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Retirement Savings Options

Posted By Stephanie Schwartz, Nationwide Mutual Insurance, Wednesday, November 22, 2017
Updated: Thursday, July 27, 2017

If you’re thinking about extending retirement benefits to your employees, you should know what’s available. An effective retirement account provides flexibility – that’s why it’s important to offer a variety of options that work for both “hands on” and “hands off” investors.

Consider these solutions for small business employees and individuals like you:

For employees 

  • Defined contribution – These kinds of accounts are the most common today.  Examples include the 401(a), 401(k), 403(b), 457, SIMPLE or SEP. They’re called “defined contribution plans” because employees are limited to the amount they can contribute to the plan in a given year. As the sponsoring company, you may decide to match employee contributions, though certain circumstances apply.
  • Defined benefit – Otherwise known as pension plans, these accounts provide employees with a lifetime monthly income stream when they retire.  Contributions to the plan are typically made by the sponsoring company and are not taxed.  Taxes are due on the income received in retirement.
  • Guaranteed Retirement Income from Nationwide® – This is a type of annuity that lets employees lock in monthly retirement income for the rest of their lives with a minimum contribution of just $10 a month. There’s no cost or risk to the employer, and there’s nothing for the employer to manage– Nationwide does all the work.

 

For individuals 

  • IRA/Roth IRA – Depending on household income and eligibility for employer sponsored plans, individuals can make contributions to these accounts on either a pre-tax or post-tax basis.

 

  • Direct investments – Many of the investment vehicles offered inside of retirement plans are available for purchase outside of those plans as well. Stocks, bonds, mutual funds and annuities can all be purchased directly from the companies that offer them without the tax advantages retirement plans provide.  Typically, these options have a large minimum investment amount.

 

  • Guaranteed Retirement Income from Nationwide - Individuals, not companies, contribute to this new way to pay for retirement.  It’s a type of annuity that provides monthly guaranteed income for life, with a minimum contribution of just $10 a month. There’s no risk, because it’s not tied to the stock market, and there are no fees to sign up or for ongoing administration.

 

Now that you know about all the investment vehicles available to you and your employees, are you ready to take the next step? Get started by checking out Nationwide’s Find an Investment Professional tool, or talk to friends for their recommendations. To learn more about Guaranteed Retirement Income from Nationwide and to set up an account today, visit Nationwide or call 1-888-891-0272.

Guarantees are subject to the claims paying ability of Nationwide Life Insurance Company.

Fixed annuities are contracts purchased from a life insurance company. They are designed for long-term retirement goals. Withdrawals are subject to income tax and withdrawals before age 59 ½ may be subject to a 10% tax penalty. Annuities are issued by Nationwide Life Insurance Company, Columbus OH.

Nationwide, the Nationwide N and Eagle, Nationwide is on your side, Guaranteed Retirement Income from Nationwide, and other marks displayed in this message are service marks of Nationwide Mutual Insurance Company and/or its affiliates, unless otherwise disclosed. © 2017 Nationwide.

AAM-0460AO (06/17)

Tags:  Employee Benefits  Retirement 

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How to Hire the Right People

Posted By Stephanie Schwartz, Nationwide Mutual Insurance, Wednesday, October 18, 2017
Updated: Thursday, July 27, 2017

Finding, interviewing, engaging and training a new employee can be a major expense so it’s important to get your hiring decisions right. Here are a few quick tips to help you make sure your next hire will be a great fit for your company.

Check job qualifications

This may seem like a no-brainer, but it’s easy to focus too much on personality and not enough on basic abilities: Can they handle the day-to-day responsibilities of the job? Ideally they’ll also exhibit a willingness to go above and beyond when the situation calls for it. You want someone who is eager to do the job you’re offering today and enthusiastic about what the job could become in the future.

Assess for culture fit

How will your candidate mesh with your company’s unique “personality”? Will he or she work well with you, future coworkers, and existing and potential clients and partners? Ask for others’ opinions of the candidate before you hire to avoid a one-sided view.

 

Don’t forget to evaluate character

It’s important to hire employees with values that align with yours. Try to determine if your candidate is honest and trustworthy. Do they keep their promises and follow through? Check references, of course, but remember that, while nice to have, the references a job candidate provides will nearly always be biased. Instead, ask the candidate for the names of former bosses, peers and subordinates.

 

Consider the total compensation package

As an employer, watching your budget is important, but hiring at an uncompetitive or unfair rate can cost you more in the long run because an employee may feel unappreciated and underperform. So do your research to make sure you’re offering a competitive compensation package that not only meets your budget but will also keep your employee satisfied. Can’t afford a long list of benefits? Consider offering resources that will show employees that you care about their well-being. For example, if you’re unable to offer a 401K, you can recommend other ways to help employees save for retirement such as Guaranteed Retirement Income from Nationwide®. It’s a type of annuity that lets your employees lock in retirement income for the rest of their lives with a minimum contribution of just $10 a month. There’s no cost to you. There’s nothing to manage, and absolutely no risk.  

 

Hiring the right people is both a skill and an art, and getting it right can help you avoid costly and time-consuming repercussions while bolstering the morale of your entire existing team. Put these tips into practice and chances are you’ll get better results from your next new hire.

 

Guarantees are subject to the claims paying ability of Nationwide Life Insurance Company.

Fixed annuities are contracts purchased from a life insurance company. They are designed for long-term retirement goals. Withdrawals are subject to income tax and withdrawals before age 59 ½ may be subject to a 10% tax penalty. Annuities are issued by Nationwide Life Insurance Company, Columbus OH.

Nationwide, the Nationwide N and Eagle, Nationwide is on your side, Guaranteed Retirement Income from Nationwide, and other marks displayed in this message are service marks of Nationwide Mutual Insurance Company and/or its affiliates, unless otherwise disclosed. © 2017 Nationwide.

AAM-0458AO (06/17)


Tags:  Employee Benefits  Retirement 

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Employee Retention Tips

Posted By Stephanie Schwartz, Nationwide Mutual Insurance, Wednesday, September 20, 2017
Updated: Thursday, July 27, 2017

Retaining Great Employees

Some companies offer competitive compensation and hope it’s enough to keep workers on board. The truth is, it’s only one way out of many. Nationwide®, ranked as a FORTUNE Best Company to Work For®, is proud of the large number of long-tenured employees at all levels of the business. Here are four ways we’ve found to be effective in keeping great people around.

Ongoing development

Most people would prefer a career as opposed to “just a job”. Wouldn’t you? Help your associates set goals for advancement, and consider investing in their professional development and training. You may find that their new-found skills can help your company grow in unexpected ways as well.

Work/life balance

Still stuck in the belief that 9-5 is the only way to go? A good work/life balance can help employees feel more in control of their working life, increasing productivity and lowering absenteeism. Flexible work hours, telecommuting or the occasional remote work day can do wonders for employee morale, and happy employees are employees that stay with you.

Special recognition

Who doesn’t love to be rewarded for a job well done? A simple “thank you” or a small bonus can go a long way toward making employees feel valued. Recognize your employees sincerely and often and they’ll likely reward you with loyalty.

Benefits that matter

Of course, benefits can be expensive, but they’re an important way to show you care about your employees’ health and financial well-being. Retirement plans are one type of benefit you can offer, but if you don’t have the resources to offer an employer-sponsored plan, you have options. You can share information, for example, about ways employees can save on their own. Think something new like Guaranteed Retirement Income from Nationwide®. It’s a type of annuity that lets your employees lock in retirement income for the rest of their lives with a minimum contribution of just $10 a month. There’s no cost to you and nothing to manage – Nationwide does all the work.  

Employees are assets that can be expensive to replace, and the cost of high employee turnover can be significant for small businesses. Take time now to review your employee retention practices and see if there’s room to improve. Your bottom line and your employees will thank you for it.


 

Guarantees are subject to the claims paying ability of Nationwide Life Insurance Company.

Fixed annuities are contracts purchased from a life insurance company. They are designed for long-term retirement goals. Withdrawals are subject to income tax and withdrawals before age 59 ½ may be subject to a 10% tax penalty. Annuities are issued by Nationwide Life Insurance Company, Columbus OH.

Nationwide, the Nationwide N and Eagle, Nationwide is on your side, Guaranteed Retirement Income from Nationwide, and other marks displayed in this message are service marks of Nationwide Mutual Insurance Company and/or its affiliates, unless otherwise disclosed. © 2017 Nationwide.

AAM-0459AO (06/17)

Tags:  Employee Benefits  Retirement 

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5 Tips To Grow Your Business

Posted By Stephanie Schwartz, Nationwide Mutual Insurance, Wednesday, August 16, 2017
Updated: Monday, July 31, 2017

You don’t have to be a startup venture to capitalize on tips for taking your business to the next level – more mature companies can benefit too. These five tips can help you grow regardless of the size of your company or the industry you’re in.

 

1. Don’t try to do everything

As an entrepreneur, you’re probably used to wearing a lot of different hats – bookkeeper, marketing guru, sales agent – but that doesn't mean you can (or should) do everything yourself. If you want your business to grow, you need to accept that you can’t do everything all the time. Hire capable people or outsource work to good partners to free up time to focus on the tasks you do best.

 

2. Spend more time on selling

The one area that contributes most to business success is sales. If you’re a new company, some business experts estimate that 80% of your time should be spent on reaching out to people who can buy what you’re selling. If you’re an established company, that number goes down to 30%, but the point is, the time you spend selling is time spent opening doors and connecting with customers who write the checks.

 

3. Analyze your competition

Don’t be afraid of your competition. Instead, think of your competitors as opportunities to learn. Take a good look at what they’re doing and think about the things they do that you could implement to make more money for your own business.

 

4. Consider diversifying

Tweak your product or service so that it appeals to a new group of consumers. Alternatively, add a new product or service to your mix. By diversifying, you can create multiple income streams that can often fill seasonal lows and, of course, increase sales and profit margins. Common ways businesses diversify include importing or exporting their own or other people’s products, selling complementary services or starting consulting services.

 

5. Hire the right people

It’s essential to put together a team that feels responsible for the growth of your company. It’s equally important to pay them what they’re worth and to offer them the health and retirement benefits they deserve. Can’t offer a 401K? Look into options such as Guaranteed Retirement Income from Nationwide®. It’s a type of annuity that lets your employees lock in retirement income for the rest of their lives with a minimum contribution of just $10 a month. There’s no cost to you and nothing to manage – Nationwide does all the work.

Growing your own business is hard work and success is not guaranteed, but these tips can help get you started on the path to becoming a growing enterprise. Good luck!


 

Guarantees are subject to the claims paying ability of Nationwide Life Insurance Company.

Fixed annuities are contracts purchased from a life insurance company. They are designed for long-term retirement goals. Withdrawals are subject to income tax and withdrawals before age 59 ½ may be subject to a 10% tax penalty. Annuities are issued by Nationwide Life Insurance Company, Columbus OH.

Nationwide, the Nationwide N and Eagle, Nationwide is on your side, Guaranteed Retirement Income from Nationwide, and other marks displayed in this message are service marks of Nationwide Mutual Insurance Company and/or its affiliates, unless otherwise disclosed. © 2017 Nationwide.

AAM-0432AO (06/17)

Tags:  Employee Benefits  Income  Retirement 

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Retirement Savings Options For Small Businesses

Posted By Stephanie Schwartz, Nationwide Mutual Insurance, Wednesday, July 19, 2017
Updated: Thursday, July 6, 2017

If you’re thinking about extending retirement benefits to your employees, you should know what’s available. An effective retirement account provides flexibility – that’s why it’s important to offer a variety of options that work for both “hands on” and “hands off” investors.

Consider these solutions for small business employees and individuals like you:

For employees

  • Defined contribution – These kinds of accounts are the most common today.  Examples include the 401(a), 401(k), 403(b), 457, SIMPLE or SEP. They’re called “defined contribution plans” because employees are limited to the amount they can contribute to the plan in a given year. As the sponsoring company, you may decide to match employee contributions, though certain circumstances apply.
  • Defined benefit – Otherwise known as pension plans, these accounts provide employees with a lifetime monthly income stream when they retire.  Contributions to the plan are typically made by the sponsoring company and are not taxed.  Taxes are due on the income received in retirement.
  • Guaranteed Retirement Income from NationwideSM – This is a type of annuity that lets employees lock in monthly retirement income for the rest of their lives with a minimum contribution of just $10 a month. There’s no cost or risk to the employer, and there’s nothing for the employer to manage– Nationwide does all the work.

 

For individuals

  • IRA/Roth IRA – Depending on household income and eligibility for employer sponsored plans, individuals can make contributions to these accounts on either a pre-tax or post-tax basis.

 

  • Direct investments – Many of the investment vehicles offered inside of retirement plans are available for purchase outside of those plans as well. Stocks, bonds, mutual funds and annuities can all be purchased directly from the companies that offer them without the tax advantages retirement plans provide.  Typically, these options have a large minimum investment amount.

 

  • Guaranteed Retirement Income from NationwideSM - Individuals, not companies, contribute to this new way to pay for retirement.  It’s a type of annuity that provides monthly guaranteed income for life, with a minimum contribution of just $10 a month. There’s no risk, because it’s not tied to the stock market, and there are no fees to sign up or for ongoing administration.

 

Now that you know about all the investment vehicles available to you and your employees, are you ready to take the next step? Get started by checking out Nationwide’s  Find an Investment Professional tool, or talk to friends for their recommendations. To learn more about Guaranteed Retirement Income from Nationwide and to set up an account today, visit Nationwide or call 1-888-891-0272.

Tags:  Employee Benefits  Retirement 

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More Americans Plan to Retire After 70

Posted By Carol Mangen, Arizona Small Business Association, Wednesday, June 22, 2016
Updated: Thursday, June 9, 2016

Original article posted on Employee Benefit News

(Bloomberg) -- U.S. workers are more confident that they'll be able to retire someday. Just not until they're 70.

Some 23% of Americans with jobs said they planned on being septuagenarian employees, up from 16% in 2009, according to Willis Towers Watson, a human resource consulting firm. While the average employee calculates he or she will retire at age 65, as a group they place the odds that they'll still be working at age 70 at 50 percent. If love of the job is what keeps someone working until or beyond 70, that's one thing. (Or beyond age 80: Hello, Mrs. Buffett and Bogle.) But the survey of 5,100 U.S. employees, and 30,000 in total, in 19 countries, found that employees who expected to work longer were "less healthy, more stressed and more likely to feel stuck in their jobs than those who expect to retire earlier."

[Image: Bloomberg] 

The evocative and somewhat creepy term used for these people is "hidden pensioners." An even less happy survey result is that 40% of those planning to work into their 70s feel stuck in their jobs. Of those planning to retire at age 65 or earlier, about 28% feel that way."The decline of defined benefit plans and employer subsidies for early retirement removed one tool that encouraged that orderly rate of workers retiring," said Steve Nyce, a senior economist at Willis Towers Watson. There is some good news in the survey, however: In the U.S., and around the world, the level of short-term financial worry has fallen.

Here are other highlights (or lowlights, as the case may be) from the survey:

Employees in the U.S. are more pessimistic about whether their generation will be "much worse off in retirement" compared with their parents' generation. In America, 76% agreed or strongly agreed with that statement. Globally, 66 percent agreed. "The U.K., Japan, the U.S. — the more developed economies — tend to be less optimistic about the next generation," said Nyce.

A significantly smaller percentage of women than men feel confident about having enough savings to live comfortably for 25 years in retirement. The biggest gaps by gender here were among those between the ages of 20 to 29, and those age 50 or older. The percentage of men 65 or older still on the job in the U.S. was 22% last year, up from 15% in 2003.

Old age labor participation rates should rise a fair bit over the next decade or two, said Nyce. In the 1960s, the participation rate of older workers in the labor force was around 25%, he said. The countries seeing the biggest leaps in old age labor force participation over the past five years or so include the U.K., where it almost doubled to 13%, and Canada, where it stands at 17% up from 9% in 2001. But everything pales next to the rate in South Korea, where it's 42%, up from 39% in 1989.

By

Suzanne Woolley


Tags:  business  retirement 

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The RMD Choice: Take A 50% Tax Penalty Or Leave A Family Legacy

Posted By Jason Trujillo, Woodbury Financial, Thursday, March 26, 2015

The RMD Choice: Take A 50% Tax Penalty Or Leave A Family Legacy by Steve Parrish

Article appeared on March 23, 2015 on Forbes.com.

Click here to read original article.

A long time ago, I helped my dad set up his IRA account. Years later, after he had turned 70, I received an angry call from him.

His tax person was telling him he was forced to take a distribution he didn’t want and, even worse, pay taxes on that unwanted income. More pointedly, he wanted to know why I put him into such a bad deal. He was, of course, referring to the fact that he had to take required minimum distributions (RMDs) from his IRA account, or face a 50 percent tax penalty.

He was rightfully upset because he:

  • Didn’t want to figure out how much to take each year
  • Didn’t need the money
  • Definitely didn’t want to be forced to pay taxes he hadn’t expected

RMDs have been a planning challenge since the law that created the requirement was passed 33 years ago. Objections revolve around two aspects of the law. First, people don’t like being told when they have to take – and pay taxes on – their money. Second, the rules are so complicated they almost invite noncompliance. For example, the first RMD must be taken “April 1 of the year following the calendar year in which you reach age 70½.” Huh?

Yet the law continues with few dents in its armor. In 2009 the RMD rules were suspended for one year. That was back when, because of the Great Recession, investment values were so deeply depressed that forcing a distribution was tantamount to forcing a loss. And, in the last few years, Congress has annually granted a last-minute reprieve for taxpayers who want to avoid taxes by directing their RMD payments directly to a charity.

Other than that, taxpayers remain stuck with the RMD rules.

Getting it to the next generation

Many business owners are “financially full” when they retire. In other words, they have other sources of revenue and simply don’t need or want the income from their IRAs. The RMD rules, however, require that they take a minimum annual payment that is equal to their account divided by their life expectancy.

The challenge is the RMD is subject to federal income tax in the year it is taken. Further, if the individual is sufficiently wealthy to be subject to the federal estate tax, the IRA is a taxable asset of the estate. This can result in the business owner’s heirs receiving a fraction of the actual IRA account. For a high-bracket taxpayer, income and estate taxes can conceivably erode more than half of the account.

Bottom line, if you hope to live off other income during retirement and thereby preserve qualified plan assets as a legacy for your family, the RMD rules make the IRS an unwanted partner. Your future legacy is lessened by current taxes.

A solution

Here’s an idea that could work well if you want to turn your IRA into a legacy. Say you don’t need the IRA income, and you would like to leave more after tax wealth to your heirs. The basic concept is to start annually withdrawing IRA assets to fund a life insurance policy on your life. This can start as soon after 59 1/2 as you’re comfortable with your retirement strategy, and there’s no set maximum or minimum size.

You can either own the policy personally, or if you’re concerned about estate taxes, you can have the policy owned by an irrevocable trust. Each withdrawal from your IRA is taxable, but the proceeds are used to pay the premiums on a tax-free life insurance benefit. At your death, your heirs receive a death benefit from the life insurance plus whatever’s left of your IRA. On an after-tax basis, this may well increase the legacy your family receives.

Using this approach you would have a revised, and lower, schedule of RMDs. More of your IRA account would be used to fund a tax-free life insurance policy. Less would be coming out in taxable RMDs. Particularly if you die prematurely, your heirs will receive a substantially higher after-tax inheritance using life insurance than if you had just taken your RMDs, paid tax on them and reinvested the proceeds. If, however, you live past your life expectancy, the difference between the two will lessen.

The numbers are, of course, dependent on your age and health status. That’s the nature of purchasing life insurance. But if you’re looking for a way to leverage your IRAs rather than curse your RMDs, this legacy approach to planning may work for you. I wish I had suggested this idea to my dad!

 

 

Tags:  70 1/2  after-tax inheritance  business owner  death benefit  estate planning  estate taxes  family legacy  federal income tax  financial planning  IRA  irrevocable trust  life insurance  Principal Financial Group  qualified plan assets  required minimum distributions  retirement  RMD  Steve Parrish 

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