It’s hard to believe, but another holiday season is upon us – and with it comes the age-old question: “What do I get for the kids in my life?” Every year brings a hot new toy or a new fashion trend … but what if you could give a gift that lasted longer than that? Consider contributing to a college savings plan, and you’ll give the lifelong gift of education. 529 plans: A convenient way to save for the future The fact of the matter is, college costs are on the rise, and there may be a major gap between expected total expenses and what families can actually afford. That’s why it’s critical that ..read more

My brother, bouncing his baby on his knee, said to me, “I won’t pay for my kid’s college tuition. I want them to take ownership of their college experience.” He went on to compare the lessons of hard work his kids will receive, to the process of a caterpillar breaking through a cocoon: It takes a lot of struggle, but that struggle is necessary in order to gain enough strength to be able to live as a butterfly. In response, I made three points. First, I urged him to consider reframing his statement from what “I won’t do for my kids” to “This is how I’m willing to help my kids get started on the ..read more

On June 19, the Internal Revenue Service (IRS) issued new guidance (Notice 2020-50) providing enhanced access to plan distributions and plan loans under the Coronavirus Aid, Relief and Economic Security (CARES) Act. Shortly thereafter, the IRS released Notice 2020-51 providing guidance relating to the CARES Act suspension of required minimum distributions (RMDs). CARES Act overview Among other items, the CARES Act waives the 10% additional tax for early distributions associated with any “coronavirus-related distribution” (CRD) taken by qualified individuals in 2020 from a defined contribution ..read more

On June 29, the Department of Labor (DOL) proposed a new regulation to govern investment advice pertaining to retirement accounts. This new rule replaces an earlier rule that was invalidated in 2018 by a federal appeals court. The proposed rule would provide exemptions under federal law allowing fiduciaries to receive compensation for advice that would otherwise be prohibited, such as third-party payments, as long as they act in a retirement saver’s best interests. The new proposed class exemption would require fiduciary investment advice to be provided in accordance with impartial conduct sta ..read more

You’ve heard of the baby boomer generation, followed by Generation X, the Millennial generation, and Generation Z. It’s enough to make most readers feel old, but it doesn’t stop there. Just the other day, I read about “Generation Alpha” — the next wave of kids born between 2013 and 2025. Alpha, the Greek letter, seems to be the label given to Generation Alpha by the unofficial namers of generations — academics, market researchers, and cultural observers. We will see if this label lasts (remember the less successful “MTV generation?”), but for now, Generation Alpha seems to be the frontrunner ..read more

Despite uncertain market conditions during the COVID-19 pandemic, Americans continued to save for retirement through defined contribution (DC) plans in the first quarter of 2020, according to an Investment Company Institute (ICI) study. Preliminary estimates in the ICI’s “Defined Contribution Plan Participants’ Activities, First Quarter 2020” report show that only 1.4% of DC plan participants stopped contributing to their plans in that time period, compared with 0.9% in the first quarter of 2019 and 2.7% in the first quarter of 2009 (another time of financial market stress). The study tracks c ..read more

On April 22, 2020, the Social Security Board of Trustees issued its annual report on the health of the Social Security trust funds in which they projected that the long-term financial status of the trust funds remains virtually unchanged. As reported last year, the trust funds’ combined asset reserves will be depleted in 2035; at that time, without reform, income will be sufficient to pay 79% of scheduled benefits. However, some organizations that monitor Social Security policy and funding issues have expressed concern that the current economic downturn resulting from the onset of the coronavi ..read more

Birthdays, Mother’s and Father’s Day, Christmas — There’s no shortage of holidays and special events to look forward to each year. This month is no exception. In just a few days, I’ll be celebrating one of my personal favorites: National 529 College Savings Plan Day. As you might have guessed, this holiday was created to raise awareness of 529 plans, which offer a flexible, tax-advantaged way to fund a future college education. In the spirit of the holiday, I thought I’d share five noteworthy facts about 529 plans. 1) There are no account minimums to open a 529 plan. Furthermore, 529 plans hav ..read more

In January and February of this year, Republicans and Democrats began discussing a new round of retirement savings legislation, as a follow-up to the Setting Every Community Up for Retirement Enhancement (SECURE) Act signed into law as part of a year-end spending package on Dec. 20, 2019. The new proposal (preliminarily dubbed “Retirement 2.0” or “SECURE Act 2.0”) would likely center around two bills previously introduced by House Ways and Means Chairman Richard Neal, D-MA: The Automatic Retirement Plan Act, which would require most small employers with 10 or more employees to maintain automa ..read more

About midnight on March 25, 2020, the Senate unanimously approved a sweeping $2 trillion stimulus bill, including retirement relief provisions.  The Coronavirus, Aid, Relief and Economic Security (CARES) Act was passed by a vote of 96-0 (four senators were under quarantine at the time of the vote).  The bill was passed by the House on March 27 and signed into law by President Donald Trump on the same day. Among other things, the measure gives direct payments to individuals, boosts unemployment insurance, provides tax relief to businesses, bolsters health care infrastructure, provides ..read more