Category: Retirement Trends

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In this week’s Andrew Answers, we hear from Bob, an entrepreneur looking to do right by his employees. Bob wants to open a small business 401k. Bob needs help getting started.

Get a short rundown on what to do before the year-end as you’re opening that shiny new retirement plan. I touch on timing, plan features, and what to look out for.

If you are a small business owner who wants to start a 401k plan by 2014, or an employee of a small business in need of the option to save for retirement at work, this episode is for you!

Oh, and I’ve got a mustache. Here’s why.

I recently returned from a trip to Bogotá, Colombia and immediately fell in love with the city. It’s a beautiful place, with stunning architecture and fabulously friendly people. The food was great, the weather was akin to San Francisco and I spent my sunny days munching on achiras and sipping tropical juices. More than once I remarked to my husband that we should move here. He, too, agreed and said, “Maybe we should retire here.”

Bogota - a day to remember!

A day to remember.

Until I score that winning Powerball ticket, we are years away from retirement, but that doesn’t mean we are not already thinking and planning for it. We are fortunate enough to own a home in San Francisco, but with rising real estate costs and inflation, I worry that the money we are on track to have by the time we retire isn’t going to be enough. Both my husband and I have been contributing to our 401k plans since our first jobs, and I want the money that we are saving to go as far as it can. Maybe retiring outside of the country is a viable plan?

If this sounds appealing to you, too, then here are some things to be thinking about:

1. Do you currently contribute to a retirement plan? I hope that answer is a big, resounding YES, but if it’s not, as soon as you are done reading this blog post you should sign up for your company 401k plan! If they don’t offer one, you can easily open up an Individual Retirement Account (IRA). Whatever you do, keep your eyes on hidden fees.

2. Can you afford to save more? It’s always a good idea to have a living, breathing budget that you revisit at least twice a year. If you can save even just 1% more than you are saving now, it will help you out in retirement. Also, anytime you have a change in your financial situation (raise, promotion, job change) it’s a good idea to crunch the budget numbers again.

3. How do you imagine your dream retirement? Think of your ultimate retirement dream, no matter how intangible it may seem now, write it down and make it a goal. If you can visualize where you want to be, it will be a lot easier to save more. Remember that a goal without a plan is just a wish – so craft a plan to get there!


4. Spread the retirement word! In our culture, talking about finances and money has always been a hush-hush topic. That needs to change! Many experts agree that for Gen X and subsequent generations, Americans can’t rely on Social Security when it’s their time to retire. We need to be educating ourselves and our peers on alternatives so that we can all be happy in our Golden Years.

Each year, EBA names an adviser of the year that exemplifies nimble management and engagement in the ever-shifting waters of employee benefits. Dr. Gregory Kasten, the founder, and CEO of Unified Trust Company, took home the honor of Retirement Adviser of the Year. Dr. Kasten took some time after the recent award to speak with us about retirement, the move from medical to financial, and provide some advice to small businesses and their employees.


Andrew: Let’s just jump back into things and go a bit back to basics. What would you say is the largest challenge as a retirement plan advisor?

Dr. Kasten: The biggest challenge, I think for the modern retirement plan advisor, is to get clients to focus on the right metrics. The major metric is whether or not participants will be able to retire with an adequate benefit. Most plan sponsors focus on simplistic metrics such as participation rates or what type of mutual funds are in the plan. When plan sponsors start thinking of 401k plans as actual retirement plans, they will focus more and more on whether or not the participants will retire with an adequate benefit. That’s the only metric that counts.

Andrew: What advice would you give small companies looking for a retirement account? What would you say to their employees?

Dr. Kasten: I would encourage the company looking to have a successful 401k plan to think of it as a retirement plan. That means they need to work with an advisor, third-party administrator and a discretionary trustee that is focused on participant outcomes and can reliably demonstrate how they can have an impact on that metric. Plan sponsors and advisors should be satisfied with nothing less [than improvement in outcomes].

Employees should understand that this retirement income decision they face is the largest financial transaction they will likely deal with in their life. For most employees, the purchase of retirement income is 2-3 times larger than the value of their home. But yet they generally spend less than 10-20 minutes a year thinking about their 401k plan. So, it’s no wonder that they fail. They would do well to partner with an entity that is focused on their outcome, receive communications that are clear-cut, can be trusted, have faith in the process, and let the expert engineer a successful outcome for them.

Andrew: Anyone not willing to think about and take that advice to heart should rethink their retirement goals! Thank you so much, Dr. Kasten, on your thoughts and advice. It’s been a real pleasure.

For folks wanting more information about Dr. Kasten, please visit Unified Trust. For folks still interested in learning the basics, be sure to tune in to our weekly Andrew Answers video blog to take your retirement to the next level!

Each year, EBA names an adviser of the year that exemplifies nimble management and engagement in the ever-shifting waters of employee benefits. Dr. Gregory Kasten, the founder and CEO of Unified Trust Company, took home the honor of Retirement Adviser of the Year. Dr. Kasten took some time after the recent award to speak with us about retirement, the move from medical to financial, and provide some advice to small businesses and their employees.

Dr. Gregory Kasten
Courtesy of Unified TrustEach year, EBA names an adviser of the year that exemplifies nimble management and engagement in the ever-shifting waters of employee benefits. For 2013, Dr. Gregory Kasten, the founder, and CEO of Unified Trust Company took home the honor of Retirement Adviser of the Year. Dr. Kasten took some time after the recent award to speak with us about retirement, the move from medical to financial, and provide some advice to small businesses and their employees.

Andrew: Dr. Kasten, congratulations for the EBA Retirement Adviser of the Year Award! What an honor! Thank you for taking the time out to answer a few questions. What would you say makes you so passionate about our industry?

Dr. Kasten: I am most passionate about improving participant outcomes. The industry has spent the last 20 years trying to educate participants and the impact on outcomes has been negligible. Last year, the industry spent over $1 billion on employee education. Most of that money was wasted. A recent study showed 56% of participants were either unaware that they had educational materials available, or completely ignored them.

The desired outcome should be an adequate benefit. “Adequate benefit” means replacing the participant’s paycheck. The problem is most participants don’t have a goal of benefit adequacy. They don’t know how much retirement will cost and whether or not they are on track.

Andrew: I find most would love to have a frank discussion on how they’re doing for retirement, comparable to how folks want to talk to someone they can trust when finding a physician. What drew you to finance and away from a career in medicine?

Dr. Kasten: I was initially drawn to the retirement world to take care of my own retirement plan. Later, I found many other individuals were asking for the same type of help.

What I looked to establish in my financial practice was the same standard of care in the financial world that exists in the medical world. In other words, in the doctor-patient relationship, concern for the patient is first and foremost. Secondly, the Hippocratic Oath requires that one should function in a way that “at first does no harm.” Thus, the doctor-patient relationship is very similar to the fiduciary duties under ERISA, which require a duty of loyalty, and duty to act as a prudent expert standard of care.

I was always amazed how much product and analytical effort is conducted in the financial world with no analysis as to whether or not it is beneficial or not. It just sounds like an impressive thing to do.

Andrew: I agree. I’ve always looked at working in the finance world as helping others understand something confusing. As the CEO of your own retirement firm, what has been your vision for Unified Trust for the past (almost) 30 years?

Dr. Kasten: Beginning in 1985, I was a 3(38) investment manager well before that term gained popularity. I first started as a registered investment adviser, but quickly realized that many advisers do not have enough capital or dual controls to be able to safeguard the client. Most clients do not ask the right questions about the ability of a registered investment adviser to make for fiduciary mistakes or even to be able to protect the client.

So, in the early 1990’s, I decided to charter a trust company because clients would be better served in the trust environment. We first chartered a state trust company named First Lexington Trust Company. In 2000, we converted our state-chartered to a national bank charter under the Department of the Treasury office of the Comptroller of Currency and renamed the company Unified Trust Company, NA.

Andrew: It’s always inspiring to see how bigger, successful businesses come from small ones. I’ve got plenty more questions for you. Sit tight Dr. Kasten and we’ll get to those next time.

Stay tuned for the second part of this interview for more insight from Dr. Kasten on working as an adviser and what companies should look for when searching for the perfect provider!

I don’t know if a Stanford torus will be available when I retire, but I’m hoping our society and technology have something awesome and unequivocally desirable awaiting me and my generation.

Equal to that hope is my desire to be financially able to take advantage of such opportunities. To me, that means I need to keep saving up and investing today.

This brings to mind another metaphor or parable, if you will, about “talents” or sums of money that were given to investors.

The first two investors were able to double the investment of money; they used their time and their client’s time wisely.

The last investor was only able to return the initial deposit; he was cursed by his client.

Ultimately, as I see it, the last investor had two faults: fear and lack of perspective. In his fear, he took no risks; in taking no risks, he wrought no rewards. The last investor’s lack of perspective was in regards to time, both his and his clients. Time is the most precious commodity for us. The first two investors could have easily lost that money and indeed risk does not guarantee reward. However, in the limited time we have is it not better to try?

As someone once said, “Shoot for the moon. Even if you miss, you’ll land among the stars.”

Save or else

There are forces at work that think the retirement system is broken (401k, IRAs). ‘They’ say that government knows best and that ‘big brother’ should step in and take care of you.

‘Their’ theory is simple. A voluntarily contributed to the retirement system is not working. People will not and do not save enough or anything at all for their future needs.

There is some truth to that. Many people are not saving, or if they are, not enough.

For the first time in the history of modern humans, the experiment of not having to work until you drop has been playing out, and we are entering new territory.

‘They’ do have good intentions. ‘They’ want people to have a chance at a dignified and enjoyable retirement. Nothing wrong with that.

But ‘They’ are one track minded. What about those who are saving? Over 70% of employees who have access to a retirement plan at work to save, and have saved literally trillions. That’s the key; access to a plan.

The Rub — Us vs. Them

‘They’ propose to force us to save 7% or more of our income. ‘They’ want to put that into a government-run program for our future benefit. ‘They’ want to guarantee us a future. ‘They’ think they can do it better than us. ‘They’ have the answer.

Wait, aren’t we already doing that?

Does sound familiar doesn’t it? Sounds like Social Security, but it is not. The Social Security story has played out, and we see where that has gotten us.

Remember Social Security was never meant to be the main pillar of retirement; it was designed to be a safety net for widows and orphans. But all of ‘Them’ before us knew better and kept expanding and expanding its benefits to where we are today. And with those expanding benefits, came expanding expectations.

What should we call this? Social Security 2.0?

We as a nation already spend 57% of our budget on entitlement programs, and projections show that percentage exceeding 100% by 2025. Sounds like a long time doesn’t it. But, that’s only 13 years! 1999 was 13 years ago. Still feel like partying?

I’ll take the free market over government-run programs any day.

With the free market, we can:

  • Do our homework and make informed decisions
  • Benefit from competition and innovation
  • Hire and fire providers with ease
  • Exercise greater control over our own destiny

With government we can:

  • Outsource our responsibilities into the hands of a few
  • Hope that ‘They’ will have the political will to do the right thing, over many decades
  • Trust that our assets set aside won’t be ‘borrowed’ to scratch an immediate itch
  • Believe that someone else will take care of us

The Solution?

So what is the solution? I agree that for the benefit of us all, we should institute mandatory retirement savings.


Blend the power of the government to mandate what is good for us with the power of the free market to deliver superior solutions.

Take what we have learned from unions, pension plans, Social Security, and the voluntary retirement system, and re-imagine what is possible.


Are the kids saving? Like, Duh!

Andrew Answers / 16 Jul 2012 / Retirement Trends

Wrong Way

I’m way too young to talk about what the “kids” are doing these days. But I’m far too old to think that those same “kids” today had the same upbringing as I did. The new generation seems much more prepared in the realm of technology, strategy, and the idea of long-term savings and retirement. I get worried that folks aren’t saving enough. Then, I’m contradicted.

You think I’m wrong? Is your “kid” not ambitious?

Think again. Here’s why we’re both wrong.

I was most inspired to craft this blog in response to a recent article in USA Today. It’s easy to be from a different generation and judge the ones following us. Perhaps we should think again about tossing that rock in your pretty glass house.

Hindsight is 20/20

For the baby boom generation, many did not have much money growing up. Things were hard for them. What did they do? Worked hard to make a better life for the next generation. Remember how much fun the 80’s were? Now that they’re older, the kids who grew up on that middle-class upbringing are affirming themselves as contributing members of society. And sounding a lot like their parents:

“You have it so much easier than I did.”

“The internet? We had to look it up in the Library.”

“My video games had one button. ONE!”

With the economic uncertainty of a few years ago, Generation Y was busy in college and/or spending countless hours playing strategy games like Farmville and World of Warcraft. At the same time, they’re learning about real-life ways to earn gold (err – money) and level up (err – graduate or get a job).

The game[ification] of life

Taking a look at the site referred above, Gen Y’s actually do think about the future. Wouldn’t it be amazing to know that the teachings of saving in economics class actually lead to the application within video games. While playing World of Warcraft/Farmville/real life, they’re thinking why they should spend the money on this soul-eating sword/new barn/expensive car if they save it up and get an even better one down the road.

A Gen Y-er called herself realistic. I believe it’s more strategy and thinking of the long term. Not wanting to fail/lose a life/end up in economic unease, they will prevent that.

When judging that next generation, we should wonder if we’re possibly not just projecting our own concerns on them. So, we may be the ones that lost a bit more in the recent economic crash, but we need to step it up! It’s a game to them and we’re losing.

In today’s world, where everyone including our own Congress is trying to get people to spend more to keep our credit driven economy growing the message to save for emergencies or retirement is not coming through. Check that, it isn’t even being broadcast.

There are so many forces at play: unemployment, low wages, consumer debt (including student loans, mortgages, credit cards), taxes, so many taxes, government debt at all levels, unfunded public and private pension plans, and austerity measures across the board, how is a person to save?

Then there are the marketers. New cars, big TV’s, vacations like you are royalty, games, entertainment, dining out, houses full of ‘stuff’. Spend, spend, spend. Spend like there is no tomorrow, there will always be another credit card in the mail. Spend for the good of us all.

Don’t get me wrong; I am guilty of it too.

I, by nature, am a very optimistic person. I have to be to be an entrepreneur, and to be happy in this world.

I try and imagine a world where the message is save, save, save. I think we used to have that, but that was before my time.

What if we measured success not on who could spend the most, but who could save the most. What if winning the game, and garnering the envy of your neighbors came because you saved enough to get out?

Getting out means you don’t have to work. You can enjoy your time however you see fit — on your terms. Imagine what that would look like?

I realize that for all of us, employment comes from spending on goods and services. I also realize that you need to live and enjoy your time on this planet. But there must be a balance, no?

Me, I am changing how I think about all of this. I want to win, and I want to live on my terms.

What are you doing for yourself?

It’s that time of year again, time to reconcile your taxes, and either pay in even more or get some back. Doesn’t really matter either way, at the end of the day you still paid a bunch — probably more than you wanted to!

So here’s the deal:

You know you need to save for your retirement. We can help you figure out the best way, and best of all we’ll get the government to pay for it.

That’s right. The government wants to pay you to not pay them. Cool huh?

Why? It’s because they realize that there is a looming retirement crisis on our hands, and they realize that Social Security is not meant to be the main pillar of your retirement. They want and need you to save.

Here’s how it works. The government wants you to save so badly, they offer:

  1. Tax deductibility of your retirement savings
  2. Tax-deferred growth on your savings
  3. Tax deductions for the expense of having a retirement savings plan if you are a business
  4. Tax credits up to $500 a year for three years for your business if you put a plan in place

That’s a lot of tax incentives don’t you think?

It really is not complicated.

A simple question for you the owner of a business or you the employee of a business that does not have a plan:

Can you (the owner) personally afford to save $160 a month? I would hope that you said yes.

Well through the magic of math, and the generosity of the IRS, that is all you need to save to have a free retirement plan for you and your employees.

It’s a win-win-win.

  1. You the owner wins because you begin saving for retirement. At $160 a month the tax savings and the tax credits pay for the plan entirely. Any savings beyond $160 a month, and you really are getting paid to save. Or think about it this way, those tax dollars are going out the door straight to the IRS regardless. Why not legally redirect those for your immediate benefit?
  2. Your employees win. They become more appreciative, think of you as a hero, and now have the ability to save at work for their own retirement. Note, you are not required to do any matching!
  3. The government wins because you have done your part to help solve the looming retirement crisis. Thanks!

Trust yourself in 2012. We do.

Andrew Answers / 29 Dec 2011 / Retirement Trends


As is apropos right about now, this is the time of year to reflect on the comings and goings of the current year and give ourselves some lofty goals for the upcoming year based on the prior’s experience. I liked “this” about 2011, but I want to change “that” in 2012. Reflection, contemplation, and then a plan of action is created. These are our new year’s resolutions and the VAST majority of folks fail tremendously. That’s the fun of it, right?

I tend to steer clear of resolutions. While these are great goals with every intention of success when made, I cannot help but feel that the stroke of midnight on December 31 will not change much of anything. Our lives aren’t like that of Cinderella where midnight changes the outcome of some magical spell. The harsh realization is that years can fly by and there may be only small changes that affect our futures:

Get fit: Eat better, workout more, be healthy.
Learn more stuff: Speak a new language, take a craft class, do something…more!
Be money conscious: Save more, spend less, get out of debt.

Yes, yes, and yes. But do you trust yourself enough to get this done? Will this diet actually work? Who will I speak Spanish to once I learn it? Do I have the extra money to put away???

In the end, it’s all about trust. Trust in yourself. Trust in the system. Trust in the future.

Many small business employees do not feel confident or trust in their future. Like many folks read Rolling Stone, Entertainment Weekly, and Cosmopolitan, I enjoy industry rags like Employee Benefit Adviser. In fact, their recent “ByTheNumbers” article really inspired me. How is it that one in five people plan to never retire? Almost one-third of workers feel that they will not retire comfortably. Further, there’s been an 18% rise in the delay of retirement by a minimum of three more years. Even a poll of my own friends and family have shown me that some are simply not saving.

I want to help all of these people. In the end, doing nothing is the worst you could do. Let’s go through this trust again, but let me show it from my perspective.

“Retirement Trust” is not an oxymoron

A retirement trust can be defined as a pooling of accounts with multiple folks managing under one unified agreement. Your 401k or IRA is considered a trust for all of the people working together to help you get to your retirement safely. Your Third Party Administrator (TPA) creates your legal documents and keep your plan running smooth without any IRS hiccups. Your Recordkeeper is there to balance your plan ever day down the penny and ensure timely funding of money into mutual fund. On top of that, you may have a financial advisor, CPA, or your own company backing you up.

You, my friend, are not alone. No one wants to be unprepared for retirement. It seems for the past three years that there have been articles in the Sunday paper all about 401(k) regulation changes. These new regs are specifically designed to protect you. One great example is the creation of Qualified Default Investment Alternatives (QDIAs). It’s long and jargony, but in the end, states that just putting your money in money market by default wasn’t the best idea. After all, how can it grow if it’s earning such a low return?? Now, your money is put into a collection of funds that will likely bring a better return.

Knowing you have an industry of folks behind you and looking out for your interests, should help that trust by a percentage point or two. By learning a bit more about your retirement, you will see the warning signs from providers who are looking to boondoggle you into an expensive plan just because you were confused or didn’t know. Many providers are out there to take advantage of your trust. Buyer beware, indeed.

Here’s to being confident and trusting in yourself and your future. It’s really all we have to look forward to.

Happy New Year! See you in 2012!

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44 Montgomery Street, Suite 3060
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Support: 855.401.4357

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