Guide to Retirement | Demystifying Social Security Benefits and Taxation in Retirement Planning

Social Security benefits serve as a vital source of income for millions of retired and disabled individuals in the United States. While these benefits are designed to provide financial security, it’s important to understand how they are taxed. Let’s break down the basics of Social Security benefit taxation, including when and how it occurs, ensuring you have a clearer picture of how this impacts your overall retirement income. When Social Security Benefits are Taxed: Not all recipients of Social Security benefits are required to pay taxes on their benefits. The taxability of these benefits is determined by a combination of your income and fling status. The Internal Revenue Service (IRS) uses a formula known as “provisional income” to calculate whether your benefits are subject to taxation. Provisional income is calculated by adding up your adjusted gross income (AGI), non-taxable interest, and half of your Social Security benefits. Based on this provisional income, the IRS established certain income thresholds to determine whether your benefits are taxable. These thresholds are as follows for the tax year 2023:

1) Single filers:

· If your provisional income is below $25,000, your benefits are generally not taxable.

· If your provisional income falls between $25,000 and $34,000, up to 50% of your benefits may be subject to taxation.

· If your provisional income exceeds $34,000, up to 85% of your benefits may be taxable.

2) Married couples filing jointly:

· If your provisional income is below $32,000, your benefits are generally not taxable.

· If your provisional income falls between $32,000 and $44,000, up to 50% of your benefits may be subject to taxation.

· If your provisional income exceeds $44,000, up to 85% of your benefits may be taxable.

It’s important to note that these income thresholds may change over time due to inflation or adjustments in tax regulations, so it’s always wise to consult the latest information provided by the IRS. In addition, social security benefits may be subject to a reduction of benefits if receiving benefits while still working prior to you full retirement age. This topic will be covered in a later article. How Social Security Benefits Are Taxes: If a portion of our Social Security benefits is subject to taxation, the IRS uses a multi-tiered system to determine the specific tax liability. The taxable portion can be added to your other sources of income to determine your overall tax bracket. However, it’s crucial to understand that the maximum taxable amount of Social Security benefits is limited to 85% of the total benefit amount. In other words, even if you fall into the higher tax bracket, you will not pay taxes on more than 85% of your Social Security benefits. Reporting and Paying Taxes: To account for the taxation of Social Security benefits, you are required to report the taxable portion of your benefits on your federal income tax return. This is done using IRS Form 1040 or 1040A. If you receive a Form SSA-1099 (Social Security Benefit Statement) from the Social Security Administration, it will provide you with the necessary information to determine the taxable portion of your benefits. If you anticipate owing taxes on your Social Security benefits, you have the option to make quarterly estimated tax payments or have taxes withheld from other sources of income, such as pensions or retirement account distributions. To have taxes withheld from your Social Security benefits themselves, you can complete IRS Form W-4V. Understanding the taxation of Social Security benefits is essential for retirees and those nearing retirement age. By grasping the basic principles outlined in this article, you can better navigate the complex tax rules surrounding these benefits. Remember, not all Social Security income is taxed, and the taxability depends on your provisional income. Consult with a tax professional to determine the specific tax implications based on your personal circumstances. Stay informed, plan ahead, and make the most of your Social Security benefits. The tax and legal references attached herein are designed to provide accurate information with regard to the subject matter covered and are provided with the understanding that Rose Street Advisors is not engaged in rendering tax, legal, or actuarial services. If tax, legal or actuarial advice is required, you should consult your accountant, attorney, or actuary. Rose Street Advisors does not replace those advisors.

JULIA SANDERS

AIF®, CPFA® | Retirement Relationship Manager

Meet Julia, a people-focused life-long learner with several years of experience in the retirement plan industry. Throughout her career, Julia has been committed to maintaining strong client relationships by providing incredible customer service. She is passionate about helping clients define and plan for their retirement goals. Julia’s daily role at the firm energizes and reinforces her commitment to client-focused work.

SCOTT HIGGINS

AIF®, CFP®, CPFA® | 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!

Securities and Investment Advisory Services offered through M Holdings Securities, Inc., a Registered Broker/Dealer and Investment Advisor, Member FINRA/SIPC. Rose Street Advisors, LLC is independently owned and operated. #5829024.1

This information was developed as a general guide to educate plan sponsors and is not intended as authoritative guidance or tax/legal advice. Each plan has unique requirements, and you should consult your attorney or tax advisor for guidance on your specific situation.

©401(k) Marketing, LLC. All rights reserved. Proprietary and confidential. Do not copy or distribute outside original intent.

Interested in more?

Let's Talk

All Things 401k | Supercharge Your Company's Retirement Benefits: The Ultimate Guide to Cross-Tested Profit Sharing Plans for Plan Sponsors

A Cross-Tested Profit-Sharing Plan is a type of 401(k) profit-sharing plan that allows employers to allocate contributions unequally among employees based on certain predetermined factors. These plans are particularly attractive for businesses with a diverse workforce, varying compensation levels, and different age groups. By using this design, employers can strategically allocate contributions to favor specific groups of employees, such as highly compensated employees (HCE) or older employees, while still satisfying the nondiscrimination testing requirements set by the Internal Revenue Service (IRS). Here's how a 401(k) Cross-Tested Profit-Sharing Plan works:

1. Establishing Plan Criteria: The employer identifies specific factors to classify employees into different groups. Common criteria included job classification, compensation levels, age, and years of service. Employees are grouped based on these criteria.

2. Setting up Contribution Groups: Once the employee groups are established, the plan sponsor creates contribution groups that consist of employees with similar characteristics. These groups may include HCEs, non-highly compensated employees (NHCEs), different departments, or any other relevant segments of the workforce.

3. Allocating Contributions: The employer determines the total employer contribution to be made to the plan for a particular year. The allocation of contributions is based on a percentage of each employee’s compensation, typically expressed as a fraction of the employee’s salary.

4. Passing Nondiscrimination Testing: One of the critical aspects of a Cross-Tested Profit-Sharing Plan is passing the nondiscrimination testing requirements imposed by the IRS. These tests ensure that the plan does not unfairly favor HCEs and discriminate against NHCEs.

a. Coverage Testing: The plan must cover a sufficiently broad group of employees, including both HCEs and NHCEs, to ensure it does not disproportionately benefit higher-paid employees.

b. Actual Deferral Percentage (ADP) Testing: The ADP test compares the average deferral percentages of HCEs to those of NHCEs. If the difference between these two groups is substantial, corrective actions may be necessary.

c. Actual Contribution Percentage (ACP) Testing: The ACP test examines the employer matching and profit-sharing contributions made to HCEs versus NHCEs. Like the ADP test, any significant disparities may require corrections.

5. Corrective Actions: If the plan fails any of the nondiscrimination tests, the plan sponsor has options to correct the imbalance. Corrective actions may include returning excess contributions to HCEs, implementing a Qualified Non-Elective Contribution (QNEC) for NHCEs, or adopting a Safe Harbor 401(k) plan design to bypass the testing altogether.

6. Annual Review and Adjustment: Cross-Tested Profit-Sharing Plans should be reviewed annually, considering the company’s financial situation, workforce composition, and retirement objectives. Adjustments may be made to the contribution allocation to remain compliant and align with the company’s goals.

It's important to note that implementing a Cross-Tested Profit-Sharing Plan requires careful planning and consultation with retirement plan experts, as the design can be complex and must comply with IRS regulations. Plan sponsors should work closely with a qualified retirement plan advisor to ensure proper plan design, administration, and compliance with all regulatory requirements.

JULIA SANDERS

AIF®, CPFA® | Retirement Relationship Manager

SCOTT HIGGINS

AIF®, CFP®, CPFA® | Financial Advisor

The tax and legal references attached herein are designed to provide accurate information with regard to the subject matter covered and are provided with the understanding that Rose Street Advisors is not engaged in rendering tax, legal, or actuarial services. If tax, legal or actuarial advice is required, you should consult your accountant, attorney, or actuary. Rose Street Advisors does not replace those advisors. #5829025.1

Securities and Investment Advisory Services offered through M Holdings Securities, Inc., a Registered Broker/Dealer and Investment Advisor, Member FINRA/SIPC. Rose Street Advisors, LLC is independently owned and operated. #5829025.1

This information was developed as a general guide to educate plan sponsors and is not intended as authoritative guidance or tax/legal advice. Each plan has unique requirements, and you should consult your attorney or tax advisor for guidance on your specific situation.

©401(k) Marketing, LLC. All rights reserved. Proprietary and confidential. Do not copy or distribute outside original intent.

Interested in more?

Let's Talk

All Things 401k | Should You Add an Automatic Safe Harbor IRA to Your Plan?

High employee turnover could lead to a rise in small 401(k) accounts. Explore how adding a Safe Harbor IRA provision to your plan may help reduce plan costs and potential fiduciary risks. In 2022, more than 50 million Americans left their jobs and in the last two years, there has been record-breaking employee turnover.[1] While the number of employee departures has begun to decrease, it still remains higher than pre-pandemic levels. Employee turnover can cause problems for employers, such as many small 401(k) accounts being left behind in the company's plan. Such accounts can amplify plan costs and fiduciary risks, making it essential for plan sponsors to address these orphaned accounts. So much so that the Department of Labor (DOL) has made missing participant search and uncashed check processes a focus of audits in recent years.

Consider A Safe Harbor IRA Provision

One potential solution to this challenge is to add a Safe Harbor IRA (a.k.a. automatic rollover IRA) provision to your plan. This enables plan sponsors to remove smaller accounts from their plans automatically by rolling them into a Safe Harbor IRA. This provision allows plan sponsors to automatically roll former participant’s accounts with balances between $1,000-5,000 into an IRA — and in 2024, the upper limit increases to $7,000, thanks to SECURE 2.0. Automatic rollover IRAs can be advantageous for plan sponsors and participants. Plan sponsors benefit because removing small account balances can help: •Keep plan data clean •Reduce missing participant issues •Manage plan costs •Simplify participant disclosures and reporting •Limit fiduciary risk In addition, these provisions help plan sponsors address challenges associated with uncashed checks. And, if the plan document allows it, unvested employer profit sharing contributions can be applied to help plan sponsors pay for plan expenses and/or offset contributions.

Safe Harbor IRAs Help Participants

With a Safe Harbor IRA provision, the small accounts belonging to former employees periodically and automatically rollover into IRAs. It’s a feature that benefits participants in a variety of ways, and can: •Keep the former employee’s retirement savings intact •Preserve tax advantages •Provide more straightforward access to savings

Auto-Portability Networks: A Look into the Future of 401(k) Transfers

Automatic portability is a new option that was legitimately established under SECURE 2.0. This innovative feature allows a former employee's 401(k) account to be seamlessly transferred into the worker's new company's 401(k) without requiring the participants' express consent. Today, there are new Auto-Portability Networks being established, and the range of participating recordkeepers is expected to increase, which should facilitate the implementation of automatic portability for more workers.

Safe Harbor IRAs Complement Automatic Enrollment Features

Many 401(k) plans have automatic enrollment and escalation features – and soon all new plans will be required to have these features. While the push to add automatic savings features is likely to help Americans save more for retirement, it also has the potential to sharply increase the number of retirement plan accounts left behind. When an employee leaves, plan distribution options typically allow participants to: •Rollover into an IRA or a new employer’s plan. Rollovers help improve lifetime retirement outcomes because they preserve retirement savings and tax advantages, among other benefits. •Leave assets in the plan. Typically, participants with more than $1,000 in a plan account can opt to leave the savings in a previous employer’s plan. Some large defined contribution plans like to keep these assets in their plans because they provide scale, which can lower fees. The drawback is that plan sponsors have a fiduciary responsibility to keep track of former employees and must have a process in place to find missing participants. In contrast, sponsors of smaller plans often prefer not to keep the assets of former employees because having more accounts may increase plan costs and administrative responsibilities. •Take distributions in cash. About 41% of plan participants choose to cash out when they leave an employer, and the majority drain their savings.[2] It’s one of the most significant threats to retirement security. Safe Harbor IRA provisions offer a possible solution. When former employees fail to make distribution decisions, a Safe Harbor IRA enables the plan sponsor to remove those accounts from the plan, keeping plan data clean and costs low.

Is This Right for Your Plan?

In the world of 401(k) options, adding a Safe Harbor IRA provision to a company's plan can be an excellent arrow in its quiver. Especially for employers with high turnover rates. This option may help to reduce the number of small orphaned accounts left behind, potentially resulting in reduced plan costs and fiduciary risks. Safe Harbor IRAs are a friendly solution that may help to keep plan data clean, manage costs, reduce risks and improve retirement outcomes of former employees. [1] “Job Openings and Labor Turnover Archived News Releases.” U.S. Bureau of Labor Statistics. 6 Apr. 2023. [2] Wang, Yanwen, et al. “Cashing Out Retirement Savings at Job Separation.” 7 Nov. 2022.

JULIA SANDERS

AIF®, CPFA® | Retirement Relationship Manager

SCOTT HIGGINS

AIF®, CFP®, CPFA® | Financial Advisor

Securities and Investment Advisory Services offered through M Holdings Securities, Inc., a Registered Broker/Dealer and Investment Advisor, Member FINRA/SIPC. Rose Street Advisors, LLC is independently owned and operated. #5787251.1

This information was developed as a general guide to educate plan sponsors and is not intended as authoritative guidance or tax/legal advice. Each plan has unique requirements, and you should consult your attorney or tax advisor for guidance on your specific situation.

©401(k) Marketing, LLC. All rights reserved. Proprietary and confidential. Do not copy or distribute outside original intent.

Interested in more?

Let's Talk

Guide to Retirement | Employee Newsletter: Your Money Check-up

Financial education has become increasingly important in today’s job market. Workers are looking to their employers for financial wellness resources. By providing financial education to your employees, you’ll be helping them build the skills they need to help manage their finances and plan for the future. This can lead to greater job satisfaction and loyalty, as well as increased productivity in the workplace.[1] This financial education resource focuses on key questions to help employees assess their financial situation, from overspending to retirement and beyond. Sharing this helpful resource with your employees can be a positive step toward alleviating financial stress in the workplace. [1] John Hancock. “Stress, Finances and Well-being.” 2023. Download the Guide

JULIA SANDERS

AIF®, CPFA® | Retirement Relationship Manager

SCOTT HIGGINS

AIF®, CFP®, CPFA® | Financial Advisor

Securities and Investment Advisory Services offered through M Holdings Securities, Inc., a Registered Broker/Dealer and Investment Advisor, Member FINRA/SIPC. Rose Street Advisors, LLC is independently owned and operated. #5787267.1

This information was developed as a general guide to educate plan sponsors and is not intended as authoritative guidance or tax/legal advice. Each plan has unique requirements, and you should consult your attorney or tax advisor for guidance on your specific situation.

©401(k) Marketing, LLC. All rights reserved. Proprietary and confidential. Do not copy or distribute outside original intent.

Interested in more?

Let's Talk

All Things 401k | How Can Our 401(k) Plan Help Us Attract and Retain Star Employees?

With thoughtful design features, you can structure a 401(k) plan that stands out in a time of talent scarcity and meets your employees’ needs. Looking to attract and retain high-quality talent in today’s competitive labor market? Enhancing your 401(k) plan design could be the answer. It could increase your employees’ retirement security and financial well-being while motivating talent to join and stay with the company long-term. With many businesses struggling with staffing issues, savvy executives are realizing that boosting their retirement plan benefits can be a valuable part of the solution. In fact, 35% of employers have already taken proactive steps to stand out from their competitors and ensure their employees remain happy and satisfied.^{^[1}^{^]} When it comes to successfully recruiting and retaining top talent, the competitiveness of your benefits package is key. As such, you should consider what employees value most when evaluating and implementing 401(k) plan design enhancements. A 401(k) plan that incorporates features that fit the company’s budget and the needs of your workforce is the best of both worlds. Automatic Features Make a Difference Plan design features such as immediate eligibility, automatic enrollment, auto-escalation and frequent plan entry points may help boost 401(k) plan competitiveness and make it easier for employees to save for retirement. Immediate eligibility means employees can participate in the 401(k) on their date of hire, rather than based on their age or time of service. Then these eligible employees could be automatically enrolled into the plan at a meaningful rate (8–10%). Plus employers who adopt automatic enrollment can claim a tax credit of $500 for the first three years.[2] Automatic entry helps increase retirement readiness, a benefit employers can highlight in the recruiting process. Going a step farther, employers could auto-escalate employee retirement saving by 1-2% per year until the employee is saving between 10-15% toward their retirement, the recommended savings rate per year by industry experts.[3] Finally, implementing flexible eligibility requirements and frequent entry points can boost participation rates and enhance overall employee satisfaction levels. The Match Matters Prospective and current employees value employer matching contributions. If an employee is considering multiple job offers, all else being equal, companies that offer a 401(k) with a match may have an advantage. It’s no wonder that more than half of employers (55%) are making matching contributions to employees’ retirement accounts.[4] Employers can help employees understand the value of retirement plan matching contributions by presenting them as part of their total compensation. It demonstrates an investment in your employees’ future, which can go a long way when it comes to attracting new talent and cultivating loyalty among your existing workforce. Enhance Recruiting with Accelerated Vesting Many employers have a waiting period for employees to become vested in employer contributions. One-year vesting periods are common; however, some employers delay letting employees vest in the company match and other employer contributions by as much as six years. Immediate vesting may offer more recruiting power than non-immediate vesting schedules. Again, employees considering more than one job opportunity may be more likely to accept one with a company that offers immediate vesting. Beyond the 401(k): Get Creative Offering a competitive 401(k) plan shows you’re committed to your employees’ financial well-being while helping them save for the future. Outside of a retirement plan benefit, specific financial rewards for longer-term employees can provide additional motivation for them to stay. These benefits may include restricted stock, cash balance plans and non-qualified deferred compensation plans. Offering creative benefits like these can help boost retention by making more tenured employees feel valued and rewarded while enhancing their total compensation. A well-constructed 401(k) plan can be a game-changer for companies looking to attract and retain top-quality talent. By investing thoughtfully in plan design and staying competitive with benefits packages, businesses can stand out from their competitors and gain the advantage needed to succeed in today's challenging labor market.

[1] WTW. “2022: The Next Evolution of DC Plans Survey.” Feb. 2022.

[2] IRS. “Retirement Plans Startup Costs Tax Credit.” 16 Jun. 2022. [3] Vanguard. “How America Saves 2022: Insights to Action.” 2022. [4] Vanguard. “How America Saves 2022: Insights to Action.” 2022.

JULIA SANDERS

AIF®, CPFA® | Retirement Relationship Manager

SCOTT HIGGINS

AIF®, CFP®, CPFA® | Financial Advisor

Securities and Investment Advisory Services offered through M Holdings Securities, Inc., a Registered Broker/Dealer and Investment Advisor, Member FINRA/SIPC. Rose Street Advisors, LLC is independently owned and operated. #5787251.1

This information was developed as a general guide to educate plan sponsors and is not intended as authoritative guidance or tax/legal advice. Each plan has unique requirements, and you should consult your attorney or tax advisor for guidance on your specific situation.

©401(k) Marketing, LLC. All rights reserved. Proprietary and confidential. Do not copy or distribute outside original intent.

Interested in more?

Let's Talk

All Things 401k | Digital Communications - Employee Engagement Edition

After the events of the last few years, employers are becoming more aware of the positive impact of financial wellness. A well-crafted financial wellness program can provide employees with the knowledge and tools to understand why, when and how to achieve savings success. Before starting a program, it’s important to understand the implications of financial stress in the workplace, how much it might be costing you and the value behind financial education on an ongoing basis. Read about all the best ways to engage your employees in our most recent newsletter for employers and plan sponsors. Open the Newsletter

JULIA SANDERS

AIF®, CPFA® | Retirement Relationship Manager

SCOTT HIGGINS

AIF®, CFP®, CPFA® | Financial Advisor

This material and the opinions voiced are for general information only and are not intended to provide speciﬁc advice or recommendations for any individual or entity. To determine what is appropriate for you, please contact your Rose Street Financial Professional. Information obtained from third-party sources are believed to be reliable but not guaranteed.

Investments in securities involve risks, including the possible loss of principal. When redeemed, shares may be worth more or less than their original value.

By accessing any links above, you will be connected to third party web sites. Please note that Rose Street Advisors, LLC, is not responsible for the information, content or product(s) found on third party web sites.

Securities and Investment Advisory Services Offered Through M Holdings Securities, Inc. A Registered Broker/Dealer and Investment Adviser, Member FINRA/SIPC. Rose Street Advisors, LLC is independently owned and operated. File #: 5708515.1

Interested in more?

Let's Talk

All Things 401k | Digital Communications - The Business Case for Financial Wellness

If you are a company leader, you know that happy and healthy employees can often lead to less turnover, strong workplace culture and greater productivity. However, these days, financial stress has become an all-too-common problem among employees. Financially stressed employees are two times more likely to leave their jobs. In addition, they maybe spend around 3 hours a week dealing with personal financial issues.[1] Consider the case for a financial wellness program to help remedy financial stress and strengthen your bottom line.

[1] PwC. “2022 PwC Employee Financial Wellness Survey.” May 2022.

JULIA SANDERS

AIF®, CPFA® | Retirement Relationship Manager

SCOTT HIGGINS

AIF®, CFP®, CPFA® | Financial Advisor

This material and the opinions voiced are for general information only and are not intended to provide speciﬁc advice or recommendations for any individual or entity. To determine what is appropriate for you, please contact your Rose Street Financial Professional. Information obtained from third-party sources are believed to be reliable but not guaranteed.

Investments in securities involve risks, including the possible loss of principal. When redeemed, shares may be worth more or less than their original value.

By accessing any links above, you will be connected to third party web sites. Please note that Rose Street Advisors, LLC, is not responsible for the information, content or product(s) found on third party web sites.

Securities and Investment Advisory Services Offered Through M Holdings Securities, Inc. A Registered Broker/Dealer and Investment Adviser, Member FINRA/SIPC. Rose Street Advisors, LLC is independently owned and operated. File #: 5708509.1

Interested in more?

Let's Talk

A financial wellness program can help protect your company from the negative effects of financial stress. Your company's bottom line can be impacted by the high cost of turnovers, as well as silent quitting behaviors such by minimal effort and enthusiasm.

But with a proactive approach to managing finances through the implementation of a financial wellness program, organizations can help alleviate money-related pressures while boosting morale and improving their company’s bottom line.

Calculate how much your company will benefit by understanding the hidden costs associated with employee monetary distress and the impact that a financial wellness program could have on your business.

Download the Guide Here

Securities and Investment Advisory Services offered through M Holdings Securities, Inc., a Registered Broker/Dealer and Investment Advisor, Member FINRA/SIPC. Rose Street Advisors, LLC is independently owned and operated. #5697147.1

This information was developed as a general guide to educate plan sponsors and is not intended as authoritative guidance or tax/legal advice. Each plan has unique requirements, and you should consult your attorney or tax advisor for guidance on your specific situation.

Scott Higgins

AIF®, CFP®, CPFA® | 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!

Interested in more?

Let's Talk

4 Ways Employers Can Create a Culture of Wellness

To compete for top talent, companies are looking for innovative ways to stand out in a competitive labor market. Employees are looking for beefed up benefits that support their social, physical, mental and financial well-being.

Creating a culture of wellness in the workplace is a trend that’s catching on with employers across the country. A culture of wellness encourages employee health and well-being holistically by helping them adopt healthier habits in their personal and professional lives, such as exercising consistently, eating more nutritious foods, developing healthy interpersonal relationships and taking care of their mental health. Cultivating workplace wellness leads to happier, healthier and more productive employees, resulting in greater job satisfaction, loyalty, lower rates of absenteeism and reduced healthcare premiums. Employees want holistic support including workplace programs that support their social, physical, mental, and financial well-being.^[1] Here are four ways employers can create a culture of wellness:

Social Health

Social health is the ability to form satisfying interpersonal relationships with others. Employers can improve social health by supporting the creation of affinity and employee resource groups (ERGs). These employee-led groups aim to foster a more inclusive, diverse culture. Generally, ERGs are composed of employees who share common interests, affiliations or identities. These groups help encourage loyalty and greater job satisfaction for employees from diverse backgrounds to feel seen, heard and included. Additional opportunities to boost social health include encouraging volunteer opportunities, hosting networking and team events (in-person and online for remote employees), while offering family-friendly activities, such as company picnics and scavenger hunts.

Physical Health

Employers can help employees improve their physical health by offering fitness and preventive care programs. Offering perks like on-site fitness facilities or subsidized gym memberships, access to nutrition programs and resources to help employees manage chronic conditions like diabetes and autoimmune diseases are proactive ways to support employees’ physical health. On-site or virtual yoga or group exercise classes are another way to bring employees together and encourage them to focus on getting and staying healthy. Fitness challenges are another fun way to encourage employees to be more active. It also encourages camaraderie and healthy competition throughout your organization.

Mental Health

No longer taboo, mental health has become a key priority for employers and employees due to the pandemic and recent legislation. Employees’ mental health, which includes psychological and emotional well-being, has experienced a backslide in recent years, with increasing numbers of workers reporting burnout, stress and depression. Flexibility is a key component of mental health. In fact, workers whose employers support a healthy work/life balance are significantly more likely to say they feel mentally healthy (82%) vs. those that don’t have such flexibility (45%).^[2] Employers unable to accommodate flexible work schedules or remote work options, for instance, may consider offering creative, competitive perks such as: • More time off • Expanded benefits menu • Caregiver subsidies • Well-being programs • Commuter or transportation subsidies • Additional social opportunities

Financial Health

Nearly 60% of employees are stressed about their finances, and 45% can only cover six months’ worth of expenses.^[3] Employees want and expect help overcoming money challenges; 66% believe their employers are responsible for their financial well-being.^[4] Employers can meet these expectations by offering financial resources and benefits to help employees prepare for the unexpected, such as emergency savings accounts. Additionally, financial wellness education can reduce money stressors by helping employees gain confidence in their money management skills and cultivate good spending and savings habits. Providing access to a financial advisor can help ease employees’ anxiety about money so they can be more focused, productive and happier in their personal and professional lives.

Getting Started

Creating a culture of wellness in the workplace is designed to promote healthier lifestyles for employees and improve the overall social, physical, mental and financial health of your workforce. If you’re considering launching a workplace wellness program, here are some helpful tips to get started: • Start small: Pick one or two programs and build from there. • Get employees' input: Survey your workforce to find out what they want and what would be most helpful. • Make it fun: Prizes and competition can help encourage participation. • Promote the program to boost engagement: Send regular reminders and updates about wellness activities and let employees know how they can get involved. • Get leadership buy-in: Leaders must be on board for wellness programs to succeed. Take the first step towards creating a culture of wellness by requesting information on our retirement plan services.

^[1] MetLife. “20th Annual U.S. Employee Benefit Trends Study.” 2022.

^[2] MetLife. “20th Annual U.S. Employee Benefit Trends Study.” 2022.

^[3] TIAA. “2022 Financial Wellness Survey. 2022.

^[4] Employee Benefit Research Institute and Greenwald Research. “2022 Workplace Wellness Survey.” 2022.

Securities and Investment Advisory Services offered through M Holdings Securities, Inc., a Registered Broker/Dealer and Investment Advisor, Member FINRA/SIPC. Rose Street Advisors, LLC is independently owned and operated. #5675412.1

This information was developed as a general guide to educate plan sponsors and is not intended as authoritative guidance or tax/legal advice. Each plan has unique requirements, and you should consult your attorney or tax advisor for guidance on your specific situation.

Scott Higgins

AIF®, CFP®, CPFA® | Financial Advisor

Interested in more?

Let's Talk

Why Benchmarking is Crucial for Choosing the Right 401(k) Solution: Bundled vs. Unbundled

When it comes to choosing a 401(k) plan for your business, there are several options available. Two of the most common options are bundled and unbundled solutions. A bundled 401(k) plan is an all-in-one package that includes all the necessary services and products, such as recordkeeping, administration, and investment management, from a single provider. An unbundled 401(k) plan, on the other hand, allows you to choose separate providers for each of these services. While both types of plans have their benefits, it's important to benchmark them against each other to determine which is the right fit for your business. Here's why benchmarking is crucial when choosing the right 401(k) solution:

1. Comparing Costs:

One of the most important factors to consider when choosing a 401(k) plan is the cost. Bundled plans may appear to be more expensive upfront, but they often come with lower investment fees and administrative costs. By benchmarking bundled and unbundled plans against each other, you can compare the costs of each option to determine which is the best fit for your business and in the best interest of your employees.

2. Evaluating Services:

Another factor to consider when choosing a 401(k) plan is the level of services provided. Bundled plans offer a comprehensive suite of services, while unbundled plans allow you to pick and choose the services you need. By benchmarking the two options, you can evaluate the services provided and determine which plan is best suited for your business's needs.

3. Analyzing Investment Options:

Investment options are a crucial aspect of any 401(k) plan. Bundled plans often use proprietary products for their investment options which can lower costs and offer specialized investment strategies but can often times limit the range of investment options available to employees. These proprietary products often come with surrender charges that may make it more difficult or expensive for employees to move their investments if they are utilizing those proprietary investment options in their portfolio. Unbundled plans typically allow you to choose from a wider range of investment products allowing employees more options for diversification of their individual portfolio. By benchmarking the investment options offered by each provider, you can evaluate which provider offers the best investment options for your employees.

4. Considering Employee Satisfaction:

Ultimately, the success of your 401(k) plan will depend on how satisfied your employees are with it. Unbundled solutions tend to be a better fit for more complex or complicated plan designs because a TPA firm specializes in just the administration for the plan as compared to a firm that takes on more responsibility by doing the recordkeeping and administration for the plan. By benchmarking bundled and unbundled plans against each other, you can determine which plan is more likely to meet the needs and expectations of your employees. To benchmark a 401(k) plan, employers should work with a qualified advisor who can compare the plan to others in the industry and provide recommendations for improvements. The advisor should consider factors such as plan design, fees, investment options, and employee participation rates.

Why Benchmark an Existing 401(k) Plan?

A 401(k) plan is an important retirement savings tool that allows employees to save and invest a portion of their salary on a tax-deferred basis. However, not all 401(k) plans are created equal, and it's important for employers to regularly benchmark their plan to ensure that it is competitive and meets the needs of their employees. Benchmarking is the process of comparing a company's 401(k) plan to other plans in the industry to identify strengths, weaknesses, and opportunities for improvement. Here are a few reasons why benchmarking is important:

1. Ensuring Competitiveness:

One of the main reasons for benchmarking a 401(k) plan is to ensure that it is competitive with other plans in the industry. If a company's plan is not competitive, it may struggle to attract and retain top talent, which can have a negative impact on the company's bottom line.

2. Identifying Areas for Improvement:

Benchmarking can help identify areas where a company's plan may be falling short. For example, if the plan's fees are higher than those of comparable plans, it may be time to negotiate with the plan provider or consider switching to a different provider.

3. Meeting Fiduciary Obligations:

As a plan sponsor, it's important to fulfill your fiduciary obligations by ensuring that the plan is in the best interest of your employees and establishing that the fees paid are reasonable for the services provided. Benchmarking can help ensure that the plan is meeting this standard and that all investment options are appropriate and properly managed.

4. Enhancing Employee Satisfaction:

A competitive 401(k) plan can be a valuable employee benefit and can help enhance employee satisfaction and loyalty. By benchmarking the plan and making necessary improvements, employers can demonstrate their commitment to their employees' financial well-being. In conclusion, benchmarking is a critical component of maintaining a competitive and effective retirement savings program. It’s important to compare costs, evaluate services, analyze investment options, and consider employee satisfaction, so you can make an informed decision that will benefit both your business and your employees in the long run. By regularly reviewing and improving the plan after establishment employers can ensure that it meets the needs of their employees and help them achieve a secure retirement.

JULIA MUNSON

AIF®, CPFA® | Retirement Relationship Manager

This material and the opinions voiced are for general information only and are not intended to provide speciﬁc advice or recommendations for any individual or entity. To determine what is appropriate for you, please contact your Rose Street Financial Professional. Information obtained from third-party sources are believed to be reliable but not guaranteed.

Investments in securities involve risks, including the possible loss of principal. When redeemed, shares may be worth more or less than their original value.

By accessing any links above, you will be connected to third party web sites. Please note that Rose Street Advisors, LLC, is not responsible for the information, content or product(s) found on third party web sites.

Securities and Investment Advisory Services Offered Through M Holdings Securities, Inc. A Registered Broker/Dealer and Investment Adviser, Member FINRA/SIPC. Rose Street Advisors, LLC is independently owned and operated. File #: 5641297.1

Interested in more?

Let's Talk

« Previous Page