We hope you enjoy these helpful articles about retirement planning, investment management, tax planning, and business issues.
api-manage has not set their biography yet

Corporate Retirement Plan and IRA Limits For 2017

Cost of Living

On October 27, 2016, the IRS announced the 2017 pension plan limitations in Notice 2016-62. Importantly, the 2017 contribution limits for 401(k), 403(b) and governmental 457(b) remain unchanged at $18,000 and the age 50 catch-up limit remains unchanged at $6,000. Other selected dollar limits from 2015 – 2017 are summarized in the charts below.


Continue reading
387 Hits

Retirement: It's Closer Than You Think

Are you saving enough for retirement? For many people, the answer is no. Fifty-one percent of American workers who have a retirement plan have less than $50,000 in savings and investments (excluding the value of their primary residence or defined benefit plans)1.


It’s hard to predict exactly how much money you’ll need during your retirement years, especially if retirement is a long way off. But if you keep waiting to save more, one day retirement will be right around the corner and you might not be prepared. To help ensure you’ll be retirement ready when the time comes, consider the following questions.

Where Will Your Income Come From?

Continue reading
344 Hits

Checking On Your Fiduciary Liability Coverage


Employers that sponsor 401(k) and other defined contribution retirement plans should review their fiduciary liability policies to make sure they provide adequate protection. Here’s some information you may find helpful when you check your coverage.


Fidelity Bonding Is Not Fiduciary Liability Insurance

Retirement plan fiduciaries face personal liability exposure that will not be protected by a fidelity bond. The pension law (ERISA) generally requires that every fiduciary of an employee benefit plan and any other person who handles plan money be covered by a fidelity bond. The fidelity bond protects the retirement plan against misappropriation of funds by individuals handling the plan’s assets. However, the fidelity bond does not protect against claims for losses sustained because of a breach of fiduciary duty.


Continue reading
337 Hits

Catch-up Contributions - Making Up For Lost Time

Saving enough money for a comfortable retirement is probably one of your primary financial goals. But, with so many other demands on your money, it’s easy to get off track. If you are age 50 or older and want to make up for lost time, the tax law allows you to catch up on your savings by contributing extra amounts to an employer-sponsored retirement savings plan and/or an individual retirement account (IRA).

Save Through Your Employer Sponsored 401(k) Plan

401(k) plans and their cousins (403(b) tax-sheltered annuities, salary reduction SEPs, 457 governmental plans, and SIMPLEs) allow participating employees to defer a portion of their pay to the plan on a pretax basis. You aren’t taxed on your plan contributions, or on the earnings your contributions generate, until you receive distributions from the plan.

The tax law limits this benefit by capping the annual amount of salary that can be deferred. For 2016, the dollar limit is $18,000 ($12,500 for a SIMPLE). But, if your plan allows it, you can contribute even more once you reach age 50. The maximum catch-up contribution for 2016 is $6,000 ($3,000 for a SIMPLE).

Continue reading
391 Hits

Don't Let That Lump Sum Fool You

Whether you look at New Year’s Day as a fresh start or as just another day, it’s as good a time as any to look at where you are and where you’re headed. One place you’re probably headed, at some point, is retirement!

Ideally, you will have significant retirement assets when you’re ready to retire. But don’t be misled by a big lump sum. That money has to last throughout your retirement, and that could be many years.

Not Your Grandparents’ Retirement

You may be retired considerably longer than your grandparents were. The average life expectancy for a newborn baby in the U.S. at the beginning of the 20th century was 47.3 years.1 The projected average life expectancy for babies born in 2014 is 78.8 years,2 an increase of more than 30 years.

Continue reading
354 Hits

Exception to the Early Withdrawal Penalty

Qualified plan distributions paid to participants who are younger than age 59 1/2 are generally subject to a 10% excise tax. There are several exceptions to the age-59 1/2 rule, however, most notably the exception for distributions paid to terminated participants age 55 or older.


Under Code Section 72(t)(2)(A)(v), payments made to qualified plan participants who have separated from service with their employer during or after the year they reach age 55 are exempt from the 10% early withdrawal penalty. Here are some practical examples:

Example 1: Participant severs employment after age 55

Continue reading
335 Hits

Healthy Habits

You probably know how important it is to keep your physical health in good shape. Habits like eating right, exercising, and taking vitamins will help you maintain your health. Did you also know that adopting some healthy financial habits can help you keep your retirement planning in good shape?


Measure Performance Regularly

At least once a year, take a look at how your investments have performed. Make sure to check both recent and long-term performance. If your investments have experienced some short-term losses, don’t panic. Temporary performance fluctuations are a normal part of investing.

Continue reading
453 Hits

Selecting Your Retirement Plan Default Investment

Lumin Client Asks: Our 401(k) plan has had the same default investment for several years. We want to make sure it is still a suitable choice for our plan. What should we consider when choosing a default investment?

Lumin Answers: First, you should decide if you want a default investment that meets the pension law’s requirements for a “qualified default investment alternative,” or QDIA. Using a QDIA in conjunction with automatic enrollment can help you secure liability protection for the investment of employees’ account assets when they have been given the opportunity to direct their investments but have failed to do so.

Under U.S. Department of Labor regulations, a QDIA must be a mutual fund or managed by an investment manager, plan trustee, or plan sponsor who is a named fiduciary and generally cannot invest employee contributions in employer securities. Options include:

Continue reading
355 Hits

Choosing a Suitable Vesting Schedule

Choosing a Suitable Vesting Schedule

A retirement plan’s vesting schedule, which establishes when employer contributions to the plan become non-forfeitable, plays a role in how effective the plan is in helping to attract and retain employees. Employers will want to carefully consider their goals and the available options when selecting a vesting schedule for their plan.

Continue reading
365 Hits

Funding Your Retirement: Save Early and Often

When you’re 22 and starting your first real job, retirement may seem light years away. But then, suddenly, you’re 60 and retirement is right around the corner. Preparing for a financially secure future takes time and an appropriate investment strategy for each stage of your life.

Continue reading
354 Hits

Meet Retirement Challenges Head On

Gone are the days when employees stayed with one company for their entire working life and then retired with a nice pension. When it comes to having a secure retirement, you may be pretty much on your own.

What will your retirement be like? A lot depends on your ability to recognize and overcome the potential financial challenges. Consider some of the challenges you might face in the years ahead.

Keeping Tabs on Expenses

Your retirement budget may be a lot different from your budget while working. By the time you retire, you may have paid off your mortgage and eliminated most of your other debt, such as credit card balances and car loans. And you won’t have commuting and other work-related expenses. But if you plan to travel or pursue hobbies, the costs of those activities may be significant, at least in your early retirement years.

Continue reading
409 Hits

Passing the ADP Test

To retain their tax-favored status, 401(k) plans have to demonstrate that they don’t discriminate in favor of highly compensated employees. Actual deferral percentage (ADP) nondiscrimination testing is an annual ritual for 401(k) plans that do not have a safe harbor design or a qualified automatic contribution arrangement and that are not SIMPLE 401(k) plans.

Continue reading
423 Hits

2016 Plan Limitations

Cost of Living

 The IRS has announced that there are no cost-of-living  adjustments to the following key retirement plan limitations  for 2016:

• Elective deferrals to 401(k), 403(b), and most 457 plans: $18,000

• Catch-up contributions to 401(k), 403(b), and most 457 plans: $6,000

• Annual additions to a defined contribution plan account: $53,000

Continue reading
395 Hits

Stop Plan Leaks

hand w coins 

When employees know that they can dip into their retirement plan  accounts before retirement, if necessary — either through a plan loan or  a hardship withdrawal — that can be the reassurance some need to join  and contribute to your 401(k) plan. But you don’t want your plan  participants to view your plan as a household emergency fund to be  used for any unexpected expense. Here are some ways you can slow the leakage of retirement assets from your plan.

Continue reading
394 Hits

The Importance of Plan Compliance

The Importance of Plan Compliance

folder w money

 To preserve its tax-exempt status, a qualified retirement plan must comply with legal and regulatory requirements,  both in form (the plan documentation) and in operation (how the plan is operated in accordance with the plan  document). Plan sponsors must work with their service providers to ensure that plans are properly maintained and to  limit plan defects.

Continue reading
386 Hits


Tell A Friend

Investment Updates

Investment advisory services offered through Lumin Financial LLC, which is an independent Registered Investment Adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any securities. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed on this site.