How much to save for retirement
"I have a client who is concerned about saving for retirement"...What a planner needs to understand about accumulating retirement assets.
What is the appropriate replacement ratio for my client?
(Kenn Beam Tacchino, JD, LLM and Walt Woerheide, PhD, CFP® and Somnath Basu, Ph.D.)
A look at several retirement income models. We learn about an alternative replacement ratio approach that takes into consideration an individuals savings rate.
How can a planner fine-tune the retirement expense calculation?
(Kenn Beam Tacchino, JD, LLM and Walt Woerheide, PhD, CFP® and Somnath Basu, Ph.D.)
A discussion of the age banding model and how it differs from the traditional approach for determining retirement needs. We learn how breaking out categories of expenses helps to better estimate a clients actual retirement needs.
How does the age banding approach reduce how much you need to save for retirement?
(Kenn Beam Tacchino, JD, LLM and Walt Woerheide, PhD, CFP® and Somnath Basu, Ph.D.)
We dig deeper into the age banding approach to understand how it works. We learn that the age banding approach can reduce how much clients have to save as compared to the traditional model.
How do saving and spending patterns change prior to and into retirement?
(David A. Littell, JD, ChFC®, CFP® and Kenn Beam Tacchino, JD, LLM and Somnath Basu, Ph.D.)
We discuss how pre-retirees balance saving and spending needs and discuss the changing spending patterns over the retirement period.
Why assessing budgeting is such a critical part of the retirement planning process?
(David A. Littell, JD, ChFC®, CFP® and Kenn Beam Tacchino, JD, LLM and Somnath Basu, Ph.D.)
We discuss how retirement planning revolves around assessment of current expenses and how to frame this issue with clients to help them overcome the resistance to this process.
What assumptions should be used when calculating retirement needs?
(David A. Littell, JD, ChFC®, CFP® and Kenn Beam Tacchino, JD, LLM )
An examination of the assumptions required when using a retirement accumulation calculator and the merits of choosing one assumption over another. We learn how to fine-tune assumptions to reflect client conditions.
Should I revise long-term retirement investment assumptions in turbulent times?
(Kenn Beam Tacchino, JD, LLM and Walt Woerheide, PhD, CFP® and Somnath Basu, Ph.D.)
A discussion of whether it is appropriate to change long-term investment expectations as result of a recession. We learn about the difference between a downturn in the market and a structural change in the market.
What is the appropriate retirement savings rate for my younger clients?
(Kenn Beam Tacchino, JD, LLM and Walt Woerheide, PhD, CFP® and Somnath Basu, Ph.D.)
An examination of an article that develops a table of appropriate retirement savings rates for individualsbased on when they start saving and their retirement income expectations. We learn how a savings rate table can be used as a planning tool.
What can we learn from behavioral science research about retirement savings?
(David A. Littell, JD, ChFC®, CFP® and Kenn Beam Tacchino, JD, LLM and Somnath Basu, Ph.D.)
We discuss how a good retirement plan can fail without an understanding of what drives human behavior.
How can a planner help to navigate around retirement planning roadblocks?
(David A. Littell, JD, ChFC®, CFP® and Kenn Beam Tacchino, JD, LLM )
A review of several impediments that make it difficult to save for retirement. We learn some techniques for circumventing these issues.
How can communication skills influence clients to save more for retirement?
(Kenn Beam Tacchino, JD, LLM and Somnath Basu, Ph.D. and Joshua Weiner, Ph.D.)
An analysis of how traditional educational programs may not be the best way to convince clients to save for retirement. We learn to address our clients goals and to appeal to social norms that affect their savings behavior.
How do clients perceptions affect their willingness to save for retirement?
(Kenn Beam Tacchino, JD, LLM and Somnath Basu, Ph.D. and Joshua Weiner, Ph.D.)
A discussion of how a clients perceived ability to succeed impacts on their behavior. We learn the importance of establishing small, attainable goals.
How can we motivate our clients to save more for retirement?
(Kenn Beam Tacchino, JD, LLM and Somnath Basu, Ph.D. and Joshua Weiner, Ph.D.)
A discussion of the factors that help get the client started. We learn how precommitment to the goal and imparting a sense of responsibility can help the client to save more.
What are all the forces that influence an individual to save for retirement?
(Kenn Beam Tacchino, JD, LLM and Somnath Basu, Ph.D. and Joshua Weiner, Ph.D.)
An exploration of the costs, benefits and fears involved in an individuals decision to save for retirement. We learn about a decision making model can help financial advisors better understand their clients actions.
What do participants misunderstand about their company's retirement plan?
(Stephen H. Rosen, E.A., C.P.C., F.C.A and David A. Littell, JD, ChFC®, CFP®)
Steve Rosen adds an interesting perspective on what participants misunderstand about their retirement benefits at work. His view is that the biggest concern is not the misunderstanding of the plan’s specific terms, but the lack of a comprehension of how much participants need to save for retirement. If this issue is addressed, the role of the company’s retirement plan comes into better focus.
Designing more effective employer sponsored retirement plans
(Stephen H. Rosen, E.A., C.P.C., F.C.A and David A. Littell, JD, ChFC®, CFP®)
We discuss plan design and communication strategies that can help to ensure that an employer sponsored qualified plan is an effective savings vehicle for retirement.
Plan design considerations for the small business owner
(Stephen H. Rosen, E.A., C.P.C., F.C.A and David A. Littell, JD, ChFC®, CFP®)
We discuss recent trends in plan design for small business owners. We learn about the evolution of the cross-tested profit sharing plan, combining defined-benefit and defined-contribution plans, and reasons small businesses are choosing cash-balance plans.
How do nonqualified executive benefits impact retirement planning? (Part 1)
(Albert J. "Bud" Schiff, MSPA, CLU®, CAP®, AEP and David A. Littell, JD, ChFC®, CFP®)
We discuss why executive benefits are critical to the executive’s retirement planning picture and provide an overview of the types of benefits available. We then discuss in-depth all of the key considerations in choosing to participate in a company’s salary reduction type nonqualified deferred compensation plan.
How do nonqualified executive benefits impact retirement planning? (Part 2)
(Albert J. "Bud" Schiff, MSPA, CLU®, CAP®, AEP and David A. Littell, JD, ChFC®, CFP®)
We discuss trends in employer provided nonqualified supplemental executive retirement plans (SERP), the funding of benefits, and the critical issue of benefit security with nonqualified benefits.
How can a Section 162 bonus life insurance plan benefit executives?
(Albert J. "Bud" Schiff, MSPA, CLU®, CAP®, AEP and David A. Littell, JD, ChFC®, CFP®)
We discuss how Section 162 plans are making a comeback, why they offer a valuable benefit to executives and how they work.
What common welfare benefits are provided to executives today?
(Albert J. "Bud" Schiff, MSPA, CLU®, CAP®, AEP and David A. Littell, JD, ChFC®, CFP®)
We discuss several types of additional benefits that executives commonly receive including salary continuation benefits, life insurance benefits, and long-term care insurance.
What types of equity-based programs are being offered to executives today?
(Albert J. "Bud" Schiff, MSPA, CLU®, CAP®, AEP and David A. Littell, JD, ChFC®, CFP®)
We discuss the shift away in public companies from stock options toward performance based awards, and review several ways that private companies are rewarding executives for improving the company’s value.
How does the sale of the business factor into the retirement planning of the small business owner?
(Theodore T. Kurlowicz, JD, LLM, CAP®, ChFC®, CLU® and David A. Littell, JD, ChFC®, CFP®)
We discuss the unique retirement planning considerations for the small business owner and learn about the steps required to ensure a secure retirement.
What are the types of vehicles that clients can use to save for retirement?
(David A. Littell, JD, ChFC®, CFP® and Kenn Beam Tacchino, JD, LLM )
An overview of savings options. We learn that there are tax-deferred, tax-exempt, and taxable ways to save for retirement and the merits of each option.
How can employers revise retirement programs to maximize the retirement security of participants?
(David A. Littell, JD, ChFC®, CFP® and Kenn Beam Tacchino, JD, LLM )
In this segment we discuss plan features that can improve participant security in retirement. We touch on auto-enrollment, matching contributions, annuities, longevity insurance, and a Roth option among other topics.
What are the advantages of a solo 401(k) for small business owners compared to other retirement plans?
(David A. Littell, JD, ChFC®, CFP® and Kenn Beam Tacchino, JD, LLM )
In this video we review the beneficial features of solo 401(k) plans, including the Roth option, the ability to borrow, and the higher deductible contribution available in some situations. We learn when the solo 401(k) plan will be a good plan design option for a sole proprietor.
What types of plans should a small business owner consider for retirement savings?
(David A. Littell, JD, ChFC®, CFP® and Kenn Beam Tacchino, JD, LLM )
We look at options for the solo practitioner and the small employer. We learn that the practitioner should focus on the amount he/she would like to save and adminstrative simplicity when choosing a tax advantaged plan.
What is the impact of excessive fees in 401(k) plans and what is being done to resolve this issue?
(Jeff Harris, ChFC®, AIFA® and David A. Littell, JD, ChFC®, CFP®)
We discuss the impact of excessive 401(k) fees and learn about ways that both the employer and plan participants can protect themselves.
What does behavioral finance research tell us about designing qualified retirement plans?
(David A. Littell, JD, ChFC®, CFP® and Kenn Beam Tacchino, JD, LLM and Somnath Basu, Ph.D.)
We discuss some modifications to employer sponsored retirement plans to increase success.
Why do people have difficulty making investment decisions?
(Kenn Beam Tacchino, JD, LLM and Somnath Basu, Ph.D. and Joshua Weiner, Ph.D.)
A discussion of what keeps people from making appropriate retirement investment decisions. We learn about the reasons why people invest poorly.
How can findings from behavioral finance research help us understand and motivate clients to make good retirement decisions?
(David A. Littell, JD, ChFC®, CFP® and Kenn Beam Tacchino, JD, LLM )
In this video we discuss research that shows that many individuals are not making optimal retirement decisions. We learn strategies that will help clients in their decision making process.
How does human capital affect savings decisions?
(Kenn Beam Tacchino, JD, LLM and Moshe Milevsky, Ph.D.)
A discussion of the relationship between career choice and investment for retirement. We learn that the job a client holds should be factored into their thinking about investing for retirement.
How does tax efficient investing factor into investment decisions in qualified plans and IRAs, Roth accounts, and taxable investments?
(David A. Littell, JD, ChFC®, CFP® and Walt Woerheide, PhD, CFP®)
We discuss from a tax perspective which types of investments are best suited for taxable (e.g. brokerage), tax deferred (e.g. IRA) or tax exempt (e.g. Roth IRA) accounts. We learn that some vehicles are better suited for bonds and others for stocks.
What are some aspects of portfolio theory construction and management?
(David A. Littell, JD, ChFC®, CFP® and Kenn Beam Tacchino, JD, LLM )
In this video we discuss some important points about portfolio construction theory. Topics include flooring, and the importance of communication with your clients.
How do taxes affect asset allocation?
(Dr. William Reichenstein, CFA and David Nanigian, Ph.D. and David A. Littell, JD, ChFC®, CFP®)
In the traditional view of calculating asset allocation, taxes are not considered. We learn about a better model that considers taxes in this calculation.
In a tax-deferred account what percent of principal is effectively owned by the individual investor?
(Dr. William Reichenstein, CFA and David Nanigian, Ph.D. and David A. Littell, JD, ChFC®, CFP®)
When a client has both stocks and bonds, determining the appropriate asset location is critical to maximizing the value of the portfolio. We learn principles that help the advisor choose which types of investments are best held in tax advantaged retirement plans (both tax-deferred and tax-exempt) and which are more appropriate to hold in taxable accounts.
How should Social Security and defined-benefit plans affect asset allocation?
(Dr. William Reichenstein, CFA and David Nanigian, Ph.D. and David A. Littell, JD, ChFC®, CFP®)
Social Security and defined benefit plan income has the investment characteristic of a bond. We learn how these sources of income should impact the asset allocation of a retirement portfolio.
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