The retirement crisis, saving tips, and challenges facing the retirement industry: things we should all know about to prevent our own retirement nightmares. Chad Parks, CEO of The Online 401(k), sat down with Richard Procter of San Francisco Business Times to discuss his experience creating a small business to help other small businesses, where his company is heading in the foreseeable future, and what you can do to create the future you want with advice from his own lived experience as an entrepreneur.
Get the article here or read the full Q&A below!
How’s business: It’s never been better. We have just been growing steadily year over year. There’s a lot of reasons for it. I think the recession was a good wake-up call for people that they need to get back to saving.
Biggest challenge for your business at the moment: Just getting more people to know about us. I think that would definitely be the primary challenge. Internally, there’s always challenges with growth. How do you grow different areas simultaneously?
What’s going to change at your company in the next year: We’re going through a major rebranding. The new entity will be called Ubiquity Retirement and Savings. We’ll be expanding savings products that we offer to both businesses and individuals. We have a payroll reduction IRA (basically 401k on training wheels). In addition to that, we offer contributory IRAs for employees whose workplaces don’t offer payroll savings.
Is that new to the industry or just new to your company: New to us for sure. It’s not new to the industry in the sense that you could go to any financial institution and open an IRA. Anyone is willing and able to do an IRA for you. However, most of them are interested in you doing a rollover IRA. Very few are interested in you opening that account to simply save $50-$100 a pay period. What makes ours different is that we’re happy to take small contributions. We offer investments that are easy to understand and easy to pick.
Are you hiring: We are hiring for the client servicing side. We’re looking for a client success champion, someone that can come in and take our service to the next level and really deliver on those higher expectations. It’s hard to find that person. We’re also hiring sales people left and right. I’ll take as many qualified sales people as I can get.
Reason for starting business: I was a certified financial planner and I was working with a lot of small business owners and helping them with their own plans. Nine times out of 10 I would say, “Part of what you need here is a retirement plan.” My clients never disagreed and I said, “I’ll go find something.” It was such a complicated and hard-to-understand process. It all just made sense to me that the web is the great equalizer and will allow us to serve the fragmented small business community. The enormous size of the market made me think this is a good area to be in.
Most difficult part of decision: I was 28 when I started it. I didn’t know the direction it was going to go in; I just knew it needed to be done.
What do you wish you had known from Day 1: I would have set more realistic expectations.
Toughest part about being an entrepreneur: Trust your instincts and trust your gut. Know that you may be in an awkward position sometimes and stop second guessing yourself.
First choice for new career or venture: I would be a culinary anthropologist. I would be Anthony Bourdain. He has the best job in the world.
Dream retirement scenario: What’s utopia? For me, a beach in Thailand sounds good. Seventy-five cent pad thai and dollar beers. I could live on that for a while.
Retirement nightmare: What we’re seeing today is that most people haven’t saved enough. The fear is to outlive their money. Healthcare costs are going up at an uncontrollable, unpredictable rate. You don’t want to become a ward of the state. That’s a bleak answer to a bleak question.
Retirement tip: It’s tackling the basics. Getting control of your personal finances if you’re not already doing so. Come up with a monthly budget. If you’re able to identify where everything is going, can you set some aside and begin saving? First and foremost, you need some cash on hand, and then that builds momentum. It has to start there.