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We’re so excited to see Ubiquity Retirement + Savings CEO Chad Parks is on the April cover of Employee Benefit Adviser!
Read his insights on recent state-mandated retirement plans and the future of 401k.
Working for yourself comes with a lot of added freedom, but your retirement savings plan falls entirely on your shoulders.
For independent business owners and the self-employed, the task of funding future retirement and daily income has been always been a challenge.
According to CNBC, even before the pandemic, “just 13% of [self-employed] tax filers participated in a workplace retirement plan.”
Now, amidst the COVID-19 pandemic, many solopreneurs are facing an even greater struggle to save for the future. While many self-employed workers have been able to collect pandemic unemployment benefits created by the CARES Act, (according to CNBC, “Independent workers like the self-employed, independent contractors, and gig workers made up nearly half of the 31.5 million people receiving unemployment nationwide as of mid-June”), these funds are primarily covering the losses businesses have experienced throughout recent months.
If you’re self-employed, how do you decide if, and how much to save? What kind of retirement plan will best fit your personal needs?Read More
Ensuring financial security after the events we are facing as a country is going to take the perfect storm of governmental support, institutional changes, and societal shifts.
In an in-depth Q+A with Benefits Pro, Ubiquity founder and CEO Chad Parks shares what lies ahead for the retirement industry, explores how the 2020 election may impact retirement saving, and explores what can be done to help improve the financial futures of all Americans.
Here are some highlights:
“First and foremost, there has been a renewed awareness of why what we do in the retirement space is so important. If we have learned anything from this pandemic, it’s that people are not only drastically underprepared for their future, but they don’t have the necessary savings in place for today. The pandemic truly shined a spotlight on the lack of retirement preparedness throughout the country.
As a response, there has been a big push in the industry toward solving the problem of financial wellness. The retirement industry is like a giant aircraft carrier — it’s usually slow to respond and adjust. Buzzwords like “financial wellness” get talked about often, but very little typically gets done on a larger scale. The pandemic has caused a seismic shift in the industry that will hopefully put us on a new course.”
“Set up a simple budget. Start by calculating your mandatory expenses per month. From there, determine the total amount you can afford to save each month. With a dual-savings strategy, you could then split that total monthly savings into two accounts: a short-term savings account or “emergency fund” to cover any unexpected costs or life events (e.g., losing a job, medical expenses, etc.), and a long-term retirement savings plan……This dual-savings strategy allows you to simultaneously prepare for the unexpected while still investing in the future, all without increasing the total amount you save each month.”
“Early Boomers are arguably the greatest beneficiaries of the retirement system as it was originally designed to work. Most people in this group are already retired and most likely have a pension, are receiving Social Security and have saved a good sum of money on their own. The traditional three-legged stool of retirement — pensions, Social Security and personal savings — is in place for them.
However, the trailing edge of the Boomer generation is far less likely to have all three of these pillars securely in place. Late Boomers are facing a lot of uncertainty surrounding the future of Social Security and a possible reduction in benefits, as discussed above. They also likely don’t have access to a pension and if they do, may soon realize the funds from that account are not as secure as they think. As these near-retirees enter retirement, pension plans will finally experience the full force or “pull” of everyone needing their money at once. Many might be underfunded and unable to pay the full benefit.”
A survey taken in May from Principal Financial Group found that 1 in 10 workers plan on using their retirement account to relieve COVID-related financial hardships.
Yes, one of the perks of saving in your company’s 401k is the ability to tap into your 401k as an emergency source of cash. In fact, thanks to the pandemic stimulus package known as the CARES Act, it’s easier than ever for retirement savers to access their funds to relieve financial burdens.
Prior to the coronavirus pandemic, if you were under age 59½, taking a distribution from your 401k would trigger a 20% federal tax hit and a 10% early distribution penalty.
While withdrawing or taking a loan from your nest egg might help keep you afloat, but financial experts warn that you should aim to recharge your retirement savings as soon as possible.
Ubiquity Retirement + Savings Founder and CEO Chad Parks spoke with Money Magazine about things you need to know if you plan to take advantage of this provision, and how to move forward once your finances are stabilized.Read More
We know it can be hard to stomach looking at your retirement account balance during a market downturn.
It’s one thing to read in the news about stock market losses, but it’s a very different feeling when this is reflected back at you from your retirement account. Even here at Ubiquity, where our teams work every day with small businesses to set up 401k plans, we aren’t immune to emotional reactions upon seeing our balance.
So, what should you do when your first-quarter statement arrives?
According to our founder and CEO Chad Parks, it depends on your age–and how you handle bad news:
“How do you behave when you get bad news? It’s human nature to focus on the immediate. It’s very difficult to focus on the long term.”
If you’re younger, and many years away from retirement, it may be wiser to not look at your statement at all. On the other hand, if you’re planning on retiring in the next 2-5 years, experts say it may be time to take a closer look.
If you’re saving in a 401k, you’ve already taken the first step towards a brighter future. But if it feels like you’re not winning at 401k investing, you’re not alone.
Fidelity reported to CNBC that, “the average 20-something had $11,800 in a 401k in the first quarter of 2019…For people in their 30s, the balance jumped to $42,400.”
People have a hard time visualizing the future because we are not programmed for long-term thinking.
-Chad Parks, Ubiquity Founder and CEO
Read insights from retirement planning experts on common 401k missteps to avoid–or it will cost you in the long run. Topics range from your savings mindset to missing out on your employer’s matching contributions.Read More