This month our Financial Planning “Todd Talk” went virtual, via Zoom, for the first time ever. As we are all navigating the changes brought upon us from COVID-19 we had a chance to focus on most people’s largest asset in retirement, their 401k. This month’s topic was geared towards 401k plan sponsors (employers) and what they should be doing to monitor their plan on behalf of their employees. We discussed, “Why Now is the Perfect Time for Plan Sponsors to Review Their 401k”. Typically, large scale changes such as legislation or market adjustments increase the need for a plan review. Joining us for this month’s Todd Talk was Brad Arnold of Limestone Pension Associates.

We started with a deep dive into the CARES Act and its impact on retirement plans. Brad touched on the law itself and the 401k adjustments which are applicable only until December 31, 2020, including new allowable distributions, loan capabilities, and a unique required minimum distribution (RMD) exemption for the year 2020. While these new options are available, the 401k is usually the absolute last resort when it comes to distributions.  As a bonus to this section, we discussed Cash Balance Plans in relation to the CARES Act.

Brad also touched on the SECURE Act and its financial implications. When originally passed, we believed this legislation would be the big news of 2020. Who knew what 2020 had in-store and the SECURE Act was largely overshadowed by the CARES Act.  While some of the new regulations in the SECURE Act may have slipped by unnoticed, we discussed some of the more impactful changes, including RMDs now moving to age 72.

Todd and Brad then finish off the webinar as they explain the importance of reviewing plan investments given market conditions and provide some key insights into investment risk with various retirement plan options.  If you would like to view the June 2020 Todd Talk in its entirety, send us a note to virtualassistant@bluerockdb.com and we’ll forward you the link!