Articles

• Evaluating AUM Fees for Small Practice Retirement Plans

  Because most of the money in small practice plans belongs to the owners, they pay the bulk of the fees, and if your plan has AUM fees, you can potentially save a lot of money if you calculate what you are paying in fees, and determine whether you can make changes to the plan to minimize or eliminate completely all AUM fees in favor of fixed/flat fees. Read on

• Cash Balance Plans For Solo And Group Practices

  A Cash Balance plan helps boost your tax-deferred savings if you plan to retire in 10 years or less and you would like to catch up quickly. This type of plan can also increase tax-deferred savings if you are making a lot of money now but are not sure whether this will last over the long term. Read on

• Group Practice Retirement Plans: Fix Problems, Improve Your Plan, Minimize Cost

  Even though group practice retirement plans typically have a relatively small number of participants, these plans can be more complex and laden with compliance issues and challenges. Older group practice plans often have serious compliance and fiduciary issues, and unless someone knowledgeable takes the time to examine the plan operation and paperwork, chances are that these issues would only be discovered upon an audit by the Internal Revenue Service or U.S. Department of Labor – in other words, much too late. Read on

• How To Reduce Your Practice Retirement Plan Cost

  It is well-known that the majority of retirement plan providers that serve the small and mid-sized retirement plans are bundled platforms that make most of their money via asset-based fees. Many plan providers do not offer the best available solutions to small solo and group practice plans, and this often means sub-par plan design and lack of any fiduciary or compliance services, which leads to higher plan cost and can potentially result in unnecessary expenses later on. Even those providers who are open-architecture tend to charge significantly higher fees for small solo and group practice plans relative to what the larger plans pay for the same services. However, it is definitely possible to get the best available plan services at a lower cost. Read on

• Hiring a Fiduciary Adviser for Your Retirement Plan

  While fiduciary liability is an important consideration, the primary reason to hire a fiduciary who will act in your best interest is to help you minimize your plan expenses and assist you in managing your plan investments. Read on

• Low Cost Retirement Plans for Small Business Owners

  So you are now ready to open a retirement plan for your business. Whether you are looking to minimize taxes or provide a valuable perk to your employees, there are many different choices available depending on what you are trying to accomplish. Which plan should you open? SEP IRA? SIMPLE IRA? Individual 401k? Safe Harbor 401k? Cash Balance or a Defined Benefit plan? This article provides general guidelines on how to select an appropriate plan for your business. Whether a particular plan is a good fit for your business should ultimately be determined by your CPA or your fee-only retirement plan consultant. Read on

• Retirement Plan Advice: Our Value Proposition

  We are an independent fee-only wealth management firm that offers retirement plan consulting services to small business owners. We will work with you to design the plan that's right for you. Read on

• Why We Don’t Charge Asset-Based (AUM) Fees

  Majority of today's advisers, whether they are fee-only (that is, they are paid only by the client, not by third parties for selling products), or fee-based (having a mix of fees and commissions from product sales) are compensated by charging a percentage of assets under management (AUM) fees. AUM fees can range from about 0.25% to as high as 2%, not including the fees paid for mutual funds and other financial products, which can be as high as 2%. Proponents say that this type of compensation is good for the client because the adviser has 'skin in the game' - that is, the adviser makes more if the clients' portfolio performs, and less if it does not. A closer look, however, shows that the AUM model is not what it is made out to be. Read on

• Mega Backdoor Roth with ERISA 401(k) Plans

  Most plans that are not owner-run, such as those offered by hospitals, universities, and other large employers don't allow the option for doing Mega Backdoor Roth conversions, but a smaller partner-run practice plan can easily adopt any changes necessary to implement the mega backdoor Roth 401(k) strategy. Read on

• The Ideal Retirement Plan for Your Practice

  Once you start looking around for a retirement plan provider for your practice, it does not take long to realize that plans offered to small practices are sold as a product rather than custom-designed for each practice based on your specific practice needs. When looking for the lowest cost option, small practice owners often opt for plans with lower recurring administrative fees, and end up paying significantly more than they anticipated over the long term because most of the cost is hidden in the asset-based fees charged for plan investments and services. Read on

• What Is The Best Plan For My Practice, 401(k) Or SIMPLE IRA?

  One of the biggest retirement plan questions for small practice owners is whether to set up a SIMPLE IRA or a 401(k) as their first retirement plan. Often, practice owners opt for a SIMPLE IRA only because there are no administrative costs associated with operating this plan. In some cases this can be a big mistake, especially if you have the ability to contribute significantly more to a 401(k) plan. Read on

• Small Practice Retirement Plans: How Are They Different*?

  Despite the apparent similarities, small practice and large company plans cannot be more different from one another. Understanding how small practice plans are different from large plans is important for small practice owners because most plan providers specialize in working with large companies and they are not capable of addressing the full scope of issues that small practice plans will encounter. Read on

• Best 401(k) Plan: Pooled or Participant-Directed?

  In participant-directed 401(k) plans, all participants get their own personal account and are responsible for managing their own investments. However, the participant-directed 401(k) plan isn't the only type of 401(k) plan available. In this article we'll discuss pooled 401(k) plans and explain why a pooled plan might be a better choice for a small practice than a participant-directed 401(k) plan. Read on

• Long Term Cost of Retirement Plan Asset-based Fees

  Many bundled 401(k) plans offered to small practices can have very high fees, which include mutual fund fees and other asset-based fees. Fees average about 1.5% but at the high end of the spectrum fees can be as high as 4%. These AUM (assets under management) fees always grow as your account grows. The compounded cost of these fees can reach into hundreds of thousands of dollars for a typical 401(k) account. Read on

• Five Principles of Investment Management

  Whether you are a do-it-yourself investor or you work with an adviser, there are several basic principles you should be aware of that can help improve your investment performance. If you are just starting out or if you are working with brokers and other advisers who are primarily making money from either selling products or charging asset-based fees, you will need to educate yourself to avoid making costly mistakes. Read on

• Debt Repayment Basics

  Whether you have student loans, practice loans or a mortgage, one of the most common questions asked is whether it makes sense to pay out your loans early. In this article we’ll discuss the answers to the above questions, and we’ll come up with general guidelines that can help you develop the best strategy for loan repayment. Read on

• How to Run a Successful Retirement Plan: A Guide for Medical and Dental Practices

  Whether you have an existing plan, looking to open a new plan or upgrade the plan you already have, there are four things you need to consider that can significantly improve the quality of your plan: having the right plan design, minimizing plan cost, managing your fiduciary liability as a plan sponsor and selecting the right plan services that can both minimize your fiduciary liability and help plan participants achieve better investment results. Read on

• What CPAs Must Know Before Recommending 401k Plans to Clients

  By using 401k plans, many small business owners can save money on taxes while providing themselves and their employees with a way to save for retirement. In the past decade 401k plans have earned a bad reputation which is totally undeserved. The problem is that high fees, poor investment choices and lack of basic financial education on how to manage their investments led to massive losses which turned many people away from 401k plans. A properly designed plan can be used as a long-term savings and investment vehicle for the business owner and employees. Read on

• Long Term Cost of Investment Expenses

  Morningstar's director of mutual fund research, Russel Kinnel, reports in an August 9 article on Morningstar.com, How Expense Ratios and Star Ratings Predict Success: "In every single time period and data point tested, low-cost funds beat high-cost funds." Read on

• Planning For Your Children’s Higher Education Expenses

  Let’s face it – given the current costs of education and the projected growth in costs, which have outpaced inflation and earnings over the past decade, your children’s education is one of the biggest investments you will ever make. Is your investment in your children’s education worth it? Read on

• Ten Reasons to Plan Your Finances

  Discipline is required to achieve results. Saving for retirement is like dieting - if you use the wrong strategy, you will always go back to square one. To accumulate wealth you need to invest in such a way as not to depend on the stock market to deliver your returns, and such a strategy has to be maintained for decades to produce results. Read on

• Why I (Still) Like ‘Buy and Hold’

  Buy and hold was recently pronounced to be 'dead' by many investment professionals, authors and commentators. However, the problem lies in general misunderstanding of how to manage portfolio risks, not with the buy and hold concept itself. Read on

• What we really know (and don’t know) about the Stock Market

  Many investment professionals are not able to distinguish fact from fiction when it comes to their understanding of how the Stock Market works. In this article, a number of important publications dealing with the stock market are reviewed. Read on

• Advice for Generations X and Y: How to Avoid Spending Too Much

  Many members of generations X and Y end up putting themselves in a position of total financial dependence. With proper planning, financial independence can be achieved by saving and by avoiding excessive spending. Read on

• How taxes work

  It turns out that a small number of people pay most of our taxes. So next time a tax cut is discussed, those who pay most of the taxes deserve most of the benefits. Read on

• Want to save enough for retirement? Talk to your children about finances

  Want to save enough for retirement? Talk to your children about finances. There has been a lot of articles written about how expensive it is to raise children. Little attention has been paid as to why this is so and what can be done about it. Read on

• Lessons for Advisers from the Crash of 2008

  Most investment advisers still don't know very much about how to protect our client's portfolios from crashes. To avoid future losses, we must learn our lessons from the crash of 2008. Read on

• Correlation and Diversification: How to Manage Portfolio Risk

  The risks of a portfolio consisting of high risk investments is not diversified away because of high correlation that manifests itself during financial crises. Investment choice must be dictated first and foremost by the liquidity, transparency, expenses and management type (active vs. passive), not by the investment's correlation to other investments in the portfolio. Read on