75% of participants want financial planning guidance
Retirement Participants Want Help with Financial Planning
Market volatility, the rising cost of living, fears of not having saved enough for retirement, and concern about Social Security are among the financial topics weighing on the minds of retirement plan participants.
A recent study by John Hancock* found:
- U.S. households are feeling pinched. Even among households earning more than $250,000, 30% are living paycheck to paycheck.
- The share of employees that would like help with financial planning rose to 75% from 73%
- Nearly 80% of people surveyed said they could use help choosing investments.
What can plan sponsors do?
- Partner with your financial advisor to educate employees about ways to combat inflation and plan smartly.
- Contact your recordkeeper about their existing financial wellness programs and ways to promote them.
- Communicate regularly with employees about their financial needs.
If you’d like more ideas about helping to address participant concerns, reach out to your SRC account representative.
–Chris Oneal, President, Stones River Consulting
DOL AND LEGISLATIVE CORNER
The IRS’ 2023 Contribution Limit Increases Offer a Unique Opportunity for Savers to Boost Retirement Accounts
The adjustments were so significant that The Wall Street Journal noted that it’s the “largest increase ever in terms of dollars and percentage,” just under an unprecedented 10%.
A $2,000 increase will raise the 401(k) and 403(b) contribution limit from $20,500 to $22,500, and the catch-up provision for participants aged 50 or over will increase from $6,500 to $7,500, totaling $30,000 in employee contributions alone.
Annual IRA contributions increased to $6,500 from $6,000, and the catch-up provision remained unchanged at $1,000.
The amount individuals can contribute to their SIMPLE retirement accounts is increased to $15,500, up from $14,000.
These increases are meaningful and offer plan sponsors and advisors a chance to open discussions with participants about how to save more.
Important Deadlines to Remember
- 15: ERISA extended deadline for distributing Summary Annual Notices (SARs) to participants. (TPA, Plan Sponsor)
- 31: IRS deadline for correcting all other compliance issues such as 415(c) Excess Annual Additions, Top Heavy contributions, and 404(a)(3) Employer Deductibility. (TPA, Plan Sponsor)
- 31: IRS deadline for participants to take Required Minimum Distributions (RMDs). (TPA, Plan Sponsor)
- 31: IRS deadline for processing corrective distributions due to a failed Actual Deferral Percentage (ADP) or Actual Contribution Percentage (ACP) test with the 10% excise tax or correcting failure with a Qualified Nonelective Contribution (QNEC). (TPA, Plan Sponsor)
- 31: Deadline to convert an existing 401(k) plan to a Safe Harbor plan using a 4% nonelective contribution for 2021. (TPA, Plan Sponsor)
7 Signs Your Retirement Plan Needs an Upgrade
Retirement plans can be very complex if plan sponsors don’t have the right partner by their side to help navigate the ins and outs.
Stones River Consulting created a new guide titled, 7 Signs Your Retirement Plan Needs an Upgrade, that helps plan sponsors understand:
- What the four critical areas of a retirement plan are that need to be properly managed to maintain a successful retirement plan.
- Warning signs that a plan may be in danger of falling outside of compliance.
- How to get help to maintain a compliant retirement plan that benefits both the plan sponsor and its employees.
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