Inside The Plan With The 401(k) Brothers

In this episode of "Inside the Plan with the 401(k) Brothers", hosted by Bill and Andy Bush, the hosts discuss the impact of inflation on household budgets and the psychology of spending and saving. They touch upon various points made by financial writer Morgan Housel, exploring the two ways money can be used: as a tool for a better life or as a yardstick for measuring status.

Episode Highlights:

·         01:26: The hosts delve into how inflation is impacting household budgets, shedding light on the challenges rising prices pose to personal finances and purchasing power.

·         02:54: Despite a slight cooldown, the hosts note that prices aren't dropping rapidly. The conversation highlights recent news about inflation surpassing expectations and its continued effects.

·         05:29: The hosts discuss the struggles of their college-bound children in a high-inflation era, especially regarding the increasing cost of groceries from their personal experiences.

·         07:44: Building on Morgan Housel's insights, the hosts explore the psychological side of spending. Money is viewed as both a tool for a better life and a status measure, prompting a discussion on mindful financial habits.

·         09:43: Referencing Warren Buffett's wisdom, the hosts discuss money's dual role as a yardstick for status. They stress the importance of striking a balance between spending and saving for a secure financial future.

·         11:16: The conversation shifts to the psychology of desire and scarcity, exploring how the longing for what can't be had influences consumer behavior and perceptions.

·         14:56: Introducing the concept of discerning between "nice" and "fancy" purchases, hosts advocate for considering the value and utility of acquisitions rather than focusing solely on price tags.

·         16:37: Reflecting on the relative nature of wealth, the conversation explores the dangers of constant comparison. The importance of gratitude and contentment with one's financial situation is highlighted.

·         18:32: The hosts emphasize the need for balance between immediate enjoyment and saving for the future, underscoring the significance of making mindful financial decisions.

·         20:49: Introducing the concept of hormesis, the hosts discuss its application to personal finance. They draw parallels between applying stressors for financial growth and maintaining a healthy lifestyle.

·         22:56: The hosts reiterate the need for balance and emphasize the importance of maintaining a healthy financial balance for overall well-being.

Key Points:

1.    The hosts discuss the challenges posed by inflation on household budgets, emphasizing its impact on personal finances.

2.    Exploring insights from Morgan Housel, the hosts delve into the psychological aspects of spending and saving, emphasizing the dual nature of money as a tool and a status measure.

3.    Throughout the conversation, the hosts stress the importance of finding a balance between present enjoyment and future financial planning, advocating for mindful spending and savings.

Tweetable Quotes:

·         "Inflation isn't just numbers on a chart; it's shrinking personal budgets. Your dollar won't stretch as far as it used to." - Bill

·         "Comparison can be a motivator or a joy thief. Cultivate gratitude for where you are and aspire wisely." - Andy

·         "Nice stuff vs. Fancy stuff: Understand the value, not just the price tag. Your choices reflect your financial health." - Andy

Resources mentioned:

·         Horizon Financial Group

In this episode of "Inside the Plan with the 401(k) Brothers", hosted by Bill and Andy Bush, the hosts discuss the intersection of behavior, savings, and retirement mindset. They delve into a tool called The Passport® available on the Horizon website, addressing mindsets in various aspects of life, including finances. The conversation is inspired by a piece from Goldman Sachs, exploring optimal mindsets that contribute to better retirement savings.

Episode Highlights:

·         02:58: The speaker discusses findings related to retirement and behavioral factors affecting it, focusing on optimism and future orientation.

·         04:02: Saving for retirement is compared to building habits, emphasizing the need for regular efforts.

·         05:08: Four behavioral factors affecting retirement are discussed: optimism, future orientation, risk-reward orientation, and financial literacy.

·         06:27: The importance of understanding individuals' backgrounds and environments in financial literacy discussions is mentioned.

·         07:24: Top 10 takeaways from a survey are shared, starting with the disconnect between retirement intentions and savings outcomes.

·         08:46: The correlation between optimal behaviors (optimism, future orientation, etc.) and easier retirement preparation is discussed.

·         09:53: Optimistic individuals tend to take more action, emphasizing the importance of proactive financial planning.

·         10:55: Savers threatened by the financial vortex seek professional help, showing interest in automatic features and guaranteed income options.

·         12:14: Savers with lower financial literacy are more action-oriented, highlighting the need for informed actions with financial education.

·         13:40: Traits common in vulnerable savers include low optimism, low future orientation, low financial literacy, and a risk-focused mindset.

·         15:20: Product preferences align with retirement mindset, with action-oriented individuals seeking a broader range of services and tools.

·         16:46: A positive view of the future reinforces motivation to save, emphasizing the importance of knowing what you're saving for.

Key Points:

1.       The podcast highlights four key behavioral factors influencing retirement planning: optimism, future orientation, risk-reward perspective, and financial literacy.

2.       The importance of aligning intentions with actual savings outcomes is emphasized, suggesting that one's mindset towards the future impact’s retirement preparedness.

3.       The discussion covers the significance of taking proactive actions aligned with a positive outlook, the role of future orientation in saving more, and the impact of financial literacy on informed decision-making for retirement planning.

Tweetable Quotes:

·         "Financial literacy is the compass for retirement readiness – understanding the basics lays the foundation for informed decisions and effective actions in securing your financial future."

·         "Risk and reward evolve with age – recognizing the importance of asset classes over time helps navigate the balance between security and achievement in pursuing financial goals."

·         "The most vulnerable savers share common traits – low optimism, future orientation, financial literacy, and a focus on risk over reward. Building resilience starts with addressing these key factors."

Resources mentioned:

Your Expansion Passport®

Your Walkaway Passport®

Retirement Mindset Matters

In this episode of "Inside the Plan with the 401(k) Brothers", hosted by Bill and Andy Bush, the hosts discuss a year-end financial checklist to help listeners maximise benefits for the current year and prepare for the next. The discussion includes insights on upcoming changes in contribution limits for 2024 and highlights key considerations for individuals to review in their financial lives before the year concludes.

Episode Highlights:

·         01:52: The hosts start discussing the first category: taxes. They emphasize the consideration of deductions to maximize benefits for the year, mentioning options like contributing more to retirement plans or utilizing IRAs and Roths.

·         04:36: The hosts touch on the uncertainty of future tax rates and mention that the current rates are set to sunset in 2025. They highlight the potential for changes in tax brackets and advise listeners to consult with their CPA or accountant for accurate information.

·         05:30: Moving to the investment category, the hosts discuss the importance of reviewing asset allocation during the year-end. They briefly mention the concept of gifting to family members, including the annual limit of $17,000 and the need to file gift tax paperwork for amounts exceeding this limit.

·         06:19: The hosts begin discussing the investment side of the checklist, focusing on asset allocation and the potential need for rebalancing due to volatility in the past year.

·         07:05: Further details on the investment side include reviewing outstanding loans and mortgages, revisiting income and savings needs, and considering dividend distributions, emphasizing the tax implications of such distributions.

·         09:13: The hosts suggest self-employed individuals consider opening a retirement plan and highlight the potential tax advantages. They also mention tax breaks for businesses with under 100 employees, especially under 50, regarding retirement plans.

·         10:19: Moving on to the insurance category, the hosts recommend reviewing insurance plans, including property and casualty, and life insurance. They emphasize the need to adapt coverage to changing life circumstances.

·         13:40: The hosts discuss milestones, focusing on specific ages and corresponding financial considerations, such as catch-up contributions, Social Security decisions, and required minimum distributions (RMDs).

·         16:18: Health-related considerations, including open enrolment, reviewing health plans, and understanding flexible spending accounts (FSAs), are covered in the health category.

·         19:41: In the family category, the hosts recommend contributing to education accounts, considering 529 plans, and making charitable contributions, including qualified charitable distributions (QCDs) for RMDs.

·         21:54: The hosts conclude by encouraging a holistic approach to financial planning, considering both short-term and long-term opportunities. They stress the importance of clear thinking and planning beyond immediate concerns.

Key Points:

1.    The hosts discuss a comprehensive checklist covering taxes, retirement, investments, insurance, milestones, health changes, family, and life changes.

2.    Emphasis on maximizing deductions, contributing to retirement plans, tax loss harvesting, and considering potential changes in tax rates. Consultation with a CPA is recommended.

3.    Retirement actions key points include maximizing 401(k) contributions, exploring Social Security filing strategies, and considering additional retirement plans for the self-employed.

Tweetable Quotes:

·         "Year-end financial planning is like a short-term roadmap, but don't forget to zoom out and plan for the next three years—think holistically about your life and financial goals."

·         "Consider tax strategies like maximizing deductions, retirement actions such as optimizing 401(k) contributions, and thoughtful gifting to family members within the annual limit for a well-rounded year-end financial plan."

·         "Reviewing insurance, milestones, health changes, and family matters in your year-end checklist can ensure you're financially prepared and protected. Consult with professionals for accurate advice tailored to your situation."

Resources Mentioned

·          Horizon Financial Group

·          Last Chance Financial Checklist

·          2023 Key Financial Data

In this episode of "Inside the Plan with the 401(k) Brothers", hosted by Bill and Andy Bush, the hosts provide insight about the contribution limits of 2024 to know what you're getting into for the upcoming year which IRS announce every year around this time.

Episode Highlights:

·         01:04 Discussion on inflation-indexed contribution limits, highlighting that most plans saw an approximate $500 increase from 2023 to 2024, with 401K plans moving from $22,500 to $23,000.

·         02:13 No change in catch-up contributions for 2023 and 2024, remaining at $7,500, leading to a total limit of $30,500 for eligible participants in 401K, 457, and certain 403 B plans.

·         04:10 Individual IRA limits also rose by $500 to $7,000 for 2024, and the catch-up contribution remained at $1,000, totaling an $8,000 potential contribution for those turning 50.

·         05:08 Eligibility for contributing to a Roth IRA in addition to a 401K depends on modified adjusted gross income (AGI). In 2024, single individuals earning less than $146,000 or married couples filing jointly earning less than $230,000 can contribute to both.

·         06:49 For traditional IRAs, if you're covered by a retirement plan at work, the deductible contribution income limits are lower: less than $77,000 for singles and less than $123,000 for married filing jointly.

·         07:23 Contributions to a traditional IRA without tax deductions must be tracked as after-tax contributions to ensure taxes are not paid upon withdrawal for the contribution amount.

·         08:52 The hosts reflect on the tendency of individuals to focus on financial planning towards the end of the year, emphasizing the importance of progress towards a secure financial life.

·         11:22 The hosts suggest stepping back to gain perspective on one's financial journey and the importance of planning, rather than only dealing with day-to-day needs.

·         12:53 The hosts discuss the passport package for self-assessment, highlighting different mindsets between those under and over 45 years of age. The assessments are based on the work of Carol Dweck on growth versus fixed mindsets.

·         14:22 They introduce the Horizon Financial Group's website where listeners can take the passport assessments – 'Expansion Passport' for those under 45 and 'Walkaway Passport' for those over 45.

·         15:56 The hosts encourage listeners to step back from daily life and evaluate their mindsets, suggesting this tool can aid in identifying areas for growth.

Key Points:

1.    For 2024, the contribution limits for 401K plans have increased by $500 from the previous year, now standing at $23,000, with the catch-up contribution remaining at $7,500, making a total of $30,500 possible for those eligible.

2.    Individuals with a modified AGI below specific thresholds can contribute to a Roth IRA in addition to their 401K.

3.    The hosts emphasize the importance of assessing one's financial mindset and introduce a self-assessment tool called the passport package, which helps individuals gauge their financial health and progress towards goals, with distinct versions for those under and over 45 years of age.

Tweetable Quotes:

·         "Get ready for 2024! Most 401(k) plans are upping the ante with contribution limits increasing by about $500. Time to max out your financial growth!”

·         "Whether you're aiming for a Roth IRA or sticking to traditional, knowing your AGI can unlock new opportunities for your retirement contributions in 2024.”

·         "End the year strong by reflecting on your financial journey. Take the 'passport' to assess your mindset – are you growing or just going with the flow?”

Resources Mentioned

·         Horizon Financial Group

In this episode of "Inside the Plan with the 401(k) Brothers", hosted by Bill and Andy Bush, the hosts provide insight into the hosts' their experiences with money and financial responsibility, highlighting the values they learned from their upbringing.

Episode Highlights

·         02:08: Bill and Andy emphasize that nothing was ever handed to them, and they had to go out and earn their own money from an early age.

·         03:57: Bill and Andy highlight their commitment to making prudent financial decisions and investing in their own assets, such as their home, as a long-term financial strategy.

·         04:46: This segment of the episode touches on the importance of timing in financial decision-making and how individual circumstances and perspectives can affect stress levels and financial choices.

·         05:28: The hosts discuss the intriguing age range of 53-54 mentioned in the Wall Street Journal article as the time when people tend to make their best financial decisions. They express curiosity about why this particular age range is considered optimal for financial decision-making.

·         06:21: Bill talks about the evolution of financial decision-making as individuals grow older and gain a better understanding of the complexities and risks associated with financial choices.

·         06:48: The hosts mention that people make fewer mistakes at this age because they have accumulated a significant amount of life experience and knowledge over the years. This learning process has become deeply ingrained in their decision-making.

·         07:52: Bill and Andy acknowledge the importance of recognizing that one's "runway" in life is not as long as it once seemed, prompting a desire to get their financial affairs in order, particularly in preparation for retirement.

·         09:10: The hosts discuss their experiences with market ups and downs, emphasizing the importance of learning from these experiences.

·         10:13: The hosts emphasize that people often underestimate how long they will live, and they stress the importance of planning for a potentially lengthy retirement. They highlight that retiring at 65 could mean having 30 years of retirement life ahead, so financial planning should account for extended longevity.

·         11:43: Bill and Andy advise increasing retirement contributions, especially when major debts, such as car loans or credit card debt, are paid off. This ensures that extra funds are directed toward building a more substantial retirement nest egg.

·         13:57: The idea of making thoughtful financial choices that align with one's current and future priorities, particularly as individuals approach retirement and experience changes in their life circumstances.

·         14:04: The hosts wrap up the discussion by highlighting the article from the Wall Street Journal titled "The Exact Age When You Make Your Best Financial Decisions." They recommend it as a quick and worthwhile read for gaining insights into the topic.

·         15:34: Bill and Andy emphasize the importance of preparing for the next several years, including the next five, ten, and fifteen years. They acknowledge that financial mistakes are inevitable, but with wisdom and preparedness, individuals can recover more quickly from setbacks and avoid taking excessive risks.

Three Key Points

1.    The hosts discuss their decision to stay in their current house instead of selling and moving to a more expensive place, highlighting how such a decision reduced potential stress levels. They reflect on how everyone experiences stress differently based on their circumstances and perspectives.

2.    People in their 50s have likely experienced market downturns and economic challenges, which can be valuable learning experiences. Younger investors may not have encountered such financial setbacks, whereas those in their 50s have had the opportunity to learn from past market fluctuations.

3.    Bill and Andy highlight the value of resources like the Wall Street Journal article and the importance of continued learning and financial awareness, especially as individuals navigate their "runway decade" leading up to retirement.

Tweetable Quotes

·         “In their teens and 20s, Bill and Andy were more idealistic and less understanding of how things work. They describe this phase as a time of having false hope and engaging in what they call "magical thinking," where they believed things would work out without fully realizing the risks involved.”

·         “By the time people reach their 50s, they often no longer feel the need to impress others. Instead, they focus on personal improvement and making choices that enhance their own lives.”

·         “Market experiences can be valuable lessons and that maintaining a balanced perspective on investment is crucial.”

Resources Mentioned

·         Horizon Financial Group

In this episode of "Inside the Plan with the 401(k) Brothers", hosted by Bill and Andy Bush, the hosts discuss various topics including the hot weather of August, the anticipation of cooler weather, and the upcoming football season. They mention the excitement for college football, particularly focusing on the LSU Tigers and their strong performance last season. Bill and Andy discuss the unpredictable nature of life and draw parallels between unforeseen events in sports and retirement planning.

Episode Highlights

·         01:57: The hosts draw a parallel between this anticipation for football and the anticipation that individuals have for retirement.

·         02:41: People often look forward to specific events, such as counting down the weeks to certain occasions. Bill and Andy emphasize the importance of anticipation in both football and retirement planning.

·         02:48: Bill and Andy reiterate their high hopes for LSU's success in the upcoming season, highlighting that these hopes are shared not only by fans but also by Coach Kelly, the coaching staff, and the players.

·         04:12: Even when individuals are healthy and making good decisions, unexpected things can still occur.

·         04:47: Retirements, like football seasons, don't always go as planned, and individuals may face situations that necessitate continued work. Some retirees might need extra income or insurance, prompting them to stay employed.

·         05:30: The hosts emphasize the need to balance high hopes and optimism with a dose of reality. They stress that planning should account for potential setbacks and challenges, and individuals should be prepared for things not going perfectly.

·         06:40: Bill and Andy emphasize the need for individuals to have financial advisors who can identify blind spots and guide them through their financial journey, much like a football coach guiding players on the field.

·         07:24: Just as a football team needs to strike a balance between aggressive and conservative plays, individuals should aim to strike a balance between growth and security in their investment approach.

·         09:00: Bill and Andy compare football plays to investment choices, highlighting that overly conservative or overly aggressive approaches can lead to unfavorable outcomes.

·         11:02: Just as a football game requires a well-rounded game plan, a fulfilling retirement requires careful consideration of various elements that contribute to a well-rounded and purposeful life.

·         12:24: The hosts mention their mother's active social life as an example of how staying engaged with family and friends contributes to a vibrant retirement.

·         14:02: Bill and Andy discuss the concept of control in retirement planning, comparing it to the control that football players have over their game and performance.

·         16:05: Bill and Andy emphasize the importance of having purpose and activities in retirement beyond just financial planning, drawing parallels to the enjoyment of leisure activities and social interactions.

·         17:08: The hosts reiterate the importance of having a plan for retirement, just like a football team has a game plan. They emphasize the need to consider both the high hopes and potential challenges that retirement may bring.

Three Key Points

1.    Just as a sports team must have contingency plans for unexpected challenges, individuals need to account for unforeseen circumstances in their retirement plans.

2.    Bill and Andy highlight the importance of diversification, managing risk, and balancing growth potential with security.

3.    Bill and Andy highlight the multi-faceted nature of retirement planning, where financial preparation, risk management, and quality of life considerations all play crucial roles, similar to the various elements in a football game plan.

Tweetable Quotes

·         “Sense of anticipation underscores the importance of planning for retirement, just as fans eagerly await the start of a football season.” – Bill

·         “Just as a football team doesn't simply show up on the first day of the season without prior preparation, individuals also need to engage in forward-thinking and planning to ensure a successful retirement.” – Bill

·         “Learning from mistakes and being open to adjustments are key to both successful football strategies and effective retirement planning.” – Andy

·         “Retirement could last for decades, and individuals need to plan for potentially living well beyond average life expectancies.” - Bill

Resources Mentioned

·         Horizon Financial Group

 The podcast "Inside the Plan with the 401K Brothers" is hosted by Bill and Andy Bush. In this particular episode, they have invited special guests who are young individuals in their early and mid-twenties: Robert Burke, Kaitlyn Williamson, and Savannah Henry. The hosts believe it's important to discuss retirement savings with younger generations and bring fresh perspectives to the topic. They acknowledge that people may be tired of hearing from older individuals like themselves and believe it's valuable to hear from younger voices.

Episode Highlights

§  01:38: The hosts ask the guests, particularly Robert, about their thoughts and perceptions on saving for retirement, considering they are just starting their careers.

§  02:13: Robert, who has been working for almost two years, shares that he has noticed a lack of financial literacy among his generation.

§  02:33: Robert mentions that while TikTok can be a source of both good and bad information, he believes that being in a place like Horizon provides him with reliable education and guidance on the right way to save for retirement.

§  03:57: The lack of financial literacy can lead young people to believe they are making the right decisions when, in reality, they may be making mistakes.

§  04:32: The hosts mention a personal anecdote about their own experiences with retirement savings early in their careers.

§  05:47: The specific investment choices within the plan are not as critical as the savings rate itself.

§  06:40: The guest emphasizes the importance of at least contributing enough to receive the employer match in a 401(K) plan.

§  07:58: Savannah shares her experience of having two previous jobs, where she simply checked the box and contributed a certain percentage to the retirement plan without much thought or awareness.

§  09:00: Savannah shares that her dad played a significant role in emphasizing the importance of maximizing her contributions. She acknowledges the lack of financial education in high school and college but expresses gratitude for her father's guidance, even though, at times she felt overwhelmed by the advice.

§  09:59: Bill and Andy discuss the importance of budgeting and how it can be a challenging adjustment for someone entering the workforce.

§  11:30: The guest mentions the shift in mindset from wanting unnecessary things to prioritizing essential expenses such as car insurance and gas. Bill and Andy highlight the importance of discerning between wants and needs and making conscious spending decisions.

§  13:11: Kaitlyn discusses the use of technology in personal finance, mentioning the use of budgeting sheets and saving money.

§  13:15: Kaitlyn highlighted the importance of retirement plans and the value of having a financial advisor to guide one's financial decisions and ensure money is allocated appropriately.

§  16:32: Kaitlyn mentioned that she has heard conflicting opinions about whether to take risks when young or avoid them until later in life.

§  17:26: Kaitlyn mentioned that her parents have been supportive and helped cover many of her expenses, so the idea of being responsible for rent, phone bills, insurance, car payments, and other costs is daunting.

§  20:22: Andy and Bill encouraged young professionals to be curious, ask questions, and seek out resources to improve their financial literacy.

Three Key Points

1.    Adopting a passive investment philosophy, rather than an active approach, tends to work better because paying too much attention to the market can lead to more losses than gains.

2.    Bill and Andy discuss the challenges and responsibilities that come with entering adulthood, such as managing bills, rent, insurance, and retirement plans.

3.    Andy and Bill emphasized that it's okay to admit when one doesn't understand something and that asking questions is crucial in the learning process.

Tweetable Quotes

§  "Financial education is not commonly taught in high school or college. Working in the industry has changed his perspective on the importance of starting to save for retirement at an early age." - Robert

§  "Creating positive financial habits now will benefit your future self." - Robert

§  "Financial literacy is not just taught in school, it's a lifelong pursuit. Be proactive in improving your knowledge." - Savannah

§  "Your financial journey begins with saving and budgeting. Take control of your expenses and prioritize your goals." - Kaitlyn

§  "Embrace curiosity, learn about investments, and make informed decisions for your financial future." - Bill

§  "Consult with a qualified financial professional for personalized advice tailored to your unique circumstances." - Andy

On today's episode of the "Inside the Plan with the 401(k) Brothers", host Bill Bush and Andy Bush, advisors at Horizon Financial Group, will talk about the distribution phase of retirement. They talk about the 4% rule, i.e., the withdrawal rate that suggests you wouldn't outlive your funds once you retire.

Episode Highlights

·         02:05: Bill and Andy talk about popularly known withdrawal rate strategies with different asset allocations and looked back at historic returns and came up with the idea that if you started your first year of retirement withdrawing 4% in most models your savings would last 50 years or more.

·         02:35: You can't take a percent to the grocery store, so you got to do some of the math to say, well, if I had $100,000, what's 4% of that.

·         03:48: Bill and Andy discuss about the rate of inflation. They suggest if you had a 2% inflation, you just add that on from the 4% you started within year 2.

·         04:30: If there happens to be deflation, you could back out the 2%.

·         05:20: There was a sweet spot in the percentage of stocks and bonds. So that sweet spot tended to be kind of a 60-40 portfolio.

·         06:04: If you had a million dollars, 20% is $200,000 and if you saw your portfolio go from $1,000,000 down to 800,000 and you were entering retirement, it would be very uncomfortable.

·         07:25: That is what folks have to get their arms around entering into retirement, they need to understand there is the day you retire, or you are not taking all the chips off the table and moving everything into the safest instrument.

·         07:48: If you retire at 65 and you are married, there is a 50 % percent chance that one of you lives to 90 and that’s a decent chance.

·         09:30: Bill and Andy talk about cash build-up that is available to get you through some of the tough times without having to tap into some of the equities while they have been depressed.

·         10:35: In 2022, you had the stock market and the bond market both down double digits and you also had inflation raging. So, if you were retiring in 2022 and that was your first year of retirement, not only were your assets declining, but you also had to if you factor in the inflation part, you know your dollar didn't go as far.

·         11:46: While the market did its horrible thing in the late 1920s and early 30s. It eventually would catch up, looking back historically, but the inflation side was a big wallop in the 70s.

·         12:17: Bill explains how inflation is the silent killer. If you don't plan and prepare for It can just destroy your savings.

·         13:47: If you are born after 1960, your RMD is now 75. So, if you are retiring in your 60s, mid 60s and you start drawing money from your savings, you are going to be whittling down that balance before 75.

·         14:41: What it comes down to the government you were putting money in pretax all this time and it grew tax deferred all this time, and they want to make sure that the taxable revenue is coming back.

·         15:38: What is inflation going to do? What is the market going to do in the next 30 years? When is the last day you are going to be on the planet?

Three Key Points

1.    Bill and Andy explain how you really must save a good amount of money if you utilize the 4% rule.

2.    Bill and Andy share how using the 4% rule, those that retired in or around 1929, their portfolio still survived the full 50 years.

3.    The purpose of this episode is to get you thinking about eventually, you are going to be pulling dollars out, and you got to get intentional about that.

Tweetable Quotes

·         "In retirement, you won't be earning anymore, but you need some source to be able to pay for lights and gas and food and all the other things that you pay spend money on." – Bill

·         "Even as a non-retired person, when I've seen My Portfolio go down like, hey man, this stinks, you know, and you start to go through the emotions, and you start to have the thoughts of maybe I am doing something wrong. Even as a financial advisor, it is great if you put some perspective on it." - Andy

·         "Market can fluctuate from time to time, but over long periods of time, there is an average annual return." - Bill

Resources Mentioned

abush@horizonfg.com

bbush@horizonfg.com

·         Horizon Financial Group

In today's episode of the "Inside the Plan with the 401(k) Brothers", host Bill Bush and Andy Bush, advisors at Horizon Financial Group are going to introduce the newest member of the Horizon retirement plans, John Lensing..

Episode Highlights

·         01:22: Bill says that they wanted to make sure that everyone gets an advisor to speak to and that they service their plans very well.

·         01:58: John shares how long he has been in the retirement plan space.

·         03:12: John will be picking up anything that needs to be done around here, from doing the benchmarking services to speaking to participants about their most straightforward financial issues and how people can be financially secure.

·         04:36: John has interacted with a lot of participants. He probably understands whatever story or situation you may be in. He will have the knowledge to help guide you through that.

·         05:28: As per Bill, one of the things they pointed out on this podcast is that for many employees, the 401K advisor may be the only advisor they have immediate access to or even know personally.

·         06:18: What we talked about with one of our bigger plans was becoming financially secure, says Bill.

·         06:56: 66% of Americans believe open conversations about money are keys to financial freedom, 62% keep their lips shut when it comes to talking about their finances, and the silence extends to family 63%, friends 75% and even their spot, even their spouse or partner, 46%. Bill talked about becoming financially secure the other day, one of the things we talked about is kind of the psychology and mindset behind that.

·         08:15: You can't go back and change the past. But from this day forward, you can change what the future outcome might be.

·         09:57: John found himself doing an internship and graduated college and was offered a position similar to how they are going to talk about finances.

·         10:40: When it comes to retirement savers, you see that those that are willing to have those conversations tend to have higher participation rates and savings rates.

·         11:44: When you are talking about professionals who are professional advisors on the financial side, Bill's job is not to steer you in a bad direction.

·         13:41: If you are in a position of being financially insecure, you need to establish a belief in yourself.

·         14:31: As per John, Andy certainly has a mindset about momentum and momentum and financial security and insecurity for most of us, we can't sit on the sidelines.

Three Key Points

1.    John shares his views about retirement plans and what he likes about it.

2.    John shares what attracted him to the retirement planning industry and why he sought this field.

3.    In some workplaces having a little chatter about money might be good, but it might also lead you to a bad decision in the sense of making a bad investment.

Tweetable Quotes

·         "People want to have a conversation; they need some perspective, and they need their emotions calmed a little bit." - Bill

·         "This is an opportunity for me to get to know some new people but bring some old stories." - John

·         "I might need some help and assistance, whether it's just understanding and learning about what you possibly could do in the future." - Bill

Resources Mentioned

·         Horizon Financial Group

·         Podcast Editing

·         jlensing@horizonfg.com

·         bbush@horizonfg.com

·         abush@horizonfg.com

In today's episode of the "Inside the Plan with the 401(k) Brothers", host Bill Bush and Andy Bush, advisors at Horizon Financial Group talk about their recent trip to San Diego for the National Association of Plan Advisors Summit, and share some stats from one of the presentations.

Episode Highlights

·         01:19: Spring has sprung and are folks looking forward to the summer and hopefully an improved economic climate.

·         01:32: One of the presentations that they did see at NAPA was, what is the American worker thinking right now and experiencing as you overlap that onto what's going on in the economy, especially as inflation hits everyone.

·         02:09: When you kind of look at across the board, there is a greater portion of folks that feel like their financial independence is in jeopardy.

·         03:13: There have been plenty of surveys and studies that have shown that the more financially stressed workers are the less productive they are.

·         04:08: If you have debt that was introduced to you last year when rates were rising. You know it's a higher interest rate and so getting rid of that as soon as you possibly would be great.

·         06:06: Inflation of expenses is going up and some people realize, I may as well just earn the dollars to pay my bills rather than pulling them out of my retirement savings.

·         06:50: 65% of the folks that were surveyed said they would rather have a concrete plan to know how to spend their later years, so that they could know not only the monies they would spend, but how they are spending their time and energies.

·         08:20: Bill and Andy discuss how people realized there was some benefit to staying at the job instead of going and chasing after something else.

·         09:39: Bill and Andy always like to remind folks to use the tools you have available inside your plan, be surprised at how many folks don't even set up an online access username and password and maybe don't even check their balance or kind of where their holdings are.

·         10:46: Bill and Andy have a whole series on how different generations look at finances.

·         11:29: Some people have family relationships or social relationships that are strained. Bill and Andy discuss how mental health affects financial health.

·         14:18: Bill and Andy talk about the importance of financial planning and why one should hire a financial advisor.

·         16:40: Andy doesn't want to feel strapped or stretched or stressed from finances.

·         17:24: If you have a 401K plan at your work, and you are not getting the education you feel like you deserve or need, reach out to the plan sponsor or providers and ask for it.

Three Key Points

1.    Bill and Andy talk about retirement savings and the importance of it.

2.    Bill and Andy discuss how millennials are managing their own finance.

3.    90% of workers indicated that their employer should be involved in retirement education.

Tweetable Quotes

·         "Folks tend to be a little less confident about their independence, their financial independence or their retirement." - Bill

·         "Concentrate on the things we can control rather than those items out there that we cannot control." – Bill

·         "The current climate we are in has certainly really made folks have to be intentional, about their financial lives, whether they wanted to or not because prices go up." - Bill

Resources Mentioned

·         Horizon Financial Group

In today's episode of the "Inside the Plan with the 401(k) Brothers", host Bill Bush and Andy Bush, advisors at Horizon Financial Group are going to talk about the concepts of living long and prospering. They discuss about the importance of saving and proper planning for your retirement.

Episode Highlights

·         02.38: It is very hard to visualize what aging has, what the effect of aging is on our bodies as we go forward.

·         04.18: How you behave is much more important than having a finance degree or the things that you exercise to actually get ahead financially.

·         05.18: People often overlook when they take their social security and make it sure it's going to be around for a while or look at other guaranteed income sources to make sure that they have monies available to them.

·         06.43: Things are constantly changing in terms of the rules and regulations around RMD's and then of course, there is the social security thing to get around about when you are going to file strategically.

·         08.16: Planning retirement is for those whom you love, you should go through some planning to plan forward as if, hey, we are going to be around.

·         10.15: When we talk to plan participants in their 401K plans and other retirement plans, we often say hey, make sure you use the tools that you have available.

·         11.11: Andy talks about a book by Arthur Brooks. It is about making that transition from kind of the prime of your career to becoming going into where your faculties become less bright.

·         14.35: Andy and Bill talk about goal setting and how important it is.

Three Key Points

1.    Bill and Andy talk about the importance of retirement planning and how important it is.

2.    Bill and Andy discuss the importance of social aspects and communion with someone else and how important that is.

3.    The importance of health is being healthy and being financially healthy.

Tweetable Quotes

·         "If we behave well, we will probably be more healthy in retirement not maybe not more healthy than we are now but healthier than we would be if we made bad decisions." – Andy

·         "I tell folks in retirement plans often, which is right now, you are earning your dollars to pay for the food on the table, the gas in the car, the insurance, and all the other things that you need. There is a time in the future where you will either no longer be able to work, or you no longer will want to work, and you are still going to have to put food on the table." - Bill

·         "I think it is important when you kind of look at longevity is to not underestimate it because you do have to plan that your dollars need to stretch probably longer than you think." - Andy

In today's episode of the "Inside the Plan with the 401(k) Brothers", host Bill Bush and Andy Bush, advisors at Horizon Financial Group share what happened just before the New Year; some sweeping legislation was passed that had to do with retirement plans and retirement savings. It was called the SECURE ACT 2.0 and the “secure” part stands for setting every community up for retirement enhancement.

Episode Highlights

• 11: The secure part stands for setting every community up for retirement enhancement. Secure. 1.0 back then was just the Secure Act, was passed just a couple of years ago. But the new changes, have kind of been in talks for a while, but finally got a chance to move them through the process and got them approved.
• 32: Bill and Andy discuss the provision 331 act - it's the natural disaster. In the Baton Rouge and southern Louisiana areas, we encountered hurricanes in the past five or six years and some historic floods.
• 20: The act was signed on December 29th, 2022. By the way, there are some provisions that actually go into effect retroactively to the tax year 2020.
• 43: Some of the bigger provisions that are going to start taking place here in 2023 are really on the required minimum distributions.
• 30: Another good thing they did is addressing penalties for not taking RMDs. In the past the IRS could penalize you 50% of what you were supposed to take minus what you already did take. Now granted you could appeal that and usually they would alleviate that fine or penalty, but they have narrowed that penalty from 50% down to 25% and then further down to 10%.
• 22: Provision under 601 allows SEP and simple IRA's to be permitted to have Roth.
• 27: Section 304 has to do with distributions the cash-out limit increase the limit from 5000 to 7000, so a plan could roll you out into an IRA if you left that plan.
• 52: Section 314 distributions are penalty free withdrawals for domestic abuse victims.
• 15: Section 110 is the student loan matching program. An employer has to allow for that … it says if an employee has to pay back loans and they are doing that instead of putting dollars into their 401K, the employer can contribute a match of those dollars into the 401k
• 22: In the year 2024 there's going to be a thing called the starter 401K that is in section 121 and so that permits an employer that does not sponsor retirement plan to offer this starter 401K plan and it requires that all employees be default enrolled at 3% to 15%.
• 57: Section 127 is the emergency savings account that is allowed at an employer may offer to non-highly compensated employees and this allows them to kind of earmark a certain percentage of their contributions towards just emergencies, and that's capped out at $2500.
• 19: If you are already putting into retirement, that seems a little bit painless because it comes out of your paycheck. You can also kind of earmark a little bit that goes towards - The Emergency Fund.
• 55: What section 332 does is it allows you to replace the Simple IRA plan with the Safe Harbor 401K during the year.
• 00: In the Simple IRA plan, there were really two ways the employer contributed that. They either did the 2% of compensation, so kind of a non-elective whether the employee did anything or not or they did that 3% match. But SECURE 2.0 allows for more.
• 00: Bill and Andy are expecting to see some more revisions down in the act down the line. They have had the pleasure of being involved and appealing to the legislators in DC, voicing concerns on behalf of participants and plan sponsors

Three Key Points

1. Bill and Andy talk about section 307, which is the qualified charitable distribution rule. They just indexed those after the year 2022, the annual limit or annual exclusion was $100,000, but their indexing those going forward, it does allow for a one-time $50,000 distribution from an IRA.
2. 529 plan beneficiaries would be permitted to roll over unused 529 plans into a Roth IRA.
3. Bill and Andy discuss some of the key provisions that are out there that might impact you or your retirement plan, whether you are a plan sponsor or whether you are a participant.

Tweetable Quotes

• "They tell everyone to don't think of your 401K plan as a savings account for any ordinary type of event, or even a disastrous type of event. Have other savings in place if you can, but that is something that's out there and I know in 2016 that widespread flooding that occurred. Hit just about everybody in the Baton Rouge area. That was a big thing and people needed some dollars to recover from that." - Bill
• "The RMD age has now been bumped up starting in 2023 to age 73. That's the required minimum distribution. - Bill
• "A lot of folks who have already paid their house off and they may not itemize when it comes to taxes." - Andy

Resources Mentioned

• bbush@horizonfg.com
• abush@horizonft.com.
• www.horizonfg.com

In today's episode of the "Inside the Plan with the 401(k) Brothers", host Bill Bush and Andy Bush, advisors at Horizon Financial Group take a look at top financial regrets. There is a certain saying out there and it goes something like this - NO REGRETS. Bill and Andy discuss the top 5 regrets often made by young and old Americans.

Episode Highlights

• 01:41: As per Bill, for most folks if you reach a certain age, probably you do have some sort of regret. If you don't, that's great, but that is very uncommon.
• 03:08: For younger listeners Andy suggests by going through some sort of education and financial planning you can actually start to make great decisions and choices that when you look back when you are 72, then maybe you don't have as many regrets.
• 03:47: Number One Financial regret of older Americans shared by a thumping 57% of those surveyed was not having saved more for their retirement during their working years.
• 05:02: It is a good opportunity to point out that most 401K providers, record keepers, have a pretty robust set of calculators and tools that participants can log into. So, if you haven't used those resources, start using it.
• 06:47: The past is the past, you can't go change that, but you can start to change as you gauge into the future what it's going to look like, and those tools and those calculators do that. They don't give you the exactness of it, but they at least give you a ballpark of what's it going to look like when you are 65 or 70 or and what kind of income you are going to need based on the variables at hand today.
• 07:09: Number 2 on the regret list is not saving enough. Not buying long term care insurance to pay for nursing homes or similar retirement type of community or something along those lines.
• 08:42: As per Andy number 3 regret on the list is 37% of older Americans regret not working longer.
• 11:22: Number 4 is remarkably 33% of older Americans regretted not investing in some sort of guaranteed income.
• 13:11: When planning your retirement ask yourself how are you going to replace your income? Are you doing something to replace your income when you are no longer earning it?
• 13:56: Inside of the investment options there, it's happening more on the bigger mega plans more than it is smaller plans. But you are starting to see the opportunity for a plan sponsor to put in some sort of guaranteed income of sliver for an investment option, says Bill.
• 14:26: Number 5 on the list is about 23% of older Americans claimed social security too early.
• 16:41: If you file and start taking your benefits before what is called your FRA, think of that as a penalty or a haircut on what would have come to you, and if you delay that, you actually get delayed credits.
• 17:53: Healthcare is a big expense the older you get and is often the biggest expense for folks in their 70s and 80s. And so that is trying to be as preventative as you can and lead a healthy lifestyle now before you are retired.

Three Key Points

1. Bill and Andy discuss how saving rate matters and how it is in your control to put away the amount as per your requirement in future.
2. Bill and Andy explain how the cost of insurance of a long-term care policy is a very small solution to a much bigger problem.
3. Before claiming your Social Security, it is important to think about how long you might live? You need to ask that question rather than looking at it as if, well, the government's taking my money all of my working years, and I am going to get it back as soon as I can.

Tweetable Quotes

• "You can learn from the mistakes others have made. I am the youngest of six and I learned so many mistakes from what my older brothers did." - Andy
• "We have talked many times about Social Security and what it will replace in retirement. And for most folks, I think the best-case scenario might be its 40%, but probably not for most people. Most people, it's going to be probably 25 or less percent." - Bill
• "Raise your contribution rate up 1% each year for you know a number of years until you get to a good contribution level." - Bill
• "One of the things that are up and coming in the 401K world is the fact that Recordkeepers will start showing an illustration of what this pool of money might actually mean on a spread-out basis." - Bill

Resources Mentioned

• https://www.horizonfg.com/
• bbush@horizonfg.com
• abush@horizonfg.com

In today’s episode of the “Inside the Plan with the 401(k) Brothers”, host Bill Bush and Andy Bush, advisors at Horizon Financial Group take a look at changes in company retirement plan contribution limits for the coming year 2023 and will compare them with year 2022.

Episode Highlights

• 00:51: It is that time of year, that not only is fall or autumn, but it's the time of year that the IRS looks at contribution limits for the upcoming year and announces changes, if any.
• 01:48: Deferral limit for 2023 is going to be $22,500, an increase of $2000. If you are a participant in a 401K plan or 403B plan, your annual elective deferral limit for 2022 was $20,500.
• 03:44: As per Andy you don't have to wait until you hit 50 in 2023. Anytime you could become 50 and you can put the extra $7500 in all the way through and plan for it throughout the year.
• 04:52: There is a legislation being discussed right now that, authorities will likely even boost the catch-up contribution amounts even further, says Bill.
• 05:19: There is an overall plan limit of the dollars that can go in per individual per and in 2022 it was 61,000 for any individual. If you had the catch up, you could have done 67,500.
• 07:08: When you think about on the employer side of things in SIMPLE IRA, a non- elective employer deferral is 2% no matter what the employee is contributing, or doing or there's a match and it can be up to 3%.
• 08:10: They have changed the definition of highly compensated employee just a little bit based on the dollar amount and that HCE is always looking at the prior year. For HCE it was 135,000 in 2022 and that's moved up to 150,000 in 2023.
• 09:34: As per Andy, the traditional and Roth IRA's have contribution limits. In 2022, those are $6000 but next year they move up to 6500 but the catch-up provision stays the same at $1000.
• 10:20: There are ranges that are involved in traditional IRA contributions to be deductible depending on how you file your taxes and how much you make.
• 12:38: The income phases out range for taxpayers making contributions to a Roth IRA has been increased and it's going between $138,000 to $153,000 for singles, says Bill.
• 13:24: If you are married filing jointly and your modified adjusted income is above the $228,000 you cannot contribute to a Roth IRA in 2023.
• 16:08: When you cross over the 50-year mark, you really start to realize that I'm closer to retirement and I need to get my affairs in order because life is happening so quickly and the opportunities are becoming fewer and fewer, says Andy
• 16:43: All plans,allow you to change your contribution rates at the first of the year. But a lot of plans have other different points where they'll allow you to make changes.
• 17:44 Be intentional about saving rates because saving rates matter. You have the opportunity coming and opportunity is increasing for 2023.

Three Key Points

1. If you are in SIMPLE IRA plan, your elective deferral which you are allowed to make in your plan in 2022 is $14,000, but because of the step up in most everything else ,and the adjustments for inflation for 2023 the elective deferral limit has moved up to $15,500.
2. If the spouse making the IRA contribution and is covered by a workplace retirement, that phase is now increased from $116,000 to $136,000 because after $136k, it’s not deductible.
3. It doesn't matter what your income level is to make a contribution to a Traditional IRA but it does matter what your income level is if you have a workplace retirement plan to get tax deductibility for a Traditional IRA.

Tweetable Quotes

• “It's interesting that inflation happens because you would almost link deferral increases to wage inflation.” – Andy
• “There is definitely more capacity to put away dollars for retirement if you're in a company plan for 2023.” – Bill
• “You pay your social security tax on earnings up to 147,000 in 2022, but next year in 2023 you will pay social security tax on up to $160,200.” - Bill
• “There are also ways you can save for retirement outside of employer sponsored plans and that is IRA's and Roth IRA.” – Bill
• “If you're single filing single and you make more than $153k on your modified adjusted gross income, then you're not allowed to contribute to a Roth IRA.” - Bill

Resources Mentioned

• https://www.horizonfg.com/
• Podcast Editing

In today’s episode of the “Inside the Plan with the 401(k) Brothers”, host Bill Bush and Andy Bush, advisors at Horizon Financial Group take a look at the anatomy of a Recession, define what it is, what causes it and what are some of the traits around it.

Episode Highlights

• 01:30 – Recessions are not identified until they have passed and they've started to pass and leave. So it's kind of a look back to see when, and what causes the recession.
• 03:15 - Recessions are not rare they can occur several times during your lifetime.
• 05:05 – As companies maximize things, employment improves, and so employment has been pretty darn good during the pandemic.
• 07:30 - Interest rates increase and so you see contraction on the credit side of things.
• 09:55 - When it comes to the market, views of the economic activity expansions and contractions are important because it affects your portfolio.
• 11:15 – One of the indicators of recession is unemployment. When unemployment rises, it can lead to a decline in consumption, people going out, buying things, and then that affects the business output.
• 12:30 - Another leading indicator of a recession is Housing depending on their clients. Housing stocks are growing but they're not growing at a bigger rate than they used to.
• 14:30 – In case of uncertainties the first thing is that these things happen, so recognize that throughout your life as it is part of life.
• 16:40 – Inside the 401k retirement plans they tell investors to look at rebalancing their portfolio, or perhaps increase their contribution.

Three Key Points

1. The recession is when you see a declining gross domestic product over a period of a couple of quarters. When people lose their jobs, they're not spending as much, so then you start to see the revenues and earnings of companies coming down. There is a significant decline in economic activity that is spread out across the economy lasting more than a few months, and when you see the GDP drop real income, employment, industrial production, etc.
2. So the most recent grant that came out on inflation was really some areas came down, but some of the more critical areas like food, that everybody needs, we're going up. It's good because typically, as profit margins peak and companies are not making as much profit, they start to in the very layman’s sense trim the fat. They start to let some folks go who are not necessary or critical, and hence they lose their jobs. So what happens when the recession hits low economic activity? You start to see the slowdown and people start losing their jobs.
3. When you look at the consumer’s confidence in the economy when that bottoms out, there's a recession. Unemployment was about a little over five months ahead of a recession. So far, unemployment is at its nearly 50-year low. So on consumer confidence, it's really about three months before a recession, there has been an instance in the past where it had a double bottom so that could be something that we encounter this year.

Tweetable Quotes

• “One of the words we've heard a lot about is uncertain and recession.” – Bill Bush
• “So, we've already seen a couple of quarters of negative GDP.” - Bill Bush
• “The pandemic was a kind of a rare type of situation and in that, everything was halted in the sense for a good while.” – Andy Bush
• “So you start to see the labor market, start to tighten up, and then central bank policy starts to tighten too.” – Andy Bush
• “You start to see expansion GDP growth is positive so that gross domestic product is positive.” - Andy Bush
• “The leading Economic Index is also there when it's declined at least 1% from the previous year, about three and a half months later you start to see a potential of a recession.” - Andy Bush
• “Let’s stay calm, especially if you're fairly young and have a long career ahead, you got to think of the long-term perspective.” – Bill Bush
• “Recessions are natural they happen and they happen every business cycle.” - Bill Bush
• “If you have some worries and fears, we always say worry with us, don't worry alone.” – Andy Bush

Resources Mentioned

• Horizon Financial Group: Website
• Contact Information:  Bill Bush          Andy Bush
• The Runway Decade: Website
• Podcast Editing

In today’s episode of the “Inside the Plan with the 401(k) Brothers”, host Bill Bush and Andy Bush, advisors at Horizon Financial Group talk about HSAs as a Retirement Strategy. They take us through Health Saving Plans which can also act as retirement plans, and these health saving accounts can actually be valuable over time that you can access in retirement. Bill and Andy are going to go through some of the basics and how it might work in your situation.

Episode Highlights

• 01:00 – You can only have an HSA (Health Savings Accounts) if you participate in a certain type of plan which is a high deductible healthcare plan.
• 03:00 - To draw the differences of the catch-up provision in a 401 K plan, that catch-up triggers at age 50. So, you can put more into your 401 k when you are 55.
• 06:00 – One advantage of a flexible spending account is that you can carry over dollars from year after year, and there's no time limit for using the money.
• 08:00 – HSA also covers some of the qualified medical expenses needed to maintain your health or maybe prevent certain health issues.
• 10:20 – Another benefit of having HSA is that not only would you be able to reimburse your future qualified medical expenses, but you can also start to reimburse your past qualified medical expenses and be able to get money out of an account tax-free.
• 12:00 – At the time of retirement if you had a major surgery where the out-of-pocket expense is a lot then if you had the qualified medical expenses balance saved up in the HSA, then you can use that.
• 14:00 - There's a spectrum here of how people use their HSA. So some people enroll in a high deductible plan and don't even use the HSA or they don't contribute.
• 16:30 - People that are in the higher income group, maybe the top 20% or top 40%, their life expectancy is a little longer than those that are in the lower income range.

Three Key Points

1. If you have a high deductible health plan, within HSA or Health Savings Account, you can contribute a pretty good amount into the Health Savings Account. You're still paying your premiums for the High Deductible Health Plan, but you can make contributions to this Health Savings Account and this is the definition of a High Deductible Health Plan. So, for 2022 IRS defines it as a plan with a deductible of at least $1400 for an individual, or 2800 for a family. The High Deductible Health Care Plan can't be more than $7,050 for an individual or 14,100 for a family, per year.
2. If you happen to be a healthy person, and you're in a High Deductible Health Plan that has an HSA, it can be a very valuable tool for you over time. You can reimburse yourself for qualified medical expenses from your HSA but there's no time limit on those medical expenses. So, you can start compiling any medical expenses you had in the past. if you can pay those out-of-pocket, you can do that, but not out of your HSA. Then down the road when you get into retirement, you can come back and reimburse yourself for those medical expenses. Another beautiful thing about the High Deductible Plan is that there is a limit to how much you're going to have to pay for things that are more catastrophic.
3. There was a great study done recently that dropped the spending state savings and spending study and what they saw was two of the top three retiree spending concerns are Health Care Premiums, Insurance Premiums, and Out-of-Pocket Health Care Expenses. People fear having to pay those because it's something they know that they're going to have to pay, but it's way out there in the future.

Tweetable Quotes

• “The maximum amount in 2022 that you can contribute to if you're a single person to the HSA is $3,650.” - Andy Bush
• “The first thing you need to check is if your employer offers an optimal health plan?” – Andy Bush
• “The beauty of HS is that there's just the Triple Tax Advantage.” – Bill Bush
• “A lot of the HSAs have a little card like a debit Fount.” - Andy Bush
• “You can save and this comes in handy for folks that have already maxed out their 401k and are looking for other places to put pre-tax dollars.” – Bill Bush
• “I think finally; Andy's favorite word is wherewithal.” - Bill Bush

Resources Mentioned

• Horizon Financial Group: Website
• Contact Information:  Bill Bush          Andy Bush
• The Runway Decade: Website
• Podcast Editing

In today’s episode of the “Inside the Plan with the 401(k) Brothers”, host Bill Bush and Andy Bush, advisors at Horizon Financial Group talk about the Summary Plan Description of a 401(k) plan. Every participant should have a copy, and each plan's is unique....but what does it include? What's the Plan, Stan? The 401(k) Bros. break it down for you...

Episode Highlights

• 02:40 – First of all, they talk about who's eligible for the plan and what is Summary Plan Description.
• 4:45 – The Summary Plan Description answers all the questions that you might have in your mind and you can then go to the page that would correspond with the answer to that question.
• 06:25 - Article three of the Summary Plan Description gets into employer contributions.
• 08:45 - Some companies will do a Stretch Match where they're kind of stretching you out to make you put in more of your dollars, which is smart because ultimately it's your responsibility of saving for retirement.
• 10:00 - The other thing that is important to check out in the Summary Plan Description is whether you will share in that employer contribution if you leave during the year.
• 11:50 - If your plan is a Safe Harbor Plan, you are 100% invested in any safe harbor contributions that the employer makes as soon as it hits your account.
• 14:20 - There's a list of different hardships, you've got to be eligible for the hardship, you can't just claim that saying that you went through hardship.
• 16:00 – Bill says they have the plan documents on file with them. They can look it up sometimes, it takes a little while to get into the provision, but just use it as a resource.

Three Key Points

1. In all of the plans that they service they take what's the plan document or the adoption agreement which has all the features of the plan. Then they kind of boil that down into 8 to 12 different points that the participant needs to know about the most often asked questions about the plan like when can I get in or get out to the plan. So, every plan has what's called the ‘Summary Plan Description’ which should be available for all participants. They can request it from their HR person or whoever's kind of responsible one in their group for keeping those documents.
2. This is important to understand how is the employer going to contribute to your account, is it through Safe Harbor Non-Elective? If you don't put any dollars on your own, the employer is going to put in money for you that's a non-elective, it could be a Safe Harbor Match. This means for whatever percentage of your income you’re putting into your employer is going to match some percentage of that. So it could be $1 for a dollar up to a certain percentage. So in other words, some are $1 for a dollar for the first 4% others may match your dollar-for-dollar for the first 3%. But then for the next two, they’re only going to do half a percent of 50 cents on the dollar. So, those are Safe Harbor Matches.
3. The other way an employer could contribute is called a Profit Sharing Match or a Profit Sharing Contribution. Profit Sharing Contribution is something that is distributed to anybody, and everybody that is eligible, whether they participate or not, and there is a vesting schedule or ownership schedule on that. That is another way how the employer contributes. Make sure you know that because there could be some strategies involved.

Tweetable Quotes

• “We kind of boil it down to help the participants, especially the new participants in the plan” – Bill Bush
• “So often, you will see on the eligibility side, maybe it's 21 years of age and one year of service.” Andy Bush
• “We find now that about 75 to 80% of the plans do contain the Roth provision.” - Andy Bush
• “We've seen some that are a little difficult for people to figure out because it's a very weird formula.” - Bill Bush
• “So the other thing that the summary plan description will entail or spell out is the vesting schedule.” – Bill Bush
• “Article Six, and this is the one you're going to like its distributions prior to termination is hardship distributions.” – Andy Bush
• “So we do get a lot of calls from participants, and of course, as I mentioned, each plan is a little different.” - Andy Bush

Resources Mentioned

• Horizon Financial Group: Website
• Contact Information:  Bill Bush          Andy Bush
• The Runway Decade: Website
• Podcast Editing

In today’s episode of the “Inside the Plan with the 401(k) Brothers”, host Bill Bush and Andy Bush, advisors at Horizon Financial Group talk about a project at Horizon that they have been working on for about a year and a half called ‘The Runway Decade’. It's something geared towards those people who are turning over 50 or close to retirement. So, there's a book that is out called ‘The Runway Decade’ as well as a website called runwaydecade.com

Episode Highlights

• 03:00 – ‘The Runway Decade’ book/website is about building a pre-retirement plan in your 50s so what are some of the things in your 50s that you should be thinking about to get intentional about in that 10 to 15 years for most folks before retirement.
• 05:05 - Maybe your kids are starting their own families and you're becoming a grandparent and you want to express your love and joy towards that child through sometimes gifts and things like that.
• 08:53 - No matter where or how you've arrived at this point, there's always progress to be made. The big thing is looking back in the history of things that were maybe scary when they happened, but there were plenty of great times.
• 10:50 – In this book, everybody's got something that they will get so excited about that.
• 12:35 - Chapter Five is called ‘Enter the Matrix’ and that is kind of one of the chief documents or covenants around our financial planning process.
• 14:30 - Chapter Eight is called ‘Create your Action Checklist’. That's something they do with people that go through their financial planning process.
• 16:00 - Reading the book you can find the holes or areas of improvement that you may have in your plan based on professional advice.
• 18:10 – For people that are in their 50s or maybe early 60s, there seems to be a lack of clarity. What you'll find in the book is you're going to gain clarity and confidence, and know what direction you need to be going.
•  

Three Key Points

1. If you were born in 72 but you have people in their 50s, think of some of the historical things that have happened in your life. This is about some of the market volatility we may be experiencing at the moment. We tend to look at history if you have experienced those things in real-time when they happened like the hostage situation in Iran in 1980, etc. So they kind of draw on the common historical experience that folks in their 50s have, and then we get into anticipating that vision of the future. The key behind any of that is to continue to reinforce the confidence you have.
2. The book has 10 chapters plus an introduction and a conclusion. So the chapters will just go quick like where are you going, or where do you want to go? Then the obstacles to overcome in chapter two there's going to be things that you've probably already been hit with the common one is procrastination or overcoming inertia.
3. Once somebody's finished the book, they hopefully will have been motivated to take action, will be taking action at least have a lot more direction in their 50s as to what they need to do to handle that because that's the runway analogy. When you're at the beginning of the runway, it's moving pretty slow but it goes fast and you look outside and you see these reflectors passing by and it's like weeks and months of your life. Maybe you didn't take any action so there isn't an immediacy there to that kind of thing because believe it or not decades and runways both come to an end.

Tweetable Quotes

• “We're going to talk about a project we here at Horizon have coming up and the word is cross-promotion.” – Bill Bush
• “As we age, it's not uncommon for somebody in your cohort to have passed away. There's health scares either yours or your spouse's maybe sometimes divorce.” – Andy Bush
• “If you put some intention, some forethought, and vision then create some steps, you can make your situation better.” – Bill Bush
• “Chapter Three, where are you now kind of is like take a self-inventory of folks what we find in their 50s have changed careers many times” - Bill Bush
• “Chapter Six is what's working and what's not working.” - Bill Bush
• “If you've made it to 50, you know life can punch you in the face.” – Bill Bush
• “Then the other thing, we hope that it does is just instill that financial confidence.” - Bill Bush

Resources Mentioned

• Horizon Financial Group: Website
• Contact Information:  Bill Bush          Andy Bush
• The Runway Decade: Website
• Podcast Editing

In today’s episode of the “Inside the Plan with the 401(k) Brothers”, host Bill Bush and Andy Bush, advisors at Horizon Financial Group, in their ‘Generation’s Series’, talk about the investment behaviors of ‘Baby Boomers’, the generation which includes the birth years 1946 to 1964.

Episode Highlights

• 01:30 – In the US, the ‘Baby Boomer’ generation comprises about 70 million people.
• 03:35 - Among the Baby Boomer generation, an EBRI survey found that 46% of this group reported accruing less than needed savings for retirement.
• 05:30 - Some boomers have said that they're going to need to work longer to pay off debt, but the actual study show, that they don't work longer.
• 07:20 - If you wait until full retirement, you're getting 100% of your Social Security benefit. If you wait after your full retirement, you're getting an 8% increase each year on top of whatever the cost of living adjustment might be.
• 08:54 - One thing that becomes important is the distribution phase, as we go from the accumulation phase of working to retiring, and then it's how to manage the withdrawals, which can be a tricky situation.
• 11:15 – As you grow older, instead of just on a whim of buying something, one needs to be a little more thoughtful of that by understanding what is the purpose of it.
• 13:30 - If you're relying on dollars, you just don't want to have to sell when the market drops down.

Three Key Points

  1. Most ‘Baby Boomers’ generation is retired right now or about to face retirement. There are a good number that have already gone through retirement and they've maybe gone through their planning side of entering into retirement and then there are a bunch that are in that decade range till they check out for the last time at the workplace. As per the research Boomers carry an average household debt of alittle over $272,000. And the biggest part of that debt is likely going to be their house.

2.    Some people said that due to the pandemic they’ll just work longer and pay off that debt. But the reality is, that often doesn't happen. The other thing that they talk about is filing for social security, people usually make the mistake offiling early. Filing early kind of locks in lower pay. If you wait until your full retirement, which is 66-67.. or somewhere in between for the Boomers group. So if you wait until fullretirement, you're getting 100% of your Social Security benefit.

3.    Baby Boomers those that have not retired, for them the most important thing is that as you're getting much closer to retirement you need to establish a budget ify ou haven't. So that you understand what your spending habits are. Except for basic needs, make sure you know where your money's going.

Tweetable Quotes

• “That was post-war that there was a boom in babies.” – Bill Bush
• “Maybe some sort of debt that didn't exist the generation before.” - Bill Bush
• “Percentage of people that say, “Hey, I'll just have to work longer and the percentage that does is much lower because they become ill.” – Andy Bush
• “If you want more information about Social Security, we do have a webinar on the horizonfg website under Events, if you want to look into that a little more.” – Andy Bush
• “As you mentioned retiring without debt is an ideal situation.” – Bill Bush
• “You're going to have to probably be a little better at budgeting.” - Andy Bush
• “They want to make sure that they're not exposing themselves to significant market drops of money that they're going to rely on” - Andy Bush

Resources Mentioned

• Horizon Financial Group - Website
• Contact Information: Bill Bush Andy Bush
• Podcast Editing

Episode Highlights

• 01:20 – People who were born in 1965 through 1980 come under Generation X, which is a pretty cool generation.
• 03:10 – According to a couple of researchers, by about the age of 40, Gen – X wants to try to have about three times their salary and by the age of 50, they try to make around six times their salary.
• 05:20 – In a study by JP Morgan, around 70% of working-class people say, “I will work longer and delay retirement”, but only about 27% are actually able to do that because of health issues, or because of downsizing in their company, etc.
• 07:00 – Bill says that the other thing that Generation X is faced with is as they began their working careers, pensions were on the downside. Companies stopped offering those defined benefit plans.
• 09:30 – A study by EBRI (Employee Benefit Research Institute) compared the financial status of Gen X families, and found that those families own about 67% of assets inside of retirement plan whereas Baby Boomers at the same age had 71.5%.
• 11:25 - Morgan Housel's book “Psychology and Money” talks about how generations behave based on their upbringing, and what they've experienced in their particular time of those formative years.
• 14:00 - When we do presentations for retirement plans, we do like to zoom out to those greater time periods, because you can get lost in the weeds sometimes about what's going on in the day, mentions Bill.
• 16:00 – Referring to Malls, Bill says, if you got a place where you used to be able to walk in and buy things, and now it's a fulfillment Centre, which is sending it to your house.
• 18:00 – Andy states that when it comes to investing and saving for retirement, it is about discipline, and it's about a habit.
• 20:45 – Retirement saving is how we're going to take care of our 80 or 85-year-old self.

Three Key Points

1. Generation X has experienced various crises including financial busts, and other geopolitical campaigns, like wars and things like that, that occurred in real-time, and they are very scary and uncertain. But at the same time, in the midst of us having some volatility in this current year 2022. As an investor in the stock market, you're not just throwing money into something that has some random value. It's a value based on your investment in the companies like Walmart, McDonald’s, IBM, Amazon, etc. So, you're investing in the value of what that company is worth.
2. For Generation X, if you're in your 40s and your 50s, possibly, and you are working, you probably need to think about retirement a little bit more. So, it is true that when your age flips to 50, and you say, it's just a number. But at the same time, you do realize that you are a lot closer to retiring, and you are a lot closer to other things. It is to sort of get people prepared to think that even if you haven't done much yet, there's still time left to invest in the retirement plan and to make the progress.
3. Andy says, it's not about some specific goal out there, it's about a lifestyle. It is the same thing with investing, create a lifestyle habit of putting dollars aside so that you realize as you're getting further down the runway, how quickly you're moving. That's the old expression - days are long, but yours are short.

Tweetable Quotes

• “Out of the six children that are Bush kids, there are five of us that are members of Generation X, and so we know this generation.” – Bill Bush
• “I think by this time in most of Gen-X’s lives, by about the age of 40, you want to try to have about three times your salary.” – Andy Bush
• “Experts kind of worry that Generation X maybe isn't placing retirement savings on the front burner.” - Bill Bush
• “The 401 K plans really started in the early 80s.” - Andy Bush
• “Once the kids are out of the house, it does give a family the opportunity to start putting more in, because their expenses are dropping, but their incomes better.” - Andy Bush
• “If you can turn in tune in to a financial channel, CNBC or MSNBC or any of those and it's going to tell you exactly what went well.” - Andy Bush
• “Now we seeing the speed and the immediacy of things, it's really changed the world.” - Bill Bush
• “I think brother Bill and brother Pete have written a book, and it'll be published maybe later in the summer this year, that is called ‘The Runway Decade’.” - Andy Bush

Resources Mentioned

• Horizon Financial Group - Website
• Contact Information: Bill Bush Andy Bush
• Podcast Editing