Mid-Year Financial Check-Up: Why It’s Important and How to Conduct One

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Hey there, financial aficionados and savvy savers! Can you believe we’re already halfway through the year? Time flies when you’re having fun or knee-deep in work, family, and trying to remember where you left your car keys. With the year’s midpoint upon us, it’s the perfect moment for a Mid-Year Financial Check-UP. Whether you’re a meticulous planner or a free spirit, this check-up is your golden ticket to ensuring your financial goals are still on track.

Why It’s Important

  • Stay on Track: Remember those financial resolutions you made with a sparkle in your eye on January 1st? A mid-year review helps you see if you’re still on course or have wandered into the financial wilderness.
  • Adjust to Changes: Life happens! Job changes, unexpected expenses, or even windfalls can significantly impact your financial plans. A mid-year check-up allows you to adapt your strategies to your current situation.
  • Boost Your Confidence: Knowing where you stand financially can give you peace of mind and the confidence to make informed decisions for the rest of the year.

How to Conduct a Mid-Year Financial Check-Up

  • Review Your Financial Goals:
    • Personal Goals: Take a look at your savings, debt repayment, and investment goals. Are you on track to meet them by year-end? If not, it’s time to tweak your approach.
    • Business Goals: For entrepreneurs, review your business’s financial health. Are your revenue targets within reach? How are your expenses tracking?
  • Evaluate Your Budget:
    • Compare your actual spending against your budget. Are there areas where you’re consistently overspending or understanding? This insight can help you reallocate funds to align better with your goals.
  • Assess Your Savings:
    • Check your emergency fund, retirement accounts, and any other savings goals. Have you saved as much as you planned? If not, consider automating your savings to stay disciplined.
  • Debt Check-In:
    • Review your debt repayment progress. Are you on track to pay off high-interest debt? If you’ve taken on new debt, how is it impacting your overall financial picture?
  • Investment Performace:
    • Look at your investment portfolio. Are your investments performing as expected? If not, it might be time to rebalance your portfolio or consult with a financial advisor.

Tips for Adjusting Strategies Mid-Year

  • Revisit Your Priorities:
    • Sometimes, our goals change. Maybe that dream vacation fund is less critical now than boosting your retirement savings. Adjust your priorities and redirect your financial resources accordingly.
  • Cut Unnecessary Expenses:
    • Identify any recurring expenses that no longer serve you. Cancel those unused subscriptions and direct that money towards more meaningful goals.
  • Boost Your Income:
    • Consider ways to increase your income. This could be asking for a raise, taking on freelance work, or starting a side hustle.
  • Update Your Financial Plan:
    • Life evolves, and so should your financial plan. Make any necessary adjustments to ensure it still aligns with your long-term objectives.

Benefits of a Mid-Year Review

  • For Personal Finances:
    • Clarity and Direction: A mid-year review provides a clear snapshot of your financial health and helps you stay focused on your goals.
    • Proactive Adjustments: By identifying issues early, you can make proactive adjustments rather than reactive fixes.
  • For Business Finances:
    • Strategic Planning: Regular reviews help business owners make informed decisions, plan for the future, and stay agile in a changing market.
    • Improved Cash Flow Management: By evaluating income and expenses, you can better manage cash flow and ensure your business remains financially healthy.

Why Choose RWM Financial Group?

At RWM Financial Group, we understand the importance of a solid financial foundation. As a SmartVestor Pro with Dave Ramsey, we are committed to providing trusted financial advice and guidance. Our team of experts is here to help you navigate your mid-year financial check-up with confidence. Whether you’re reviewing personal goals or assessing your business finances, we’ve got you covered with the expertise you need to make informed decisions.

So, let’s raise a glass (or a calculator) to the mid-year mark! Conducting a financial check-up now can set you up for a stronger, more secure finish to the year. Remember, it’s not about perfection but progress. Here’s to making the second half of the year even better than the first!

Happy Reviewing!

Powerful 529 Plan Benefits

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When it comes to saving for education, 529 plans are one of the most versatile and powerful tools available. These tax-advantaged accounts offer a range of benefits that can help you support your child’s educational journey from kindergarten through college and beyond. Here are some key features of 529 plans that make them an excellent choice for forward -thinking families.

More Than Just Tuition

529 plan assets are incredibly versatile. While many people know that these funds can cover tuition and books, they can also be used for essential modern educational tools like computers and internet access. This makes 529 plans adaptable to the evolving needs of education in the digital age.

Not Just for College

One of the lesser-known benefits of 529 plans is their applicability to K-12 education. You can use up to $10,000 per year per student for tuition at private schools, providing significant support for your child’s education well before they reach college.

Support for Apprenticeships and Debt Repayment

Beyond traditional educational expenses, 529 plans also support registered apprenticeship programs. This means your investment can help your child gain valuable skills in trades. Additionally, these funds can be used to repay up to $10,000 in student loans, making it a versatile tool for managing education-related debt.

Early Bird Gets the Worm

Starting early with a 529 plan can make a huge difference. The longer your money has to grow, the more substantial your savings will be when your child is ready for college. Compounding interest over the years can significantly boost the amount available for educational expenses.

Flexibility with Funds

The flexibility of 529 plans extends beyond tuition. You can use these savings for a variety of qualified education expenses, including room and board, books, and even computers. This ensures that your child’s comprehensive educational needs are met.

State Tax Deductions

Depending on your state, contributions to a 529 plan might qualify for state tax deductions or credits. This can provide immediate tax benefits, making your savings efforts even more rewarding.

Change of Plans? No Problem!

If your child decides not to attend college, 529 plans offer flexibility. You can transfer the account to another eligible family member without penalty, ensuring your savings benefit someone in your family.

Estate Planning Perks

Contributions to a 529 plan are considered completed gifts for tax purposes. This can help reduce the size of your taxable estate, offering a strategic benefit for grandparents who want to support their grandkids’ education while managing their estate.

Control Over Funds

As the account owner, you maintain control over the funds in the 529 plan. You decide when and how the money is used, ensuring it supports your child’s education as you intended.

Low Impact on Financial Aid

529 plans generally have a lower impact on financial aid calculations compared to other savings accounts. This can help maximize the financial aid your child may receive, making higher education more affordable.

Crowdfunding Education

Some 529 plans offer gifting options, allowing friends and family to contribute directly to your child’s college savings. This feature makes it easier to involve loved ones in funding your child’s future, harnessing the power of community support.

Potential for Growth

Investing in a 529 plan offers the potential for your savings to grow over time through a variety of investment options. Whether you prefer conservative or aggressive portfolios, you can tailor your investment strategy to match your risk tolerance and financial goals.

Peace of Mind

Having a dedicated plan for your child’s education expenses can greatly reduce financial stress. Knowing that you have a strategy in place, combined with the tax advantages of 529 plans, can provide peace of mind and confidence in your financial planning.

529 plans are more than just a savings account; they are a comprehensive tool designed to support educational aspirations and financial stability. Whether you’re planning for the immediate future or long-term goals, these plans offer flexibility, growth potential, and significant tax benefits. Start exploring 529 plans today to secure a brighter future for your child.

Prior to investing in a 529 Plan investors should consider whether the investor’s or designated beneficiary’s home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protections from creditors that are only available for investments in such state’s qualified tuition program. Withdrawals used for qualified expenses are federally tax free. Tax treatment at the state level may vary. Please consult with your tax advisor before investing.

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

Tribal Trust Management Guide

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In many Native American communities, tribal trusts play a crucial role in providing essential benefits such as healthcare, education, and housing to tribal members. These trusts are typically overseen by employers who bear the fiduciary duty of acting in the best interests of plan participants. However, managing tribal trusts can be intricate due to their unique legal and regulatory landscape. This article aims to provide employers and plan participants with a comprehensive guide on effectively managing tribal trusts.

Understanding Tribal Trusts

Tribal trusts represent specialized forms of trusts established by Native American tribes to benefit their members. Governed by federal law, these trusts are subject to distinct legal and regulatory stipulations. They encompass various types, including land and resource trusts, education trusts, and health and welfare trusts, all administered by tribal governments with federal agency oversight. Compliance with specific legal and procedural requirements, including consultation with affected parties and adherence to relevant laws and regulations, is paramount for the creation and administration of tribal trusts.

Roles in Tribal Trust Management: Employers and Participants

Both employers and plan participants shoulder crucial responsibilities in managing tribal trusts. Employers are tasked with ensuring compliance with legal and regulatory mandates, monitoring trust performance, and furnishing plan participants with pertinent information. Clear communication channels between employers and plan participants are essential to ensure awareness of available benefits and comprehension of trust operations. Plan participants, on the other hand, must comprehend the benefits accessible to them, maintain up-to-date contact and beneficiary details, and promptly report any alterations in circumstances affecting benefit eligibility. Open communication with employers or trust administrators regarding queries or concerns is encouraged.

Managing Tribal Trusts: Best Practices

Understand Your Fiduciary Responsibility

Employers overseeing 401(k) plans bear the fiduciary duty to act in the best interests of participants, necessitating careful selection and monitoring of investment options, reasonable fee management, and provision of accurate plan information.

Select Appropriate Investment Options

Employers must meticulously choose investment options, considering participants’ risk profiles and ensuring a suitable mix of investments. Regular performance reviews and adjustments are advisable.

Monitor Fees and Expenses

Employers should ensure the reasonableness of fees associated with 401(k) plans, negotiating lower fees when possible and providing transparent fee information to participants.

Provide Participant Education and Communication

Clear and accurate information regarding 401(k) plans, including investment options, fees, and regulations, should be imparted to participants, supplemented by regular educational initiatives to aid informed decision-making.

Monitor Plan Performance

Regular scrutiny of plan performance, coupled with participant feedback assessment, enables employers to make necessary adjustments to meet participants’ needs effectively.

Encourage Participation

Initiatives such as employer contributions, automatic enrollment, and communication campaigns are instrumental in promoting plan participation, ensuring participants are adequately prepared for retirement.

Challenges in Managing Tribal Trusts

Managing tribal trusts presents various challenges, encompassing legal and regulatory complexities, communication hurdles, and financial management issues. Addressing these challenges requires proactive collaboration among employers, plan participants, and trust administrators to identify and mitigate potential issues effectively.

In conclusion, effective management of tribal trusts demands a deep understanding of legal and regulatory frameworks, diligent oversight, transparent communication, and proactive engagement from all stakeholders. At RWM Financial Group, we are dedicated to supporting tribal sovereignty and assisting tribes in achieving their financial objectives through a comprehensive suite of services tailored to their unique needs.

Learn More About Our Tribal Services

At RWM Financial Group, we are committed to upholding independence, excellence, and supporting tribal sovereignty to help achieve your tribe’s financial goals. Our extensive range of services include but are not limited to:

  • Tribal Council Retirement Plans, 401(k) Investment Management (both ERISA and Non-ERISA)
  • Children’s Trust Investment Management
  • Fiduciary Investment Management, Discretionary and Non-Discretionary Investment Management
  • Investment Monitoring
  • And,  Detailed Reporting

We also provide services such as Investment Committee Education, Tribal Member Financial Education, Third-Party Administrator assistance and Provider Liaison, 401(k) Provider Request for Proposal, Participant Education, and Financial Wellness Program, Onsite Meetings, and Retirement Plan Enrollment Assistance. Our team is dedicated to providing exceptional service and building long-lasting relationships with our clients.

The purpose of RWM Financial Group is to promote plan success via our knowledgeable team and a robust set of tools. By working with us, you can help put your employees on the path working toward a secure retirement. Learn more about our services, here.

This information was developed as a general guide to educate plan sponsors, but is not intended as authoritative guidance or tax or legal advice.  Each plan has unique requirements, and you should consult your attorney or tax advisor for guidance on your specific situation.  In no way does advisor assure that, by using the information provided, plan sponsor will be in compliance with ERISA regulations.

Fiduciary Tips from RWM Financial Group

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In the world of financial advice, discovering reliable guidance can seem as challenging as finding a needle in a haystack. Amidst a myriad of conflicting opinions and concealed motivations, individuals often feel overwhelmed and uncertain. However, there’s a beacon of integrity in this chaos: fiduciary responsibility.

At RWM Financial Group, we hold ourselves to the highest standard of fiduciary duty, prioritizing the interests of our clients above all else. We believe that financial success is built on a foundation of trust, transparency, and expert guidance. As part of our commitment to empowering individuals with the knowledge they need to make informed decisions, we’re excited to share some valuable fiduciary tips to help you navigate the complexities of personal finance.

Tip 1: Choose Your Advisor Wisely

When it comes to selecting a financial advisor, not all are created equal. It’s crucial to choose an advisor who is held to a fiduciary standard, meaning they are legally obligated to always act in your best interests. This ensures that their advice is unbiased and free from conflicts of interest. Before entrusting someone with your financial future, be sure to ask if they are a fiduciary and inquire about their qualifications, experience, and approach to financial planning.

Tip 2: Understand Fees and Compensation Structures

Transparent fee structures are a hallmark of fiduciary advisors. Before engaging the services of a financial advisor, make sure you clearly understand how they are compensated. Fiduciaries typically charge fees based on a percentage of assets under management or a flat fee for financial planning services. Beware of advisors who earn commissions or receive kickbacks for selling specific products, as these incentives may influence their recommendations.

Tip 3: Establish Clear Goals and Objectives

Successful financial planning begins with a clear understanding of your goals and objectives. Whether you’re saving for retirement, planning for your children’s education, or building wealth for the future, articulating your priorities is essential. A fiduciary advisor can help you define your goals, develop a customized financial plan, and provide ongoing guidance to keep you on track.

Tip 4: Diversify Your Investments

Diversification is a cornerstone of sound investment strategy. By spreading your investments across a variety of asset classes, sectors, and geographic regions, you can help mitigate risk and improve your chances of achieving long-term returns. A fiduciary advisor can help you construct a diversified portfolio tailored to your risk tolerance, time horizon, and financial goals.

Tip 5: Stay Informed and Engaged

Financial planning is not a one-and-done activity but an ongoing process requiring regular review and adjustment. Stay informed about changes in the market, tax laws, and economic trends that may impact your financial situation. Schedule regular check-ins with your fiduciary advisor to review your progress, reassess your goals, and make any necessary course corrections.

Conclusion

Navigating the complexities of personal finance can be daunting, but with the guidance of a valued fiduciary advisor, it’s entirely achievable. At RWM Financial Group, we’re dedicated to helping our clients achieve their financial goals with integrity, transparency, and expertise. By following these fiduciary tips and partnering with a fiduciary advisor, you can take control of your financial future and unlock new opportunities for success. Contact us today to learn more about how we can help you on your journey to economic well-being.

This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal or investment advice. If you are seeking investment advice specific to your needs, such advice services must be obtained on your own separate from this educational material.

Charting Your Financial Journey with RWM Financial Group as Your SmartVestor Pro Partner

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Embarking on a financial journey can often feel like setting sail on vast, uncharted waters. With so many decisions to make and potential storms to weather, having a seasoned navigator by your side can make all the difference. This is where the concept of a SmartVestor Pro comes into the picture, and RWM Financial Group has stepped up as a valued partner in capacity. Let’s delve into what this partnership means for you and how RWM Financial Group can be the compass you need.

Who is a SmartVestor Pro?

SmartVestor Pros are confidants and strategists who listen to what matters to you. They can help you understand investing options like mutual funds, IRAs, 401(k), and 529 College savings accounts. They believe are in alignment with Dave Ramsey’s core financial principles. These include the belief that eliminating debt and investing with a long-term perspective is the surest path to financial independence. RWM Financial Group, as a SmartVestor Pro, embodies this philosophy, offering guidance rooted in these foundational beliefs.

They advocate for Dave Ramsey’s teachings but also practice them in their financial advising. This ensures that when you partner with a SmartVestor Pro like RWM Financial Group, you’re getting advice from someone who genuinely walks the walk, ready to guide you toward financial freedom.

Why Choose RWM Financial Group as Your SmartVestor Pro?

In the vast sea of financial advisors, distinguishing those who genuinely have your best interests at heart can be daunting. RWM Financial Group stands out in this crowd, committed to being a partner you can rely on, value, and feel comfortable with as you share your financial goals and concerns.

Save You Time

Picture this: no more late-night scrolls through financial news or worrying about market swings. With RWM as your SmartVestor Pro, you can kick back and relax, knowing that we’re diligently keeping an eye on things for you. Your time is valuable, and we’re here to help you reclaim it.

Teach You

Investing can feel overwhelming, but you don’t have to go it alone. Think of us as your friendly guides through the maze of financial jargon and market trends. We’ll break things down in a way that’s easy to understand and empower you to make informed decisions about your money.

Think Big Picture

Life is full of ups and downs, and the market is no different. When things get rocky, we’ll be your steady hand, helping you see the forest for the trees. Together, we’ll focus on your long-term goals and navigate through market changes with grace and perspective.

Embarking on Your Financial Journey with RWM Financial Group

Choosing RWM Financial Group as your SmartVestor Pro means embarking on a financial journey with a partner equipped to navigate the complexities of financial planning. They understand the importance of each decision you make and are committed to guiding you through each step, ensuring a journey that’s not only successful but also true to your values and goals.

Whether you’re taking your first steps towards financial independence or looking to navigate more complex financial challenges, RWM Financial Group, as a SmartVestor Pro, is ready to be your ally. Their expertise, aligned with the trusted principles of Dave Ramsey’s teachings, ensures you have a knowledgeable and dedicated guide by your side.

As you set sail on your financial adventure, consider the difference a dedicated partner like RWM Financial Group can make. With them, you’re not just charting a course to financial success; you’re laying the foundation for a future where your financial dreams can become reality. Contact RWM Financial Group

The SmartVestor program is a directory of investment professionals.  Neither Dave Ramsey nor SmartVestor are affiliates of RWM Financial Group or LPL Financial.

Writing Your Company’s Retirement Plan Goals

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Guess what? Your company’s retirement plan is like a superhero cape for your organization’s goals. But hold up, before you dive into the superhero action, let’s figure out what you really want to achieve.

So, you know how employers sometimes feel a bit lost when setting up those retirement plan goals? Well, no worries! We’re here to change that and lead your team on a path towards a retirement that screams confidence.

Ready for some questions?

What’s the grand goal of your company’s retirement plan?

Your company’s retirement plan isn’t just a financial tool; it’s the cornerstone of your employees’ future. Are you aiming for financial security, early retirement options, or perhaps a plan that fosters a strong company culture? Clarifying these goals ensures your plan aligns with your company’s vision and the well-being of your team.

How are you handling those fiduciary responsibilities?

Fiduciary responsibilities aren’t just a checkbox; they’re a commitment to your employees’ trust. Beyond legal obligations, it’s about ensuring your investment decisions, communication strategies, and plan management prioritize the best interests of your workforce. Regular assessments guarantee you’re not just meeting requirements but exceeding them.

Are your plan fees playing fair?

Uncover the true cost of your retirement plan. Beyond the surface, scrutinize fees, and explore whether there are more cost-effective options. This not only saves money for both the company and employees but also enhances the overall value of your retirement offering.

And hey, what about the latest legislation – how’s that affecting your retirement game?

The retirement landscape is ever-evolving, influenced by legislative changes. Stay ahead by understanding how new laws impact your plan. This knowledge not only ensures compliance but opens opportunities to optimize your strategy and keep your plan in sync with the latest regulations.

Any room for improvements in the plan design?

Don’t settle for the status quo. Explore innovative plan designs that could potentially enhance outcomes for your employees. From investment options to contribution structures, a proactive approach to design ensures your plan evolves with the needs of your workforce, fostering financial wellness.

Conclusion: Don’t let your company’s retirement plan wander.

Now armed with a more profound understanding of your goals, fiduciary responsibilities, fees, legislative impacts, and potential design enhancements, it’s time to take charge. Set a clear direction, map out a strategy, and ensure your company’s retirement plan isn’t just a benefit but a dynamic force propelling your team toward a secure and confident future.

And guess what? We’ve got your back every step of the way. Reach out to us today, and let’s give your retirement plan a well-deserved checkup. Your company’s retirement plan isn’t just a plan-it’s a journey, and RWM Financial Group is here to make it a remarkable one. Contact RWM Financial Group

This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal or investment advice. If you are seeking investment advice specific to your needs, such advice services must be obtained on your own separate from this educational material.

Unlocking Financial Opportunities: The Art of 529-to-Roth Rollovers Explained by RWM Financial Group

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Hey there, savvy savers! Ready to dive into the nitty-gritty of 529-to-Roth IRA rollovers? The SECURE 2.0 Act has opened up a whole new avenue to shuffle around those unused 529 funds for the benefit of your loved ones’ retirement. Let’s break it down, RWM-style.

So, picture this: you’ve been stashing away in a 529 account, dreaming of a bright college future for your kiddos. Fast forward to the SECURE 2.0 Act, and now you’re thinking, “What if I could turn these leftovers into a retirement nest egg?” Well, guess what? You can!

Starting this year, 2024, the new provision allows you to roll over unused 529 assets (up to $35,000) into the beneficiary’s Roth IRA without facing the dreaded 10% penalty or stirring up any taxable income drama. Great news, right? Especially for those of us wondering what to do with excess 529 funds just hanging around like a third wheel at a party.

But hold up! Before you start envisioning your money making its way to Roth paradise, Brahm Rossiter, our Chief Investment Officer at RWM Financial Group, puts it into perspective. “Transforming unused 529 funds into Roth savings is not just a financial move; it’s a strategic journey towards securing a brighter future. At RWM Financial Group, we believe in empowering individuals to make informed choices that pave the way for financial freedom and generational wealth.

Now, let’s talk limits. You can’t just waltz into 529-town, grab $35,000, and sashay into a Roth party. There are rules, dear friend:

Holding Periods

Your 529 needs to have clocked at least 15 years before the rollover dance begins. No shortcuts allowed! Contributions from the last five years before distributions? Sorry, they’re not invited to this tax-free rollover fiesta.

Annual Limits

Your rollover can’t outshine the annual Roth contribution limit, which is currently $6,500, in 2023. So, if you’re eyeing that $ 35,000 lifetime limit, you’ll be doing it over six years – unless the Roth contribution limit does a little cha-cha upwards in the future.

Ownership

The beneficiary of the 529 must be the proud owner of the Roth IRA and must have earned income equal to the rollover amount. Fair’s fair!

Now, here’s where it gets a bit tricky. These are the rules according to the legislation. The IRS might throw in a plot twist during implementation, and some details are still up in the air. For example, can you switch 529 beneficiaries before a rollover, or does that trigger a brand new 15-year holding period? And who’s footing the bill if things go south? Uncertainty alert!

But fear not! If you’re eyeing this new provision with a hopeful gleam, here’s a checklist to chat about with your planning professional:

Hold Your Horses

If you’ve got a 529 plan, no need to make a move just yet. 2024 is the starting gun, and we’re still waiting for the final rules. Patience is key.

Kiddo’s 529 Game Plan

If you’re thinking of making yourself the beneficiary ninja to sidestep Roth IRA contribution rules, hold on. Let’s wait for the lowdown on the lifetime contribution amount and that 15-year holding period.

Roth IRA for the Win: 9 Game Plan

Regardless of the IRS dance, consider opening a Roth IRA for the beneficiary. Get those retirement savings going when the tax rates are friendly and efficient!

Backup Plans

Got an overfunded 529? Fear not! Switch beneficiaries, use it for educational purposes, tackle student loans, or tap into it for a tax-free scholarship – plenty of options on the table.

In a nutshell, this new 529-to-Roth rollover is like your financial safety net, not the main event. So, keep it in your back pocket, chat with your planning pro, and let’s navigate this new terrain together! Contact RWM Financial Group

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

Navigating the 401(k) Adventure: A Friendly Guide to Fiduciary Best Practices with RWM Financial Group

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Hey there, savvy decision-makers at RWM Financial Group! Let’s chat about the nitty-gritty of your 401(k) game plan and why keeping an eye on those investments is a big deal. We get it, steering through the fiduciary responsibility maze can be a bit overwhelming, but fear not – we’re here to guide you with a friendly chat and a sprinkle of expertise.

So, you’ve got this investment committee, right? They’ve got their hands full selecting and keeping tabs on the investment options for the retirement plan. No pressure, but it’s a crucial task. But guess what? You’re not alone! There’s a buffet of resources out there to help you make those informed decisions without breaking a sweat.

Why bother, you ask? Well, staying proactive and clued up on these matters can be your secret weapon against potential legal headaches. Nobody wants to be tangled up in lawsuits about excessive fees or ERISA violations. Trust us, it’s not a fun ride.

Your Fiduciary Responsibilities

Let’s dive into the fiduciary responsibilities for a moment. As a fiduciary, you, the plan sponsor/employer, have a duty to act solely in the best interest of the participants. The Department of Labor says, “Hey, be prudent, diversify those investments, and keep the risk of big losses in check.”

Now, we know it’s a complex dance, and that’s why you might want some dance partners. Cue the 3(21) and 3(38) advisors. The 3(21) buddy is like your co-pilot – offering counsel and guidance without taking the wheel. On the flip side, the 3(38) advisor takes full control of the investment decisions, letting you sit back and relax.

Investment Policy Statement

Let’s not forget the Investment Policy Statement (IPS) – think of it as your GPS for the plan’s investments. It’s your roadmap, ensuring the plan’s goals align with its investment approach. Plus, it’s the committee’s handy tool for evaluating the retirement plan’s performance.

Evaluate, Benchmark, and Assess

Now, when it comes to evaluating, benchmarking, and assessing – it’s like giving your plan a health check. Are those goals outlined in the IPS being met? Is the fee structure reasonable? Time to compare your plan to the cool kids in the market to see how it measures up.

Oh, and setting up a 401(k) plan? We get it, the U.S. tax system can feel like a rollercoaster. But fear not! With the right help, even the smallest business can confidently rock a 401(k) plan. Automation is the name of the game, and a financial professional specializing in these plans can be your sidekick.

What is Fiduciary Liability Insurance?

Let’s talk about fiduciary liability insurance – your plan’s superhero cape. It’s not required, but it’s a smart move. This insurance provides legal protection if someone claims a fiduciary duty breach or mismanagement of the retirement plan. No capes against fraud, though – that’s where the ERISA fidelity bond steps in.

Fiduciary Oversight, Financial Integrity

So, my friends at RWM Financial Group, overseeing a retirement plan is a big deal, but with the right squad of fiduciary experts, including those 3(21) or 3(38) advisors, you’ll be cruising smoothly. A well-managed plan and investment strategy? That’s your ticket to an optimized plan and happy employees reaching their retirement goals.

Contact RWM Need a hand in the 401(k) adventure? Drop us a line! We’re here to answer all your burning questions and help you navigate those fiduciary responsibilities like seasoned pros. Cheers to financial well-being!

This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal or investment advice. If you are seeking investment advice specific to your needs, such advice services must be obtained on your own separate from this educational material.

Why Sponsor a 401(k) Plan for Small Business?

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5 Good Reasons To Set Up A 401(k) Plan Even if Your Company is Small

The 401(k) plan is a favorite retirement savings vehicle for Americans. It is estimated that 52% of working Americans work for a company that offers a 401(k) or similar plan. But, while more than 67% of very large companies offer  a plan, just 26% of America’s small business owners offer a 401(k) plan and 74% do not offer any form of retirement benefits. Owners of small businesses may incorrectly assume that 401(k) plans just won’t work for them.  Here’s the reality.1

#1: 401(k) plans make it easier to compete for and keep talent.

Seventy-seven percent of employers believe that offering a 401(k) or similar plan is important for attracting and retaining employees. However, some may be underestimating their importance — fully 81% of workers agree that retirement benefits offered by a prospective employer will be a major factor in their final decision-making when job hunting.

#2: A 401(k) can help owners save for their own retirement

Business owners sometimes hope to fund their own retirement through business profits or the future sale of their business. They may sacrifice personal retirement savings in favor of plowing money back into the business. When the company provides a 401(k) plan for employees, owners may be more likely to contribute on their own behalf, too. The savings in the plan can help the business owner’s ability to retire, even if the company itself does not survive.2

#3: 401(k) plans save the company on taxes. 

A key provision of SECURE Act 2.0, passed in December 2022, allows employers with 1-50 employees to claim a credit of up to 100% of start-up costs for the first three years after adopting a new plan.3 This credit is capped at $5,000 per employer annually (total of $15,000  for the three years). A 50% credit from the SECURE Act of 2019 remains for those businesses with 51-100 employees. There is also an additional tax credit for five years of up to $1,000 per employee equal to the applicable % of eligible employer contributions. This tax credit does not apply to defined benefit plans and there is an exception for employees with wages in excess of $100,000. You may also enjoy a reduction in payroll taxes if employees are taking advantage of the plan — which is a great reason to educate them about its benefits.

#4: Plans are easy to set up and operate…with the right help

401(k) plans are available by virtue of an extremely complex U.S. tax system. It makes sense to feel a little intimidated, especially when you have a business to run. Today, there is a lot of help available to make it possible for even the smallest business to confidently establish and operate a 401(k) plan. The administration can be fully automated, and you can select a financial professional who specializes in these plans to help make sure it benefits employees and the company, within the bounds of all applicable laws.

#5: 401(k) plans help employees retire on time.

Their workplace 401(k) plan may provide an opportunity for employees to connect with a financial professional; for many, this is their only such contact. Along with the plan, contact with a financial professional may help employees gain confidence in their ability to retire. And that is important for at least two reasons. 1) Employees who know they will have enough money to retire are more likely to leave the workforce on time. Thus, they make room for the next generation of employees rather than remaining on the job solely for the paycheck. And 2) employees who are worried about finances are often less productive, less healthy, and more expensive for your other benefits.4

  1. Source: Plansponsor.com ↩︎
  2. https://transamericacenter.org/docs/default-source/retirement-survey-of-employers/tcrs2019_srr_employer_survey_retirment_security_challenge.pdf ↩︎
  3. https://www.irs.gov/retirement-plans-plan-participant-employee/retirement-savings-contributions-savers-credit ↩︎
  4. Source: 401kSpecialist Magazine, 2022. ↩︎

Contact RWM If you haven’t yet established a 401(k) plan, take some time to learn more about the ways it may help you grow your business and work towards your future – and those of your employees. RWM Financial Group would be happy to share more insights.

This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal or investment advice. If you are seeking investment advice specific to your needs, such advice services must be obtained on your own separate from this educational material.

RP-0393-0323  Tracking #1-05365579 (Exp. 03/25)

Big Birthdays After 50 – And Why They Matter

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So, you know how kids hit that age where they proudly declare they’re “eleven and a half” or some such? Well, guess what? Once you’re past the big 5-0, those half-birthday vibes start making a comeback. And here’s the twist – these birthdays and “half-birthdays” are not just about adding candles to your cake. Nope, they can seriously shake things up when it comes to your retirement game plan.

Age 50

Alright, let’s kick things off at the big 5-0. If you’re part of certain retirement plans, this is your cue to start making those annual catch-up contributions. Picture this: if you’re rocking a 401(k), 403(b), or 457 plan, you can throw in an extra $7,500 per year in 2024. Got a Simple IRA or Simple 401(k)? You’re looking at a cool $3,500 catch-up contribution. And don’t forget the traditional or Roth IRAs – you can stash away an extra grand annually. Sweet, right?

Age 59½

Now, we’re talking about the age where you can start dipping into your retirement plans without Uncle Sam slapping you with a 10% penalty. Say hello to withdrawals from your IRAs and employer-sponsored plans like the 401(k) and 403(b). Just a heads-up – traditional IRAs, 401(k)s, and the gang are taxed as ordinary income. But hey, no penalties? That’s a win.

Age 62 

So, 62 is the magic number to start cashing in on those Social Security retirement benefits. But hold up – if you’re still grinding away at work, your benefits take a hit. The deal is, they deduct a buck for every two you earn over the annual limit, which is $22,320 in 2024. It’s like Social Security’s way of saying, “We got you, but not all the way.”

Age 65

Hit 65, and guess what’s on the table? Medicare. The folks at Social Security suggest you get on it three months before the big day. Oh, and if you’re already soaking up those Social Security benefits, you’re in for automatic enrollment in Medicare Part A and Part B. No extra paperwork – sounds good to us!

Age 65 to 67

Now, here’s the scoop between 65 and 67. This is when you can start cashing in on the full 100% of your Social Security benefits. But here’s the kicker: the exact age depends on when you blew out your birthday candles. Born in ’55? Full benefits at 66 years and 2 months. Born in ’60 or later? Hold on tight till you hit 67.

Age 73

Fast forward to 73, and it’s time to start taking those required minimum distributions from your traditional IRA and other plans. And get this – you can still contribute to that traditional IRA past 70½, as long as you’re bringing in the bacon.

So, why does all this matter? Well, understanding these milestone birthdays is like having a secret map to navigate your retirement. It’s not just about celebrating another trip around the sun; it’s about making sure you’re on top of things and dodging those pesky penalties. Cheers to knowing when to blow out the candles and when to cash in on the perks! 🎉

As you embark on this next chapter, let RWM Financial Group be your co-pilot. When it comes to preserving your financial future, having a knowledgeable guide makes all the difference.

Contributions to a traditional IRA may be tax deductible in the contribution year, with current income tax due at withdrawal. Withdrawals prior to age 59 ½ may result in a 10% IRS penalty tax in addition to current income tax.

This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal or investment advice. If you are seeking investment advice specific to your needs, such advice services must be obtained on your own, separate from this educational material.