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In episode 41 of “The JoyPowered™ Workspace Podcast,” JoDee and Susan discuss retirement vehicles offered in the workspace with Kevin Ervin, founder of Market Street Wealth Management. Topics include the difference between Defined Benefit and Defined Contribution plans, where to start if you’re thinking of creating a retirement program, and the mistakes you should avoid.

In the United States over the last 20 years, we’ve seen a shift from Defined Benefit plans (pensions) being the most popular to Defined Contribution plans now being the overwhelming majority. The most important thing to understand about this is that when employers phased out pension plans, they shifted responsibility for retirement planning from themselves to the employees. This means employees with Defined Contribution plans are responsible for funding their own retirement, and starting to save at an early age is crucial.

President Trump signed an executive order on August 31, 2018 asking the Treasury Department to review its rules for mandatory withdrawals from traditional 401(k) plans and individual retirement accounts (IRAs) starting at age 70 ½. There’s also a proposal in the House of Representatives that’s part of the Family Savings Act, part of which suggests that if a participant has a balance in an employer’s 401(k) or 403(b) plan and their balance is under $50,000, they don’t have to take any required minimum distributions. Kevin shares some implications and possible outcomes of both.

There’s nothing better than a Roth IRA if you’re young, because you have many years for the earnings to grow and you won’t be taxed. The difference between a Roth and a traditional IRA is when the participant gets a tax advantage; in a Roth IRA all the benefit is at the end when you won’t be taxed upon taking money out, and in a traditional IRA the tax advantage is up front and you’ll have to pay income taxes on the back end.

If you want to get started with a retirement vehicle in your workspace, try to find an independent financial advisor; there are lots of hidden fees within 401(k) plans that can be difficult for an untrained person to figure out. There’s also the potential for personal liability, and a good financial advisor can help you mitigate those risks. Look for Certified Financial Planners or talk to your HR friends who have already done this to find someone who would be a good fit for your organization.

Get in touch with Kevin:

(317) 860-1078

kevine@mswma.com

In this episode’s listener mail, John from New York was recently downsized and wants to know how to make networking less uncomfortable. The new “Best Practice Sharing” segment focuses on the hosts’ and some listeners’ favorite TED Talks. In the News, JoDee and Susan discuss a Willis Towers Watson survey about forecasted pay increases in 2019.

Mentioned in This Episode:

• Purple Ink, the HR consulting firm JoDee owns
• Susan Tinder White Consulting, the HR consulting firm Susan owns
• JoyPowered, JoDee’s first book
• The JoyPowered Family, JoDee’s second book
• “Retirement Offerings in the Fortune 500: A Retrospective”, a Willis Towers Watson report released in 2018
• Market Street Wealth Management Advisors, Kevin’s financial planning and investment advisory firm
• Certified Financial Planner Board of Standards, a good place to find an independent financial advisor
• the ink pad, a unique and memorable space to host a meeting or training in Carmel, Indiana
• Episode 3 of our podcast, “Starting a Job Search”
• TED Talks
• “Your Body Language May Shape Who You Are”, listener Catherine’s favorite TED Talk
• “The Power of Introverts”, listener Peggy’s favorite TED Talk
• Quiet: The Power of Introverts in a World that Can’t Stop Talking, Susan Cain’s book
• “Forget the Pecking Order at Work”, one of Susan’s favorite TED Talks
• “U.S. employees in line for slightly larger pay raises in 2019, Willis Towers Watson survey finds”