How people get as much as 88% more from Social Security!

December 30, 2016 | posted in: Blog | by

Many people may be unaware of the impact various decisions can have on their ultimate social security benefit amount. Timing of election, work income, taxes, spousal benefits, etc., must all be considered in effective social security benefit planning.
Regarding the timing of elections, for example, according to a recent study covered by CNBC, someone who retires and begins claiming Social Security at age 70 would receive a benefit that’s 76 percent higher than the one he or she would receive at age 62. The CNBC piece points out that if you factor in late-career earnings replacing a zero-income year, the increase can become as much as 88 percent for women and 82 percent for men.
At Frye Retirement we are familiar with the complicated algorithms, and can crunch the numbers and guide you with any of your social security planning questions. For the full CNBC piece click here:  how to get 88% more from social security.

There’s still time for 2016 tax savings…but it is running out!!

December 19, 2016 | posted in: Blog | by

With proper 401(k) retirement plan design techniques, clients can reduce taxes, improve owner benefits, and lower employee costs:
 

$53,000 individual deduction limits for 401(k)/profit sharing plans.  If 50 or older, up to $59,000 can be funded into 401(k).
Contributions of up to $300,000 for small business owners in Defined Benefit plans (depends on age and service).
IRS tax credit of $500 per year for the first 3 years of the plan for installation and administrative costs if your client has employees.
Uni-K plan to maximize deductions for self-employed, owner-only or owner-spouse business owners with low W-2 wages (i.e. deduct $28,000 with only $40,000 in wages; if 50 or older, deduction increases to $34,000.

DON’T DELAY:  Plans must be adopted by December 31, 2016 (but plans don’t have to be funded until 2017).

Rx: Seven Steps to Financial Wellness

June 25, 2016 | posted in: Employee Education | by

The goal of good health should be at the core of decisions you make about money.

As any wise person will tell you—and many have, from the Roman poet Virgil to Gandhi—health is wealth.

The irony is that the converse is also true—a growing body of research suggests that financial problems actually can lead to health problems.  Financial stress has been shown to cause anxiety, migraines, sleep disorders and other physical ailments, including high blood pressure and heart disease.1 And it’s not a rare occurrence. A 2015 survey by the American Psychological Association (APA) showed that 72% of Americans reported feeling stressed about money at least some of the time during the past month.2 Stress levels are particularly high among parents, younger generations and those living in lower-income households. Over the past decade, psychologists coined the term Money Anxiety Disorder (MAD) to describe a condition of constant worry and unease about money. The emotions that arise from worrying about money can lead to health issues that affect job performance, relationships, and feelings about work-life security.

What triggers financial stress?

Not all people react the same to financial roadblocks, but there are several major causes of money-related stress:
• Fearing the possible loss of a job
• Comparing financial situation to others’ — being anxious of “having enough”
• The effects of piling debts

How to face health-related money anxiety

Many Americans resort to eating unhealthy foods, or eating and drinking to excess, as coping mechanisms for financial stress. Health experts warn this can lead to long-term health issues, and instead they recommend deep breathing exercises, which have a proven calming effect on the central nervous system. Regular exercise and sticking to a healthy diet can also be very helpful.

De-stressing about money

Financial experts often suggest taking a direct approach to analyzing your relationship with money so that you can manage financial stress. Some recommend taking one or more of the following steps that can help lead to financial wellness.
1. Understand the role of good health in your life – Money is never a substitute.
2. Prioritize your savings and control your spending – Warren Buffett said it best: “Do not save what is left after spending, but spend what is left after saving.”
3. Budget – You cannot manage your finances without a plan.
4. Plan for life events – Experts suggest setting aside specific “buckets” for nearterm emergencies, education and long-term retirement.
5. Locate a trusted source for advice – This could be a colleague at work, an investment professional or a close relative who is sensible about money.
6. Participate – Get the most out of the benefit programs you’re offered at work.
7. Choose carefully – Select “sleep well” investments that don’t cause anxiety.
By following these guidelines, you’ll be able to put financial wellness in the right perspective. Ultimately, the goal should be to know how to deal honestly with your feelings about money in ways that don’t compromise your health.

Good News on Tax Saver’s Credits

May 25, 2016 | posted in: Employee Education | by

Laws that were enacted as part of the Bipartisan Budget Act of 2015 include new rules that could mean larger tax credits for some workers.

Bigger Retirement Savings Contributions Credit

The Saver’s Credit is an important tax credit that many American workers who save for retirement may be missing out on. Low and moderate-income savers who meet IRS requirements may be able to take a bigger tax credit (“Saver’s Credit”) of up to $2,000/$4,000 (singles/couples) for making eligible contributions to an employer sponsored retirement plan or IRA. To see if you qualify, visit www.irs.gov and enter “Do I qualify for the Retirement Savings Contributions Credit?” in the search box.

Plan Sponsors Ask…

May 25, 2016 | posted in: Plan Sponsor Corner | by

Q. Can Participants Really Save $1 Million in Their 401(k) Plans?
A. Many participants really can save $1 million in their 401(k) plans by contributing a modest percentage of pay, if they start early, invest well, and receive regular pay raises.
Columnist Andrea Coombes came to that conclusion after tinkering with the 401(k) calculator at BankRate.com. Specifically, Coombes says a participant earning $75,000 annually and receiving 3% pay raises each year could accumulate $1 million by contributing 7.3% of pay every year for 30 years. The participant would need to get a 7% rate of return on the account and an employer match of 50% of the first 6% of contributions. A goal of $1 million in retirement savings very likely seems out of reach to many participants. Regularly communicating about saving and investing, including showing projections translated into retirement income “paychecks,” can make a difference.
Read Coombes’ MarketWatch column for more information at http://tinyurl.com/SaveMillionMktWatch.
 
For plan sponsor use only, not for use with participants or the general public. This information is not intended as authoritative guidance or tax or legal advice. You should consult with your attorney or tax advisor for guidance on your specific situation. Kmotion, Inc., 412 Beavercreek Road, Suite 611, Oregon City, OR 97045; www.kmotion.com ©2015 Kmotion, Inc. This newsletter is a publication of Kmotion, Inc., whose role is solely that of publisher. The articles and opinions in this publication are for general information only and are not intended to provide tax or legal advice or recommendations for any particular situation or type of retirement plan. Nothing in this publication should be construed as legal or tax guidance; nor as the sole authority on any regulation, law or ruling as it applies to a specific plan or situation. Plan sponsors should consult the plan’s legal counsel or tax advisor for advice regarding plan-specific issues.