This month’s employee memo is a simple reminder/payroll stuffer that highlights the benefits of participating in a retirement plan.  April 2014 Employee Memo

• Pretax dollars
• Potential Employer match
• Investment opportunities
• Convenient way to save

 

“One of the core concepts of inter-market analysis is the idea that certain areas of the investable landscape lead or lag others, which allows one to exploit information which gradually diffuses to stocks, commodities, bonds, and currencies.

Not all areas of the market are predictive. Many focus on copper (JJC) under the idea that its relative behavior may be a tell on growth/inflation expectations. The collapse as of late, however, is not anywhere nearly as worrisome for equity investors as positioning into sector-deflation trades.”  See Correction

You may be eligible for a valuable incentive, which could reduce your federal income tax liability, for contributing to your company’s 401(k). If you qualify, you may receive a Tax Saver’s Credit of up to $2,000 ($4,000 for married couples filing jointly) if you made eligible contributions to an employer sponsored retirement savings plan. The deduction is claimed in the form of a non-refundable tax credit, ranging from 10% to 50% of your annual contribution.  See Employee Memo

“This past year has seen a firestorm of criticism casting 401(k)s as mostly terrible. Their performance is too poor, and the fees too high, with poor investment choices built into most of them. Typical plans are complicated to manage and difficult to administer. Most people remain invested at levels far below their retirement needs.”  See There’s Nothing Wrong

What happened to stocks in January and early February is nothing new. It’s happened quite a few times in the past four years and eleven months. Ever since mark-to-market accounting was fixed in March/April 2009, these corrections have been short-lived and relatively mild. And once they were over the market went higher. It’s been a very strong bull market.

Nonetheless, few investors truly understand why things turned around so abruptly in 2009 and every time the stock market declines there is a mad rush to believe this time the sky really is falling.  See First Trust

 

As your trusted retirement plan consultant we are always happy to make retirement planning less puzzling. But if you’re the type who still enjoys a puzzle now and then, see if you can spot the eight retirement-related terms in our Retirement Word Search!  Retirement Plan Puzzle

“We’ve been looking for someone who was involved in actually writing section 401(k) of the U.S. tax code more than 35 years ago, read the e-mail to Richard Stanger. “Yes, that’s me,” he wrote back.

Stanger was a primary author of a little-noticed piece of a 1978 tax law. At the time, the 869-word insert was lost in the political heat of limits on tax-deductible three-martini lunches, lower capital gains rates and a bipartisan coalition that was rejecting President Jimmy Carter’s proposals. Today, 401(k) is likely the most recognizable number in the Internal Revenue Code.

As the first 401(k) generation ages — about 10,000 baby boomers turn 65 every day in the U.S. — questions multiply about the adequacy of their finances. Just last week, President Barack Obama proposed a new retirement plan for Americans who don’t have 401(k) plans at work as he warned that Social Security often isn’t enough to rely on.”  See Thank or Blame