Jeanne Sutton
11m
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401(k) Specialist Podcast
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Ohtani’s ‘Retirement’ Strategy, NQDC Plans and 2024 Stock Trends with ‘401(k) Lady’ Jeanne Sutton
Baseball’s biggest star Shohei Ohtani made headlines recently by signing the largest individual contract in the history of sports when he inked a 10-year, $700 million deal with the Los Angeles Dodgers.
Interestingly, he deferred $68 of the $70 million per year in a move that could save him nine figures in California state income tax down the road.
We’ll talk about that unique contract and the power of non-qualified deferred compensation plans with Strategic Retirement Partners Managing Director Jeanne Sutton, known as “The 401(k) Lady” in her popular social media videos. We’ll also talk about her stock market trends to watch in 2024, as well as what’s on her industry travel and speaking agenda this year.
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Fred Reish Unpacks the DOL’s New Fiduciary Rule
The Department of Labor released its final “Retirement Security Rule” recently, which aims to raise the legal bar for financial advisors, brokers, insurance agents and others who give retirement investment advice.
Noted ERISA attorney Fred Reish Esquire, Partner at Faegre Drinker, shares his thoughts on some of the rule’s key focuses and changes, along with implementation questions and potential hurdles to the rule becoming effective in September.
Key Insights:
- Clarification of "Retirement Investment Advice": The updated Retirement Security Rule defines advice that is fiduciary in nature, emphasizing that even one-time advice must prioritize the investor's best interests. This redefinition aims to reinforce the legal and ethical duty advisors hold toward their clients. The new retirement security rule's implementation, scheduled for September 2024 with additional requirements phasing in by 2025, is set to introduce new compliance standards, enhancing overall financial advisory practices.
- New Protocols for IRA Rollovers: Advisors must now perform a thorough analysis to ensure recommendations, particularly concerning IRA rollovers, align strictly with the client’s best interests. This includes comparing costs and services between the existing plan and any proposed IRA, a process that could challenge particularly those less familiar with stringent regulatory frameworks, such as independent insurance agents.
- Impact and Industry Response: While wealth management firms may find adapting to the new standards more straightforward due to previous regulatory experiences, independent insurance agents are anticipated to face significant hurdles. The industry’s reaction is mixed, with some viewing the compliance requirements as burdensome, yet the overall sentiment recognizes the new Retirement Security Rule as a crucial step towards ensuring client interests are foremost.
SEE ALSO:
- DOL Fiduciary Rule Hit With First Lawsuit
- Breaking Down the Basics: DOL Fiduciary Rule
- DOL Final Fiduciary Rule Released, Set to Become Effective in September
- DOL Fiduciary Rule Update with Fred Reish
Exploring the 'Annuities in TDFs' Trend with Morningstar's Jason Kephart
There’s a trend happening right now where asset managers are using a new strategy to help 401(k) plan participants manage their retirement spending: Target date funds featuring annuities.
Morningstar recently did some really interesting research on this trend, and there are some compelling reasons to believe this type of solution could gain some serious traction in the coming years.
Jason Kephart, director of multi-asset ratings for Morningstar Research Services LLC, was a lead author of the new research, and he explains why annuities in target date funds are trending, who’s getting into this market, how it can help retirement plan participants, and some of the roadblocks that need to be overcome if it is to become a broadly adopted solution.
Certainly, here are the expanded key points:
- Innovation in Target Date Funds with Annuities: Asset managers are now integrating annuities within TDFs, aiming to aid retirees in managing their retirement income more effectively. While these innovative products have been introduced recently, they represent a small but potentially growing portion of the TDF market.
- Addressing Retirement Income Management: The asset management industry has excelled in helping individuals accumulate savings for retirement, but support for income management post-retirement has been lacking. TDFs with annuities are proposed as a solution to this gap, offering streamlined decision-making and a reliable income stream for retirees.
- Challenges to Adoption of Annuities in Target Date Funds: Despite the potential benefits of annuities in TDFs, there are concerns about low investor interest, possibly due to past products failing to attract users. The complexities involved in understanding annuities, the apprehension about fees, and legal considerations for plan sponsors are significant obstacles, alongside the need for educating both plan sponsors and participants about these new options.
To view the full Morningstar research, “Target Dates and Annuities… It’s Complicated,” click here.
SEE ALSO:
- New Wave of Annuities in TDFs: ‘It’s Complicated’
How AI is Changing the Game with Financial Finesse’s Liz Davidson
Artificial intelligence is a hot topic everywhere these days, including the financial services industry. We check in with artificial intelligence early adopter Liz Davidson, founder and CEO of Financial Finesse, who tells us about their award-winning AI-powered virtual financial coach named Aimee, and how AI really is turning into a game-changer for many retirement plan advisors.
Financial Finesse is making great strides in this area, and she explains how they’re doing it and why AI has so much potential to provide safe and accurate financial education to plan participants.
Previewing the 2024 NAPA 401(k) Summit with Nevin Adams and John Sullivan
The workplace retirement plan industry’s premiere event is just days away, with top professionals set to descend upon Nashville April 7-9 for the 2024 NAPA 401(k) Summit.
We get a preview of the big event from two of the key people in charge of putting it together in Nevin Adams and John Sullivan, the former and current Chief Content Officers for the American Retirement Association.
In addition to highlighting some of the topics and key must-see sessions scheduled for the event, we’ll check in with Nevin about his “gradual retirement” and John about how he’s fitting into the big shoes left for him by Nevin.
Defending the 401(k) with ICI's Sarah Holden
The 401(k) has been under attack on multiple fronts lately.
Between calls for eliminating their tax advantages to prop up Social Security to Bernie Sanders pining for a return to pension plans, and momentum seeming to build for the TSP-like “Retirement Savings for Americans Act” that many in the workplace retirement market believe would constitute unfair competition from the federal government, it’s enough to have retirement plan advisors feeling a little defensive these days.
Fortunately, plenty of retirement industry experts have stepped up to answer these attacks, and today’s podcast features a prominent one in Sarah Holden, senior director of retirement and investor research at the Investment Company Institute.
ICI has been very active in debunking recent attacks on defined contribution plans, and Holden makes some great points in defense of the 401(k).