Top 5 Things to Consider in Retirement

For many people, retirement feels like the finish line but in reality, it’s the start of a whole new chapter. Whether you’re just a few years away or already in your first years of retirement, the decisions you make now can shape your lifestyle for decades.

Here are five key areas to consider as you plan for a secure and fulfilling retirement:

1. Income Sources - Building Your Retirement Paycheck

The biggest shift in retirement is moving from earning a paycheck to creating one. Most people rely on a mix of income sources:

• Social Security provides a foundation, but the timing of when you claim can significantly impact your benefit. For example, claiming at 62 could reduce your monthly benefit by up to 30%, while waiting until age 70 increases it.

• Pensions (if you have one) often offer options like a lump sum or monthly payment — each with pros and cons depending on your needs and life expectancy.

• Personal savings and investments fill the gap, whether from a 401(k), IRA, or taxable accounts.

The key is coordinating these income streams so you know how much is coming in and when. Think of it as building your own retirement “paycheck.”

2. Spending Needs - Creating a Realistic Budget

Your expenses in retirement will likely look different than they did while working, but they won’t go away. Some retirees see costs drop, while others discover new expenses.

Common categories include:

• Healthcare - Medicare doesn't cover everything, and premiums, prescriptions, or long-term care can add up.

• Travel and Leisure - Many people want to take that big trip or pursue hobbies they never had time for.

• Housing - Downsizing or relocating can lower costs, but property taxes and maintenance may still be significant.

• Everyday Living: Groceries, utilities, insurance, and transportation remain steady expenses.

A good rule of thumb is to plan for 70–80% of your pre-retirement income to maintain your lifestyle. Tracking your spending for a few months before retiring can help you set realistic expectations

3. Investment Strategy - Balancing Growth and Protection

Retirement doesn’t mean you stop investing. In fact, your money may need to last 25–30 years or more. The challenge is finding the right balance between growth and safety:

• Growth Investments - (like stocks) help protect against inflation so your money keeps its buying power.

• Stability Investments - (like bonds or CDs) provide predictable income and reduce volatility.

For example, a retiree with a $1 million portfolio who leaves everything in cash risks losing purchasing power over time. On the other hand, someone who invests too aggressively could face steep losses during a market downturn. The sweet spot is usually a diversified mix that matches your risk tolerance and spending needs.

Taxes - Making Your Money Last Longer

Taxes in retirement can be more complicated than many expect. Withdrawals from traditional IRAs or 401(k)s are taxed as ordinary income, while Roth accounts provide tax-free withdrawals. Social Security benefits may also be taxable depending on your income.

One strategy is to be intentional about which accounts you draw from first. For example:

• Using taxable accounts early may allow your retirement accounts to grow longer.

• Roth conversions before age 73 can reduce future required minimum distributions (RMDs).

Smart tax planning can stretch your retirement savings and help avoid unpleasant surprises come April 15th.

5. Legacy and Long-Term Care - Planning Beyond Yourself

Finally, think about what happens beyond your day-to-day needs. Two areas are especially important:

• Long Term Care: Nearly 70% of retirees will need some form of care at some point. Options include self-funding, long-term care insurance, or hybrid life insurance policies that include care benefits.

Estates and Legacy Planning: Do you want to leave assets to children, grandchildren, or a favorite charity? Having a will, powers of attorney, and beneficiary designations up to date ensures your wishes are carried out smoothly.

Even small steps, like organizing your accounts and documents, can make things much easier for loved ones later on.

Final Thoughts

Retirement isn’t just about reaching a financial number — it’s about having confidence in your plan and clarity in how you’ll spend your time and resources. By carefully considering your income, spending, investments, taxes, and legacy, you can set yourself up for a retirement that’s not only secure but deeply fulfilling.

Every situation is unique, and what works for one person may not fit another. Talking to a financial advisor can help you sort through your options and design a plan that works best for you.

Scott Higgins | AIF ®, CFP®, CPFA®, NSSA®

Financial Advisor

Securities and Investment Advisory Services Offered Through M Holdings Securities, Inc., a Registered Broker/Dealer and Investment Adviser, Member FINRA/SIPC. Rose Street Advisors is independently owned and operated. #4786058

401(k) Plan Design Tweaks That Can Drive Big Results

As a retirement plan sponsor, you have a powerful role in shaping how well your employees prepare for retirement. The good news? You don’t have to reinvent your 401(k) plan to make a meaningful impact. Sometimes, small design tweaks can drive big results both for your employees’ financial futures and your plan’s overall success.

Here are four proven strategies worth considering:

1. Auto-Enrollment: Helping Employees Get Started

One of the biggest hurdles employees face is simply getting started. Auto-enrollment helps solve this by automatically enrolling eligible employees into the plan unless they choose to opt out.

Why it works:

• Removes inertia. Many employees intend to save but never get around to it.

• Boosts participation. Plans with auto-enrollment often see participation rates jump by 20-30%.

• Supports retirement readiness. The earlier employees start, the more time compounding can work in their favor.

Pro-Tip: Set a default contribution rate high enough to make an impact. While 3% is common, many employers are now starting at 6% or more.

2. Auto-Escalation: Turning Small Starts Into Big Savings

Getting employees into the plan is step one, but helping them build up to meaningful savings levels is step two. That’s where auto-escalation comes in.

How it works:

• Employees are automatically enrolled in annual contribution increases (for example, 1% each year) until they reach a preset cap, such as 10% or 15%.

• The increases are small enough that employees barely notice, but powerful enough to grow balances significantly over time.

Auto-escalation can be the difference between employees retiring on schedule or working years longer than they planned.

3. Roth 401(k) Option: Tax Diversification for the Future

Many employees don’t realize that their retirement tax bill could be just as important as the size of their nest egg. Offering a Roth 401(k) option gives them more control.

Why it matters:

• Tax diversification. Roth contributions are made after-tax, so qualified withdrawals in retirement are tax-free.

• Flexibility. Younger employees, who may be in lower tax brackets now, often benefit most from Roth savings.

• Retention tool. More and more workers expect modern retirement plans to include Roth options.

Encouraging employees to consider both pre-tax and Roth contributions helps them balance tax strategies for their future

4. Re-Enrollment: Giving Employees a Fresh Start

Even the best-designed plan can get stale if employees stick with outdated choices. Re-enrollment is a powerful reset.

How it works:

• Employees are automatically moved into the plan's Qualified Default Investment Alternative (QDIA), often a target-date fund, unless they actively opt out or select a different investment.

• This can correct old allocation mistakes, like employees sitting in cash or overly conservative funds.

Re-enrollment helps ensure that participants’ investments align with their retirement goals, not just decisions they made years ago.

Small Tweaks, Big Impact

When it comes to retirement plans, sometimes the smallest adjustments can create the biggest improvements. By adopting tools like auto-enrollment, auto-escalation, Roth options, and re-enrollment, you not only help employees build stronger financial futures, you also strengthen your plan’s performance and demonstrate your commitment as a fiduciary.

Bottom line: These are not just “nice-to-haves.” They are proven levers that can increase participation, improve savings rates, and put employees on track for retirement readiness.

Click HERE to access our Checklist for Plan Sponsors

Scott Higgins | AIF ®, CFP®, CPFA®, NSSA®

Financial Advisor

Beyond the Numbers: Envisioning Your Retirement Lifestyle

When people think about retirement planning, the first question is often, Do I have enough money? While financial readiness is crucial, an equally important, yet often overlooked, aspect is the emotional side of retirement.

What will our days look like? How will you find purpose and fulfillment? Who will you spend your time with? These are questions that can shape your retirement just as much as your savings balance.

The Emotional Side of Retirement

For decades, work has provided structure, social connections, and a sense of purpose. When you retire, that daily rhythm changes. Many retirees experience a honeymoon phase filled with travel and relaxation, but after a while, some feel restless, lonely, or even lost. The key to a fulfilling retirement is planning not just for your finances, but for your life.

1. Purpose and Identify: Who Are You Without Work?

Your career likely provided a sense of accomplishment. In retirement, it's important to replace that with meaningful activities.

Action Steps:

• Explore your passions. What activities have you always wanted to try?

• Volunteer: Giving back can provide a renewed sense of purpose.

• Consider part-time work or consulting. This can keep you engaged while offering flexibility.

2. Social Connections: Who Will You Spend Time With?

Work naturally creates social interactions. Without it, some retirees struggle with loneliness. Studies show that social isolation can impact both mental and physical health.

Action Steps:

• Strengthen existing relationships. Plan regular meetups with friends and family.

• Join groups or clubs. Book clubs, fitness groups, or hobby clubs can help build new connections.

• Stay involved in your community. Places of worship, senior centers, or volunteer organizations can provide a sense of belonging.

3. Health and Wellness: How Will You Stay Active?

Your health is your most valuable asset in retirement. Without the structure of a work schedule, it's easy to fall into a sedentary lifestyle.

Action Steps:

• Create a fitness routine. Walking, yoga, or strength training can keep you active.

• Prioritize prevention care. Schedule regular checkups and screenings.

• Focus on mental wellness. Try meditation, learning new skills, or engaging in activities that keep your brain sharp.

4. Daily Routine: How Will You Structure Your Time?

Without a work schedule, days can feel long or unproductive. Having a sense of structure can make retirement feel more fulfilling.

Action Steps:

• Establish a morning routine. A consistent start to your day sets a positive tone.

• Plan weekly activities. Schedule time for exercise, hobbies, and social outings.

• Set goals. Whether it's reading a certain number of books, learning a new skill, or traveling, having goals keeps life exciting.

Start Envisioning Your Retirement Now

A fulfilling retirement doesn't happen by accident, it requires planning beyond just the numbers. Take some time to reflect:

1. What excites you about retirement?

2. What hobbies or interests do you want to pursue?

3. Who will be part of your daily life?

4. How will you maintain your physical and mental health?

Final Thought: Retirement is a New Beginning

Retirement isn't the end of something, it's the start of a new chapter. By thinking about your life in retirement as much as your finances, you can create a future that is not only financially secure but also deeply fulfilling.

What does your ideal retirement look like? Start shaping it today.

Scott Higgins | AIF ®, CFP®, CPFA®, NSSA®

Financial Advisor

Since 2012 at Rose Street, Scott has been responsible for helping the firm’s individual wealth management clients with income strategies for retirement and consulting with employers with their employee retirement plans. In free time, he enjoys golf, biking, skiing, cooking, and traveling. Fun Fact, Scott has a hobby of filling growlers with coins!

How Plan Sponsors Can Help Employees Retire on Time: Turning Plan Design into Positive Outcomes

As a corporate plan sponsor, your role in your employees’ retirement journey is more significant than you might think. Yes, you’re responsible for managing the mechanics of the plan and meeting fiduciary obligations. But beyond that, you have the opportunity to shape outcomes that deeply affect your employees’ futures. One of the most valuable gifts you can offer is the ability for participants to retire on time, with financial security and dignity.

Yet far too many American workers aren’t on track. According to a recent survey by the Employee Benefit Research Institute (EBRI), only 1 in 5 workers feel “very confident” they will have enough money to live comfortably throughout retirement. The causes are complex—low savings rates, competing financial priorities, and a lack of clear guidance—but the good news is, thoughtful plan design can make a meaningful difference.

In this post, we’ll explore how corporate plan sponsors can use three key strategies to help improve participant outcomes:

• Automatic features (auto-enrollment and auto-escalation)

• Financial wellness programs

• Target date fund alignment

Let’s take a closer look at each—and see how they can move the needle toward better retirement readiness.

1. Auto Features: Participation and Savings on Autopilot

One of the most common roadblocks to retirement saving is inertia. People know they should save, but life gets in the way. Bills are due, kids need clothes, and the retirement plan enrollment form gets pushed to the bottom of the pile.

That’s why auto-enrollment and auto-escalation are such powerful tools. By flipping the default from “opt-in” to “opt-out,” you nudge employees to start saving without relying on them to take the first step.

Real-World Example: Boosting Participation Through Auto-Enrollment

Consider the example of a mid-sized manufacturing firm with 200 employees. Prior to implementing auto-enrollment, only about 58% of eligible employees were participating in the company’s 401(k) plan. Despite regular educational sessions and email campaigns, participation plateaued.

After consulting with their retirement plan advisor, the company introduced auto-enrollment at 3% of pay for all new hires and added auto-escalation of 1% per year, capping at 10%.

The result? Within 12 months, plan participation rose to 91%, with average deferral rates increasing from 4.2% to 6.7%. Not only were more employees saving, but they were saving more.

That’s the power of default settings. They meet employees where they are and guide them toward better decisions without requiring perfect financial discipline.

Best Practices for Auto Features

• Start with at least 6% as the default contribution rate to promote meaningful savings.

• Pair auto-enrollment with auto-escalation to grow savings over time.

• Re-enroll existing employees annually or during life events to boost ongoing participation.

2. Financial Wellness: Helping Employees Solve the Right Problems

Let’s face it, retirement isn’t the only financial concern on your employees’ minds. Many are juggling credit card debt, student loans, rising childcare costs, or simply trying to build an emergency fund.

Financial stress is one of the biggest barriers to retirement saving.

That’s where financial wellness programs come in. These programs provide holistic education and resources to help employees address their broader financial lives from budgeting and debt management to saving for retirement and understanding insurance.

When employees feel more in control of their finances, they’re more likely to participate in retirement plans and contribute consistently.

Ideas for Enhancing Financial Wellness

• Offer financial coaching (virtual or in-person) as part of your benefits package.

• Provide interactive tools and calculators within the retirement platform.

• Partner with your recordkeeper to host on-demand webinars or in-person workshops.

• Measure engagement with these resources and adjust based on feedback.

Tip: If your retirement plan provider offers a financial wellness hub, promote it through onboarding, annual enrollment, and internal communications. Awareness is half the battle.

3. Target Date Funds: One Fund, Many Benefits

Most participants aren’t investment experts and they shouldn’t have to be. That’s why target date funds (TDFs) are the default investment of choice in most corporate retirement plans.

TDFs automatically adjust the mix of stocks and bonds based on the participant’s retirement date. They’re easy to understand, low maintenance, and well-diversified.

But as a plan sponsor, your job isn’t just to offer TDFs. It’s to make sure the ones you offer are aligned with your workforce’s needs.

What to Watch For in TDF Design

• Glidepath philosophy: Is it “to” retirement (becomes conservative at retirement) or “through” retirement (remains growth-oriented after retirement)?

• Workforce demographics: Younger, lower-income employees may need a more growth-oriented TDF to build assets.

• Cost and transparency: Ensure the funds are reasonably priced and clearly disclose fees. .

Regularly review your TDF lineup with your advisor or investment committee. If your population is diverse, you may even consider offering multiple TDF suites or personalized managed accounts.

Putting it All Together: A Culture of Retirement Readiness

Improving participant outcomes doesn't happen by accident, it happens by design.

Here's how you can start moving the dial:

Action	Why It Matters
Implement or raise auto-enrollment	Captures more participants early and eliminates inertia
Add auto-escalation	Encourages long-term savings growth
Introduce financial wellness resources	Helps employees balance competing financial needs
Review and align your TDF lineup	Ensures investment options match participant profiles
Communicate consistently	Reinforces engagement and boosts trust in the plan

Even modest changes, like increasing the default contribution rate or adding a budgeting tool can produce significant long-term benefits for your employees.

And when your people are financially prepared to retire, everyone wins. Employees transition with confidence. Turnover can become more predictable. And your organization earns a reputation as a workplace that truly cares about long-term financial health.

Final Thoughts

As a corporate plan sponsor, you hold the keys to helping your employees retire on time. That’s not just a fiduciary role, it’s a leadership opportunity. By making smart design decisions today, you can unlock better futures for tomorrow.

If you’re ready to assess your plan’s impact on retirement readiness or explore how to implement these strategies, connect with your advisor or provider for a plan review. The right steps now can lead to measurable results and lasting financial clarity for your employees.

Scott Higgins | AIF ®, CFP®, CPFA®, NSSA®

Financial Advisor

Unlocking Financial Security: The Power of Qualified Longevity Annuity Contracts (QLACs)

What is a Qualified Longevity Annuity Contract (QLAC)?

A Qualified Longevity Annuity Contract(QLAC) is a type of deferred annuity funded with money from a qualified retirement plan, such as a 401(k) or an IRA. It's designed to provide a guaranteed stream of income later in life, helping to ensure that you don't outlive your retirement savings.

Top 5 Reasons to Consider a QLAC

1. Guaranteed Income

QLACs provide a steady, predictable income stream for life, offering financial clarity.

2. Tax Deferral

Funds used to purchase a QLAC are exempt from required minimum distribution (RMD) rules until payments begin.

3. Protection Against Longevity Risk

QLACs help mitigate the risk of outliving your savings.

4. Flexibility in Start Date

You can choose when to start receiving payments, typically between 65 and 85.

5. Simplicity

Once set up, QLACs require minimal management, making them easy to maintain.

Drawbacks of QLACs

1. Limited Investment Options

QLACs typically offer fixed returns, which may be lower compared to other investment options.

2. Irrevocability

Once purchased, QLACs cannot be easily modified or canceled.

3. Upfront Costs

There may be fees and charges associated with purchasing a QLAC.

4. Lack of Liquidity

Funds used for a QLAC are not easily accessible until the annuity start date.

5. Inflation Risk

If QLACs do not include inflation adjustments, purchasing power may decrease over time.

Have questions or if this may be right for you, give us a call.

Scott Higgins | AIF ®, CFP®, CPFA®, NSSA®

Financial Advisor

What is a Collective Investment Trust (CIT)? And How it Differs from a Mutual Fund

As a retirement plan sponsor or committee member, you're probably familiar with mutual funds as the go-to investment option in most 401(k) and 403(b) plans. But you may have also come across Collective Investment Trusts, or CITs, and wondered: How are theses different? Are they better? Should we consider them for our plan?

Let's take a closer look at CITs, how they compare to mutual funds, and what you need to know when evaluating them for your retirement plan lineup.

What is a Collective Investment Trust (CIT)?

A Collective Investment Trust (CIT) is a pooled investment vehicle, similar to a mutual fund, that's sponsored by a bank or trust company. but unlike mutual funds, CITs are only available to qualified retirement plans (like 401(k)s, 403(b)s, and certain 457 plans) and not sold to the general public.

Because of this, CITs are regulated by banking authorities, such as the Office of the Comptroller of the Currency (OCC), rather than the SEC.

CITs vs. Mutual Funds: What's the Difference?

Here's a quick side-by-side comparison to help clarify the key differences:

Feature	Mutual Funds	CITs
Who Can Invest?	Anyone (individuals or institutions)	Only qualified retirement plans
Regulated By	SEC	OCC or state banking regulators
Disclosure	Prospectus and public figures	Trust documents and fact sheets (not public)
Ticker Symbol?	Yes – Searchable	Usually no
Pricing	Daily Net Asset Value (NAV)	Also uses daily NAV
Fees	May include SEC and marketing expenses	Typically lower- no 12b-1 or distribution costs
Customization	Limited	Often customized by plan size or ivestment strategy

Why are more plans using CITs?

One word: Cost.

Because CITs aren't required to register with the SEC or engage in public marketing, they often carry lower expense ratios than comparable mutual funds. In fact, it's common for CITs to be managed by the same portfolio managers using the same strategies as a mutual fund, just with reduced overhead.

Real-World Example:

A small-sized 401(k) plan with $5 million in assets was using a target-date mutual fund with an average expense ratio of 0.45%. By switching to the CIT version of the same strategy, they secured a 0.30% expense ratio, savings 15 basis points annually. Over time, those savings can significantly boost participant account balances.

How Do CITs Work Operationally?

While the structure behind the scenes is different, the participation experience is nearly identical to a mutual fund:

• Daily Pricing: CITs are priced once a day, just like mutual funds.

• Statements: CITs appear on participant statements and online portals with clear naming and balances.

• Trading: Transactions (buy/sell) typically follow the same trade cycle as mutual funds.

To most plan participants, CITs look and feel just like mutual funds.

Things to Keep in Mind

CITs have plenty of upside—but also a few nuances you’ll want to consider:

• Transparency: No public prospectus or ticker symbol means you’ll need to rely on provider fact sheets and trust documents for info.

• Education: Because they’re less familiar, you may need to explain to participants what a CIT is and why it’s in the plan.

• Access: Not all recordkeepers or custodians support CITs, and some CITs may have investment minimums.

• Documentation: Be sure to review and retain the participation agreement and declaration of trust for any CITs you offer.

Your Fiduciary Role

As a fiduciary, your responsibility is to select, monitor, and document plan investments in the best interest of participants. While CITs can be a great low-cost option, they still require the same level of due diligence:

• Review performance and fees regularly

• Understand the underlying strategy and manager

• Benchmark against peers

• Maintain written records of your evaluations

Bottom Line

CITs are becoming more common in retirement plan lineups for a reason—they offer cost savings, flexibility, and institutional-quality strategies. If your plan has the size and structure to support them, it’s worth exploring CITs as part of your investment menu.

Want help evaluating whether CITs make sense for your plan? Let’s talk—we can walk through the pros, cons, and how to make an informed decision that supports your fiduciary duties.

Scott Higgins | AIF ®, CFP®, CPFA®, NSSA®

Financial Advisor

Roth 401(k): To Contribute or Not to Contribute? A Comprehensive Comparison

Top 7 Reasons to Contribute to a Roth 401(k)

1. Tax-Free Withdrawals

Contributions grow tax-free, and qualified withdrawals in retirement are tax-free, providing a tax-free income stream.

2. No Required Minimum Distributions (RMDs)

Unlike traditional 401(k)s, Roth 401(k)s have no RMDs during your lifetime, giving you more control over your retirement funds.

3. Tax Diversification

Having both Roth and traditional retirement accounts provides tax diversification, allowing your to better manage your tax situation in retirement.

4. Inheritance Benefits

Roth 401(k)s can be passed on to heirs with tax-free growth, providing a valuable estate planning tool.

5. Potential for Higher Tax Rates

If you expect to be in a higher tax bracket in retirement, paying taxes now with a Roth 401(k) may save you money in the long run.

6. No Income Limits

Unlike Roth IRAs, Roth 401(k)s do not have income limits, making them accessible to high earners.

7. Employer Contributions

you can still receive employer matching contributions, which are placed in a traditional 401(k) account, allowing you to benefit from both types of accounts.

Top 7 Reasons Not to Contribute to a Roth 401(k)

1. Immediate Tax Impact

Contributions to a Roth 401(k) are made with after-tax dollars, reducing your current take-home pay.

2. Lower Current Income

If you are in a high tax bracket now but expect yo be in a lower tax bracket in retirement, a traditional 401(k) may be more beneficial.

3. Potential Tax Law Changes

Future tax laws could change, impacting the benefits of Roth 401(k) accounts.

4. Complexity in Management

Managing both Roth and traditional accounts can add complexity to your retirement planning.

5. Limited Contribution Limits

The overall contribution limit for 401(k) accounts is the same, meaning your total contributions to Roth and traditional accounts combined cannot exceed the annual limit.

6. No Immediate Tax Deduction

Contributions to a Roth 401(k) do not provide an immediate tax deduction, unlike traditional 401(k) contributions.

7. Impact on Financial Aid

Having significant Roth 401(k) balances may impact your eligibility for financial aid or other need-based assistance programs.

Conclusion

Deciding whether to contribute to a Roth 401(k) depends on your current financial situation, future tax expectations, and retirement goals. Weighing the pros and cons can help you make an informed decision that aligns with your long-term financial strategy.

Curious which is best for you or want to learn more about the Roth? Give us a call.

Scott Higgins | AIF ®, CFP®, CPFA®, NSSA®

Financial Advisor

Simple IRA vs 401(k): Should You Consider Upgrading?

As your company evolves, your retirement plan should keep pace. If you're considering upgrading from a SIMPLE IRA to a 401(k), here are the top five advantages and considerations to keep in mind.

Top 5 Advantages of a 401(k)

1. Higher Contribution Limits

Employees can defer up to $23,500 in 2025 (plus $7,500 catch-up if age 50+), compared to $16,500 for SIMPLE IRAs. That means more savings potential for owners and staff.

2. Greater Plan Flexibility

401(k) plan is a more competitive and familiar benefit, especially for high earners or experiences professionals.

3. Enhanced Talent Attraction & Retention

A 401(k) plan is a more competitive and familiar benefit, especially for high earners or experienced professionals.

4. Expanded Employer Contribution Options

Unlike SIMPLE IRAs with fixed formulas, 401(k) plans let you tailor your matching or profit-sharing strategy based on your budget and goals.

5. Long-Term Scalability

401(k)s can grow with your business and integrate advanced strategies like Safe Harbor provisions or Cash Balance plans as your company matures.

Top 5 Considerations or Trade-Offs

1. Increased Administrative Complexity

401(k)s requires IRS filings (e.g., Form 5500), nondiscrimination testing's, and possibly annual audits once your plan grows.

2. Higher Setup and Maintenance Costs

Compared to SIMPLE IRAs, 401(k)s typically involve provider, TPA, and advisory fees, but startup tax credits may offset these costs for small employers.

3. Fiduciary Responsibility

Sponsors of 401(k) plans are fiduciaries, meaning you're responsible for plan oversight, investment selection, and cost monitoring.

4. More Time and Decision-Making Required

You'll need to work with a recordkeeper, advisor, and/or TPA to select features, manage compliance, and communicate with participants.

5. Transition Planning is Key

While SECURE Act 2.0 now allows mid-year transitions to Safe Harbor 401(k)s, timing and communication with employees are still critical.

Ready to Evaluate Your Options?

Let's talk about whether a 401(k) plan makes sense for your team, and how to make the transition smoothly and strategically.

Scott Higgins | AIF ®, CFP®, CPFA®, NSSA®

Financial Advisor

Maximizing Returns: Strategic Asset Allocation for Roth and Pre-Tax Retirement Accounts

As a financial advisor, we employ a strategy that allocates more aggressive and growth-oriented assets to Roth accounts while positioning conservative assets in pre-tax retirement accounts. This approach is designed to optimize the long-term growth potential and overall risk profile of your global portfolio. Here's a closer look at how this strategy works and why it benefits our clients.

Strategic Allocation: Roth vs. Pre-Tax Accounts

Roth Accounts:

1. Aggressive Growth Assets: We allocate higher-growth investments, such as stocks, small-cap equities, and emerging markets, to Roth accounts. The tax-free growth and withdrawals of Roth accounts make them ideal for investments with higher potential returns.

2. Long-Term Horizon: Roth accounts typically have a longer investment horizon, allowing for more aggressive growth strategies. The extended time frame provides opportunities to ride out market volatility and capitalize on compounding returns.

Pre-Tax Accounts:

1. Conservative Assets: In pre-tax accounts, we allocate more conservative investments, such as bonds, money market funds, and dividend-paying stocks. these assets provide stability and income, aligning with the tax-deferred nature of pre-tax accounts.

2. Mitigating Tax Impact: By placing conservative assets in pre-tax accounts, we aim to reduce the tax burden when required minimum distributions (RMDs) begin. The lower growth rate of conservative investments results in smaller RMDs, helping manage taxable income in retirement.

Benefits of This Strategy

1. Tax Efficiency: Allocating high-growth assets to Roth accounts allows for tax-free compounding of returns, maximizing the benefits of tax-free withdrawals in retirement.

2. Optimized Growth Potential: By leveraging the tax-free nature of Roth accounts, we enhance the potential for substantial growth, which can significantly boost overall retirement savings.

3. Risk Management: Placing conservative assets in pre-tax accounts helps balance the portfolio's risk, providing stability and protecting against market downturns.

4. Holistic Approach: This strategy ensures that all assets work together to meet the global portfolio’s risk profile and investment objectives, creating a cohesive and effective retirement plan.

5. Flexibility in Retirement: The combination of aggressive and conservative assets across different account types provides flexibility in managing withdrawals and tax implications during retirement.

Considerations for Investors

• Risk Tolerance: Assess your risk tolerance to ensure the asset allocation aligns with your comfort level and financial goals.

• Time Horizon: Consider the time horizon for each account, as longer horizons typically warrant more aggressive growth strategies.

• Tax Implications: Evaluate the tax benefits and potential impacts of different account types to maximize overall portfolio efficiency.

Conclusion

Our strategic allocation approach, dividing aggressive growth assets to Roth accounts and conservative assets to pre-tax accounts, aims to optimize tax efficiency, manage risk, and enhance growth potential. This holistic strategy ensures that your total assets work together to meet your global portfolio risk profile and investment objectives, providing a strong foundation for a secure retirement.

Scott Higgins | AIF ®, CFP®, CPFA®, NSSA®

Financial Advisor

Trustee vs. Authorized Signer: Who Does What in Your Retirement Plan?

When managing a retirement plan, such as a 401(k), it's important to understand the distinct roles involved in overseeing and operating the plan. Two key roles that often get confused are the plan trustee and the authorized signer. While both are essential to the plan's operation, their responsibilities and authority differ significantly.

What is a Plan Trustee?

The plan trustee is a fiduciary who holds legal responsibility for the plan's assets. This role required the trustee to act in the best interest of plan participants and their beneficiaries. Trustees are responsible for making decisions about investments, ensuring the plan complies with regulatory requirements, and safeguarding the plan's assets.

Key Responsibilities of a Plan Trustee:

1. Oversight of Plan Investment: Trustees ensure that investments are appropriate, diversified, and align with the plan's goals.

2. Fiduciary Duty: Trustees must act solely in the interests of participants, avoiding any conflicts of interests.

3. Compliance: Trustees ensure the plan complies with the Employee Retirement Income Security Act (ERISA) and other laws.

4. Asset Custody: Trustees oversee the safekeeping of the plan's funds.

What is an Authorized Signer?

An authorized signer is someone designated to sign documents, such as plan-related agreements, distribution requests, or administrative forms. While an authorized signer plays an operation role, they do not hold the fiduciary responsibility of a trustee.

Key Responsibilities of an Authorized Signer:

1. Administrative Actions: Authorized signers execute day-to-day tasks like signing checks, approving distributions, or authorizing vendor payments.

2. Limited Scope or Authority: Their authority is confined to the actions specified by the plan sponsor, and they don't have decision-making power over plan investments.

3. Non-Fiduciary Role: Unlike a trustee, an authorized signer is not responsible for the overall management or compliance of the plan.

Main Differences Between a Trustee and an Authorized Signer

Aspect	Plan Trustee	Authorized Signer
Fiduciary Responsibility	Yes, must act in the best interest of participants.	No, acts as directed by the plan sponsor.
Decision-Making Power	Has authority over investments and plan management.	Limited to executing specific administrative tasks.
Legal Liability	Bears legal liability for fiduciary decisions.	No legal liability for plan compliance or investments.
Scope of Role	Broad, encompassing overall plan oversight.	Narrow, focused on administrative duties.

Why Does This Matter?

Understanding these roles is crucial for ensuring your retirement plan is managed effectively and compliant with applicable laws. Appointing the right individuals to these roles, and understanding the scope of their responsibilities, can help protect the plan sponsor and ensure participants receive the benefits they deserve.

Final Thoughts

While a trustee oversees the plan with fiduciary responsibility, an authorized signer handles administrative tasks without the same level of legal obligation. Clearly defining these roles can improve the efficiency and compliance of your plan operations.

Scott Higgins | AIF ®, CFP®, CPFA®, NSSA®

Financial Advisor

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