Harbor 401(k) Plan is a type of 401(k) Plan with a mandatory employer contribution that allows the plan to satisfy annual compliance tests. The plan will automatically pass ADP and ACP Nondiscrimination Tests and will be deemed as satisfying Top Heavy minimum contribution requirements. This plan design allows highly compensated and key employees maximize their personal deferral contributions ($19,500) for 2020. If you do not offer a Safe Harbor employer contribution, your plan is subject to these tests, and there may be limitations to deferral contributions for key and highly compensated employees.
Read MoreThe impact of COVID-19 is disrupting all facts of life for individuals and businesses alike. Small business 401(k) plans have not been immune, but to what extent? LT Trust conducted a survey of all Plan Sponsors to gauge COVID’s impact on our clients. In total, LT Trust received 337 responses, segmented by number of employees and the 11 sectors of the S&P 500, to illustrate how the pandemic is affecting a variety of industries.
Read MoreThose two simple steps allow compound interest to work its powers and easily set you up for retirement. Unfortunately, it’s a lot easier said than done. Especially for Millennials, who have more debt than any other generation, according to the New York Federal Reserve. Millennials — anyone born between 1981 and 1996 — are experiencing student loan debt, car loan debt and worst of all, credit card debt. Simple math suggests it’s probably better to pay off debt before saving for retirement, but one could argue that you should always save for retirement while paying off debt. Let’s first discuss the importance of savings for your future.
Read MoreFiling the Federal Form 5500 is the last step of the compliance process, and needs to be completed by the employer every year, and the process usually begins immediately following the end of a plan year. For most of LT Trust’s small business 401(k) clients, a 12/31 year-end plan date is common, and there is a significant flurry of compliance activity surrounding the process. Although this year’s deadline has been extended for most plans, due to COVID-19, the compliance process remains the same. Let’s take a deep dive into the processes that the LT Trust team uses to ensure each client’s compliance needs are satisfied.
Read MoreThe recent market sell-off may seem alarming but we can find comfort in the history of the markets. It shows us that all things are cyclical and we’ll likely see a return to good times before too long. Instead of making emotional investment decisions, now is a great time for retirement savers to revisit their long-term plans and make sure they’re still on track toward their retirement goals. Part of that could mean rolling over an old 401(k) or IRA into their current LT Trust 401(k). For the retirement saver who isn’t sure why a rollover makes sense, we discuss considerations in this post.
Read MoreHow many investors wish they could step back in time and implement a recurring rebalance for their portfolio that would have consistently sold a portion of their equity holdings and purchased more fixed income? To first understand the importance of rebalancing your portfolio I would like to begin by providing a definition of what rebalancing is. Then we will look at 26 years’ worth of portfolio returns and track the equity allocation during that period.
Read MoreDetermining 401(k) participation rates has historically been less a science and more of an estimate. You may ask yourself, what criteria makes up these rates? I did some digging and have found that the common assumption to define participation rate is to divide eligible participants with a balance by total eligible participants, and explain the details in this post.
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