Women and Retirement: Expectations Met or Missed?

women retirement

As of late March 2020, the number of Americans expressing confidence in their ability to live comfortably in retirement was at near-record highs. Of course, since that time pandemic-related market flux may have changed the numbers. Because many surveys covering retirement are conducted only once a year, with results released several months after the information is gathered, we won’t fully understand the impact on retirements for some time.

Still, one study conducted early in 2020, the 30th Annual Retirement Confidence Survey conducted by the Employee Benefits Research Institute (EBRI) and discussed in their Issue Brief dated June 8, 2020, provides some interesting information. Companies striving to help women achieve a secure retirement may be particularly interested.

Women face different challenges in saving

While overall retirement confidence was high, women expressed less confidence in their future retirement security than their male counterparts. The problems women face in preparing for retirement tend to be different than are those of working men, the study says. Often, women earn less than men do, they take breaks from the workforce to handle parenting and other family responsibilities, and they often live longer. 

Differences also evident by marital status

The results may be further broken down by marital status. Among married working women, 76% said they are very or somewhat confident they will have enough money to retire comfortably. In comparison, 43% of divorced women and 51% of never-married women expressed the same level of confidence. The disparity seems to also be due, at least in part, to lower levels of assets held by each group. About 72% of divorced women reported less than $25,000 in retirement assets, compared to 54% of never-married women. Add debt to the equation — where 74% of divorced women and 67% of never-married women said debt is a problem — and it’s easy to see why women are less confident. 

To help close the confidence gap, EBRI suggests that more specialized information and help planning for retirement, and even with everyday financial issues, is needed. Women who are dealing with the financial fallout of a divorce or the death of a spouse may need particular attention. When reviewing your service providers, this could be a good topic to explore. How do the provider’s communication materials address the varying situations faced by your workforce? Can the materials be targeted to different groups? By working together to find these answers, the gaps may start to shrink.

Read more at https://tinyurl.com/EBRI-2020-RCS.


For plan sponsor use only, not for use with participants or the general public. This information is not intended as authoritative guidance or tax or legal advice. You should consult with your attorney or tax advisor for guidance on your specific situation.

Kmotion, Inc., 412 Beavercreek Road, Suite 611, Oregon City, OR 97045; www.kmotion.com

©2020 Kmotion, Inc. This newsletter is a publication of Kmotion, Inc., whose role is solely that of publisher. The articles and opinions in this publication are for general information only and are not intended to provide tax or legal advice or recommendations for any particular situation or type of retirement plan. Nothing in this publication should be construed as legal or tax guidance; nor as the sole authority on any regulation, law or ruling as it applies to a specific plan or situation. Plan sponsors should consult the plan’s legal counsel or tax advisor for advice regarding plan-specific issues.

#1- 05041784 (Exp. 08/21)

Read More

One for the Ages

Social Security

Consider the trade-offs before deciding what age to begin taking Social Security benefits

As you get close to retirement, one of your biggest questions will likely be when to begin taking Social Security benefits. If you file at an age other than your full retirement age, your benefit amount will be reduced or increased. Filing earlier gives you a reduced benefit; filing later gives you an increased benefit. For someone with a full retirement age of 67, here is what you can expect, based on the age you actually file for benefits:

Social Security Benefit by Filing Age:


62        70.0%

63        75.0%

64        80.0%

65        86.7%

66        93.3%

67        100.0%

68        108.0%

69        116.0%

70        124.0%

Source: Social Security Administration of the U.S. government.

Everyone’s situation is unique, so it’s important to look closely at the trade-offs before making your decision. Here are some reasons you might want to claim benefits earlier:

  • You simply need the money to help pay living expenses
  • You cannot work longer due to health reasons
  • You have caregiving responsibilities for a family member
  • You have been laid off or lost your job.

Here are some reasons you might want to claim benefits later: 

  • You don’t need the money right now, or have income from other sources to tide you over (such as a pension or workplace plan)
  • You believe you have a longer life expectancy, during which higher payments would be helpful
  • You plan to work at some level during retirement
  • You simply like the idea of getting higher benefits over the long term.

To increase your knowledge, check out AARP’s Social Security Resource Center (www.aarp.org/retirement/social-security) as well as the Social Security Administration’s Retirement Benefits web page (www.ssa.gov/planners).


This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal or investment advice. If you are seeking investment advice specific to your needs, such advice services must be obtained on your own separate from this educational material.

Kmotion, Inc., 412 Beavercreek Road, Suite 611, Oregon City, OR 97045; www.kmotion.com

©2020 Kmotion, Inc. This newsletter is a publication of Kmotion, Inc., whose role is solely that of publisher. The articles and opinions in this newsletter are those of Kmotion. The articles and opinions are for general information only and are not intended to provide specific advice or recommendations for any individual. Nothing in this publication shall be construed as providing investment counseling or directing employees to participate in any investment program in any way. Please consult your financial advisor or other appropriate professional for further assistance with regard to your individual situation.

#1- 05041711 (Exp. 08/21)

Read More

SECURE Act Changes Loom

SECURE Act Changes Loom

Check these items off your to-do list

Remember 2019? It was in December of that year (which seems very long ago now) that the SECURE Act was signed into law. 

Today, as COVID-19 continues raging around the world, the SECURE Act may have slipped off your radar in favor of other pressing issues. But make no mistake, it is still out there — and it does require your attention. In general, plan sponsors have until the last day of the 2022 plan year (December 31, 2022, for calendar-year plans) to adopt the amendments required by the Act. However, operational compliance is required during the period between the actual plan amendment date and the effective date for the Act’s required changes.

Here are just two of the items that will need the attention of 401(k) plan sponsors. Because many of the words and phrases in this article have specific legal meanings, please consult the plan’s attorney to be sure your plan will be compliant with these and other provisions of the Act.

Eligibility for long-term part-timers

In the decades prior to the SECURE Act, plans could set a year of service for eligibility purposes at a minimum of 1,000 hours worked during a plan year. Under the SECURE Act, the required hours have been reduced. Employees who are at least 21 years old and who work at least 500 hours in three consecutive 12-month periods must be allowed to make salary deferrals in the 401(k) plan. The definition of a year of vesting service is also changing to reflect the 500-hour minimum, rather than the former 1,000 hours in a plan year requirement. These rules become effective for plan years that begin after December 31, 2020.

While these long-term, part-time employees will be able to make salary deferrals, they are not required to be included in employer matching contributions or other contributions from the employer.

This is a forward-, not backward-looking, provision. Sponsors should start tracking the hours of their part-time staff for the plan year beginning after December 31, 2020. Workers who accumulate at least 500 hours of service during the first, second and third years after that date must be allowed to begin salary deferrals in the plan during the subsequent plan year. For a calendar year plan, then, deferrals would be allowed during the 2024 plan year from employees with at least 500 hours of service in 2021, 2022 and 2023.

It is worth noting that employees included in the plan only because of this provision—those with less than 1,000 hours of service — do not need to be included in the plan’s nondiscrimination tests, including top-heavy testing. As before, employees with at least 1,000 hours of service and who meet the plan’s age requirement must be included in the tests. 

Lifetime income disclosures

Along with disclosures about vesting status and investments, plans will soon be required to include a new disclosure about lifetime income. To meet this requirement, the disclosure must describe the participant’s balance in terms of a monthly annuity that could be purchased with the participant’s account balance. By December 20, 2020, the U.S. Department of Labor (DOL) expects to release interim rules, including a model disclosure statement and assumptions on which the annuity figure should be based. As long as the disclosure meets legal requirements, the plan and its fiduciaries will be protected against liability arising from it. Expect the first disclosure to be required 12 months after the DOL issues its interim rules, likely sometime during 2021.


For plan sponsor use only, not for use with participants or the general public. This information is not intended as authoritative guidance or tax or legal advice. You should consult with your attorney or tax advisor for guidance on your specific situation.

Kmotion, Inc., 412 Beavercreek Road, Suite 611, Oregon City, OR 97045; www.kmotion.com

©2020 Kmotion, Inc. This newsletter is a publication of Kmotion, Inc., whose role is solely that of publisher. The articles and opinions in this publication are for general information only and are not intended to provide tax or legal advice or recommendations for any particular situation or type of retirement plan. Nothing in this publication should be construed as legal or tax guidance; nor as the sole authority on any regulation, law or ruling as it applies to a specific plan or situation. Plan sponsors should consult the plan’s legal counsel or tax advisor for advice regarding plan-specific issues.

Tracking #1- 05041793 (Exp. 08/21)

Read More

401(k) Decisions – You Can Take It With You

If you are preparing to change jobs, do you know what your choices are for managing the money in your current employer’s retirement plan? Although many people choose to take a cash distribution, there are other options that may benefit you more. 

Uncle Sam Loves Cash Distributions 

Taking a lump-sum cash distribution may trigger an immediate 20% federal withholding tax. In addition, a 10% additional tax may apply if you are younger than age 59½.1 Taking your money as a cash withdrawal also means that you’ll no longer enjoy the potential benefits of tax deferral that a qualified retirement plan offers. 

Depending on your circumstances, you may have several options that will allow you to maintain the tax-deferred status of your retirement plan assets: 

  • Leave the money in your former employer’s plan. Your former employer must allow you to leave the money where it is as long as the balance exceeds $5,000. You’ll no longer be able to contribute to the account, but you’ll still decide how the existing assets are invested. 
  • Roll over the money to your new employer’s plan. By “rolling” the money directly to your new plan, you may avoid the taxes that could eat away at a cash distribution. You’ll also have only one set of investments to monitor. Even if you’re not immediately eligible to contribute to the plan at your new job, you may still be able to roll over the money right away. 
  • Roll over the money to an IRA. If your new employer doesn’t offer a retirement plan or you aren’t yet eligible to participate, you might roll over the money directly to a traditional IRA. Again, you might avoid taxes that you’d incur if you took a cash distribution and still enjoy the potential benefits of tax deferral. Experts advise against commingling your retirement plan assets with other IRAs you may have set up. Instead, consider opening a separate IRA account, known as a “conduit IRA,” which may allow you to move the funds to a new employer’s retirement plan at a later date. 

Research Your Options 

If you plan to change jobs, don’t just take the money and run. Since rules vary from company to company, find the time to explore your alternatives. If you have specific questions about your retirement plan distribution options, contact your employer’s benefits coordinator or a qualified financial consultant. 


Source/Disclaimer: 

1If you’re age 55 or older and separate from service, the 10% additional tax might not apply for certain periodic withdrawals taken from an employer-sponsored retirement plan. Keep in mind that the 10% additional tax may be incurred on distributions taken from an IRA prior to age 59½. 

Required Attribution 
 
Because of the possibility of human or mechanical error by DST Systems, Inc. or its sources, neither DST Systems, Inc. nor its sources guarantees the accuracy, adequacy, completeness or availability of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. In no event shall DST Systems, Inc. be liable for any indirect, special or consequential damages in connection with subscriber’s or others’ use of the content.  

© 2019 DST Systems, Inc. Reproduction in whole or in part prohibited, except by permission. All rights reserved. Not responsible for any errors or omissions. 

Read More

Identity Theft and Taxes

Identity theft is one of the fastest growing crimes in America affecting millions of unsuspecting individuals each year. A dishonest person who has your Social Security number can use it to obtain tax and other financial and personal information about you. 

Identity thieves can get your Social Security number by: 

  • Stealing wallets, purses, and your mail. 
  • Stealing personal information you provide to an unsecured website, from business or personnel records at work, and from your home. 
  • Rummaging through your trash, the trash of businesses, and public trash dumps for personal data. 
  • Posing by phone or email as someone who legitimately needs information about you, such as employers or landlords. 

Tax-related identity theft occurs when a thief uses your Social Security number to file a tax return and claim a fraudulent tax refund. In 2018 alone, there were 649,000 confirmed identity theft tax returns.1 The IRS has become increasingly diligent in its efforts to thwart identity theft with a program of prevention, detection, and victim assistance. The “Taxes. Security. Together.” program is aimed at building awareness among taxpayers about the need to protect personal data when conducting business online and in the real world. 

Stay Vigilant 

By remaining vigilant and following a few commonsense guidelines, you can support the IRS in keeping your personal information safe. Here are a few tips to consider: 

  • Protect your information. Keep your Social Security card and any other documents that show your Social Security number in a safe place. 
  • DO NOT routinely carry your Social Security card or other documents that display your number. 
  • Monitor your email. Be on the lookout for phishing scams, particularly those that appear to come from a trusted source such as a credit card company, bank, retailer, or even the IRS. Many of these emails will direct you to a phony website that will ask you to input sensitive data, such as your account numbers, passwords, and Social Security number. 
  • Safeguard your computer. Make sure your computer is equipped with firewalls and up-to-date anti-virus protections. Security software should always be turned on and set to update automatically. Encrypt sensitive files such as tax records you store on your computer. Use strong passwords and change them routinely. 
  • Be alert to suspicious phone calls. The IRS will never call you threatening a lawsuit or demanding an immediate payment for past due taxes. The normal mode of communication from the IRS is a letter sent via the U.S. postal service. 
  • Be careful when banking or shopping online. Be sure to use websites that protect your financial information with encryption, particularly if you are using a public wireless network via a smartphone. Sites that are encrypted start with “https.” The “s” stands for secure. 
  • Google yourself. See what information is available about you online. Be sure to check other search engines, such as Yahoo and Bing. This will help you identify potential theft sources and will also help you maintain your reputation. 

Fear You Have Been Scammed? 

If you feel you are the victim of tax-related identity theft — e.g., you cannot file your tax return because one was already filed using your Social Security number — there are several steps you should take. 

  • File your taxes the old-fashioned way — on paper via the U.S. postal service. 
  • Print an IRS Form 14039 Identity Theft Affidavit from the IRS website and include it with your tax return. 
  • File a consumer complaint with the Federal Trade Commission (FTC). 
  • Contact one of the three national credit reporting agencies — Experian, Transunion, or Equifax and request that a fraud alert be placed on your account. 

If you have been confirmed as a tax-related identity theft victim, the IRS may issue you a special PIN that you will use when e-filing your taxes. You will receive a new PIN each year. 

For more information on tax-related identity theft visit the IRS website, which has a special section devoted to the topic. 


Source/Disclaimer: 

1The Internal Revenue Service, IR-2019-66, April 8, 2019. 

Required Attribution 
 
Because of the possibility of human or mechanical error by DST Systems, Inc. or its sources, neither DST Systems, Inc. nor its sources guarantees the accuracy, adequacy, completeness or availability of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. In no event shall DST Systems, Inc. be liable for any indirect, special or consequential damages in connection with subscriber’s or others’ use of the content.  

© 2020 DST Systems, Inc. Reproduction in whole or in part prohibited, except by permission. All rights reserved. Not responsible for any errors or omissions. 

Tracking #1-983948 

Read More

Go for the Gold

Performing well in these events can help you earn a gold medal in investing 

Fans of summer athletics look forward every four years to a major athletic event. Hundreds of athletes from all over the world converge to compete in swimming, track and field, gymnastics, and a host of other sports, including karate and surfing. Some of the athletes will be awarded bronze, silver, or gold medals, depending on how they perform.  

To help celebrate this motivating and inspiring event, why not try to earn a gold medal for investing in your retirement plan? Participate in the events below on a regular basis to help earn your medal.  

Review your risk tolerance  

When it comes to investing, everyone is unique. Some people prefer a more aggressive approach, especially if they are younger and have a lot of saving years ahead of them. Others prefer a more conservative approach, especially if they are nearing retirement. Others may be most comfortable with a moderate approach — an equal balance of aggressive and conservative investments. You should review your attitude toward investment risk on an annual basis — especially if there have been any life changes, such as marriage, birth or adoption of a child, divorce, nearing retirement, or adding new financial goals in addition to retirement. 

Embrace diversification 

Putting your money into a number of different types of investment options that include various asset classes can help reduce risk of overexposure to a single investment or asset class. Generally speaking, if you diversify your dollars into different asset classes, a decline in one asset class (i.e. utilities) should not have a significant impact on your overall portfolio. There is perhaps no better way to illustrate this than to look to the story of Life Savers candy. 

Clarence Crane invented Life Savers in 1912. He manufactured only one flavor: Pep-O-Mint. In 1913, Crane was approached by Edward J. Noble. Noble suggested that offering different flavors of Life Savers would attract more customers. Crane wasn’t interested in the concept but agreed to sell the business to Noble for $2,900. In his lifetime, Noble went on to develop a billion-dollar business manufacturing different flavored Life Savers. By diversifying his product, he appealed to more people and protected his business from the risk of one flavor losing popularity.  

Diversification works with investments, too. You should keep in mind that diversification does not ensure a profit or guarantee against loss.  

Rebalance your investments 

It’s no secret that investments rise and fall over time. And asset classes do not always rise and fall together. As such, your original game plan to diversify across different asset classes may drift over time. Let’s say that last quarter there was a stock market upswing and your original desired investment allocation of 60% in stock funds has now grown to 70%. Meanwhile, your intended investment allocation to bond and money market funds has now decreased. The current overall investment allocation no longer matches your wishes and may have become riskier than you are comfortable with. 

One solution for this is to choose to participate in an automatic rebalancing program if one is offered by your retirement plan recordkeeper. If you don’t have access to such a service, it’s easy to rebalance your investments yourself. In the example mentioned earlier, that means going into your account and selling off 10% of your stock fund investments and reallocating those funds back into your bond and money market investments so that they are aligned with your chosen allocation percentages. Representatives at your recordkeeper’s call center can likely help you do this.  

Seek professional help if you need it 

Many people consult with an investment advisor for guidance and advice regarding their retirement plan investments. An advisor can help you determine your retirement goals and how you can pursue them. They can: 

  • Provide ongoing portfolio rebalancing on your behalf. 
  • Help you understand different types of investments and their place in a balanced investment portfolio. 
  • Help you determine your financial goals beyond retirement, such as buying a home, funding a college education, starting your own business, or just getting better at budgeting and paying down credit card debt. 
  • Help you determine an appropriate investment strategy to achieve your financial goals, which are based on your risk tolerance and time frame.  
  • Meet with you on a regular basis to track progress and adjust as necessary. 

This material was prepared by LPL Financial, LLC.  

Securities and advisory services offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. To the extent you are receiving investment advice from a separately registered independent investment advisor that is not an LPL Financial affiliate, please note LPL Financial makes no representation with respect to such entity.   

If your advisor is located at a bank or credit union, please note that the bank/credit union is not registered as a broker-dealer or investment advisor. Registered representatives of LPL may also be employees of the bank/credit union. These products and services are being offered through LPL or its affiliates, which are separate entities from, and not affiliates of, the bank/credit union. Securities and insurance offered through LPL or its affiliates are: 

Not Insured by FDIC/NCUA or Any Other Government Agency Not Bank/Credit Union Guaranteed Not Bank/Credit Union Deposits or Obligations May Lose Value 

This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal or investment advice. If you are seeking investment advice specific to your needs, such advice services must be obtained on your own separate from this educational material. 

Kmotion, Inc., 412 Beavercreek Road, Suite 611, Oregon City, OR 97045; www.kmotion.com 

©2020 Kmotion, Inc. This newsletter is a publication of Kmotion, Inc., whose role is solely that of publisher. The articles and opinions in this newsletter are those of Kmotion. The articles and opinions are for general information only and are not intended to provide specific advice or recommendations for any individual. Nothing in this publication shall be construed as providing investment counseling or directing employees to participate in any investment program in any way. Please consult your financial advisor or other appropriate professional for further assistance with regard to your individual situation. 

Tracking #1-957756 (Exp. 02/21)

Read More