Despite offering unique tax advantages, lots of people remain unaware of health savings accounts (HSA)—and even many who are using them aren’t using them to anywhere near their full potential.

Jeremy Keil, CFP, CFA, a retirement-focused financial advisor and host of both the Retirement Revealed Podcast and Mr. Retirement YouTube channel, joins the 401(k) Specialist Pod(k)ast to discuss the most common mistakes he sees people with HSAs making, as well as how to help correct these mistakes with strategies that make the most of their exceptional capabilities.

Key Insights Include:

Common HSA Mistakes: Many employees mistakenly believe they can only use the health savings account provided by their employer, limiting their options. Another prevalent error is confusing HSA contribution limits with FSA limits, resulting in underfunding their HSAs. Additionally, many fail to invest their HSA funds for long-term growth, missing out on the substantial tax advantages and investment potential HSAs offer.

Maximizing HSA Benefits: To rectify these mistakes, employees should be aware they can transfer their health savings account funds to any provider offering better terms. Maximizing contributions up to the IRS limits ($4,150 for individuals and $8,300 for families in 2024) is crucial. Investing health savings account funds similarly to a traditional IRA can significantly enhance their retirement savings, capitalizing on the unmatched tax advantages of HSAs.

Strategic HSA Management: Advisors recommend finding the best health savings account provider, considering factors like interest rates and investment options. Real-world examples show substantial gains from switching to high-yield HSAs and avoiding unnecessary fees. Proper management, such as keeping receipts for future reimbursements, allows for strategic use of HSAs, ensuring funds grow tax-free and can be utilized efficiently in retirement.

SEE ALSO:

• Checking the Pulse of the HSA Market with Devenir’s Eric Remjeske

• HSA Contribution Limits Increased Slightly for 2025

The DOL’s new fiduciary rule is scheduled to become effective in September, and retirement plan advisors and plan sponsors have plenty to do to prepare for the changes it will bring.

Jerry Schlichter, founding and managing partner of Schlichter Bogard LLC and a well-known pioneer of retirement plan excessive fee litigation, visits the 401(k) Specialist Pod(k)ast to share some important insights on the upcoming changes, legal challenges and what advisors need to be doing to prepare for compliance.

SEE ALSO:

• Fred Reish Unpacks the DOL’s New Fiduciary Rule

• Nine Insurance Trade Groups Sue DOL Over Fiduciary Rule

Health Savings Accounts can be a very effective tool not only to pay for out-of-pocket medical expenses, but also to save for retirement thanks to a unique triple tax advantage.

To check in on the pulse of the HSA market, we talk with the co-founder and president of Devenir Research Eric Remjeske, who is also a co-author of the semi-annual Devenir HSA Marketplace Research Report, recognized as the industry standard for tracking health savings account market statistics and trends.

We’ll cover the key findings from the latest report while also talking about some market growth projections, thoughts on why more people aren’t using them as a savings tool, and 2025 HSA contribution limits.

SEE ALSO:

• Health Savings Account Asset Growth Booming

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:

1. 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.
2. 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.
3. 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

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:

1. 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.
2. 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.
3. 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’

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.

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.

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).

Unlocking the Door to Broader Adoption of Guaranteed Lifetime Income in 401(k)s: Matt Gray and Todd Levy

Guaranteed lifetime income remains a hot topic in the workplace retirement plan market and there are plenty of factors at play these days that are helping these solutions gain traction—and more widespread adoption—in 401(k) plans.

Matt Gray, Assistant Vice President, Workplace and Middle Markets at Allianz Life, and Todd Levy, a “first mover” for lifetime income in DC plans who is Managing Director of RIA for The Retirement Plan Company, join the 401(k) Specialist Pod(k)ast to discuss how these products are evolving to meet the wants and needs of 401(k) participants.

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.

Catching Up with 'Annuity Yoda' Tamiko Toland

Guaranteed in-plan lifetime income solutions is a hot topic in the workplace retirement market these days, and we wanted to hear from one of the foremost experts on these products in “Annuity Yoda” Tamiko Toland.

After stints at TIAA and CANNEX, the thought leader in retirement and annuities in the individual and institutional markets last year started Toland Consulting, LLC, to share her insights, experience, and strategic analysis with clients, and she’ll also tell us about a couple of other new gigs keeping her busy these days—all with a focus on helping to educate people about lifetime income solutions.

The Year Ahead with John Hancock Retirement CEO Wayne Park

As the new year opens, our first podcast of 2024 features a look at what to expect in the workplace retirement market from a high-level leader in John Hancock Retirement CEO Wayne Park.

With oversight over all aspects of John Hancock Retirement’s business, Park is an ideal person to shed insight on topics that will impact the workplace retirement business this year, particularly as they relate to emerging opportunities in the small plan marketplace.

He talks about impacts of SECURE 2.0 and state-mandated IRAs, why advisors should be attracted to the small plan market, and what retirement savers should be focused on in the year ahead.

IBM sent shockwaves through the retirement industry recently when it was revealed that the tech and computing giant is halting its 5% 401(k) match in favor of a 5% contribution to a new, portable, immediate-vesting pension called a “Retirement Benefit Account.”

Joining us to discuss this move and its wider implications within the retirement industry is someone who knows the defined benefit market very well in Brian McDonnell, Head of the Global Pension Practice at Cambridge Associates. There he oversees the firm’s work with more than 150 plan sponsors, and also works directly with clients as their OCIO.

He'll explain why the move happened, whether (and why) other plan sponsors might be considering it, and key trends he sees impacting the defined benefit space in the coming year.

2024 SECURE 2.0 Insights with Principal’s Lance Schoening

As we head toward 2024, more and more provisions of the landmark SECURE 2.0 retirement reform legislation package are coming online, including some provisions that have lots of people in the industry really excited.

One of those people is Lance Schoening, Director of Policy at Principal, the sponsor of today’s podcast. As the person responsible for the company’s analysis of retirement legislation, he’s well-versed in all things SECURE 2.0, and shares insights on a number of new provisions.

He’ll also explain why he’s excited about the start-up tax credits, and why retirement plan advisors might want to take another look at the small plan market because of them.

Talking DOL Retirement Saving Priorities with EBSA Head Lisa Gomez

It’s been about a year since the Honorable Lisa M. Gomez was sworn in as the Assistant Secretary of Labor, and quite a busy year it’s been for the head of the Employee Benefits Security Administration, which is responsible for administering, regulating and enforcing provisions of ERISA.

She joins the 401(k) Specialist Pod(k)ast to talk about topics including the high-profile rewrite of the conflict of interest rule, SECURE 2.0 and its ability to address the workplace retirement plan coverage gap, and what EBSA can do to help plan advisors, plan sponsors and participants make the most of 401(k) plans to save for retirement.

When you want to gain insight about what’s going on in the retirement industry, you want to talk to someone who’s in the loop and immersed in the business. We can’t think of someone who fits that description better than Jania Stout.

401(k) Specialist’s “Top Advisor by Participant Outcomes” in 2020 is now the Senior Vice President, Retirement + Wealth, at OneDigital, where she brings over 22 years of experience in ERISA plan consulting to her role as Practice Leader.

She fills us in on the latest when it comes to helping participants tackle the difficult task of paying down debt while still saving for emergencies and retirement, momentum building for in-plan guaranteed income solutions, and how artificial intelligence can complement—and not compete with—advisors.

Capitol Hill Retirement Reform Update with Invesco’s Jennifer Flitton

With 2024 quickly approaching, it’s a good time to check in on the status of retirement reform efforts and progress in Washington D.C.—particularly as the industry prepares for a variety of SECURE 2.0 provisions scheduled to kick in come January.

To learn where things stand on a variety of key retirement issues, this episode of the 401(k) Specialist Pod(k)ast is proud to feature a true Capitol Hill insider in Jennifer Flitton, Head of US Government Affairs at Invesco. In her 15 years in Washington, Flitton has developed a deep understanding of how things work behind the scenes and an uncanny knack for knowing when things will pass, not pass or get delayed.

We’ll ask her about the SECURE 2.0 technical fixes, whether there’s any movement on CITs in 403(b)s, who will become the next congressional champions of retirement reform, and finally, whether the federal government is poised to allow alternative investments greater access to defined contribution plans.

Andrew Biggs Explains Why There is Really Is No Retirement Crisis

In an environment where Americans are repeatedly told by mainstream media that they are facing a serious retirement savings crisis because they aren’t saving enough, there’s one person who repeatedly stands up to refute these claims.

Andrew Biggs, Senior Fellow at the American Enterprise Institute and a former Deputy Commissioner of the Social Security Administration, explains why he thinks most Americans probably are indeed saving enough for retirement, and how what he says are “flawed” calculations exaggerate the shortfall of Social Security’s retirement income replacement rate.

SEE ALSO:

• Biggs: Social Security Exaggerates Shortfall of Retirement Income Replacement Rate

Building Client Relationships with Advisor Derek Fiorenza

Derek Fiorenza, C(K)P, CPFA, AIF, PPC, MSBA, is wired a little differently than the typical retirement plan advisor. He joins us to explain the somewhat unique approach he has to building client and participant relationships.

Fiorenza, who serves as the Vice President, COO and CCO of Summit Group Retirement Planners in the Philadelphia area—a firm he co-founded with his father Anthony Fiorenza in 2013—has earned several accolades as a “top advisor under 40” and the company has been named a top DC advisor team by NAPA multiple times.

He also talks about why he regularly attends the NAPA Fly-In Forum in Washington D.C., addresses the retirement industry’s coverage gap, and tells us about a passion profit in the form of a non-profit he founded to help feed the hungry.

Lifetime Income Solutions in 401(k)s

Allianz Life’s Joe Hendrickson and AmericanTCS’ Brian Lenz Discuss Market Momentum

In-plan guaranteed lifetime income solutions, such as annuities, have received plenty of attention in the wake of the SECURE Act of 2019 and 2022’s SECURE 2.0 legislation, which made it significantly easier to add these types of solutions into 401(k) plans.

Here to talk about how these solutions are being adapted for defined contribution plans – and how they are being presented in the real world to 401(k) participants – we have Joe Hendrickson, Vice President of Strategy & Relationship Management at Minneapolis-based Allianz Life Insurance Company of North America (Allianz) and Brian Lenz, Chief Sales Officer at AmericanTCS, an early adopter bringing lifetime income options to plans sponsors and participants.

The discussion includes how the market is changing, how the solutions are being implemented at the plan-level, the challenges being faced in bringing these solutions to participants, and how to help them understand the products and the 5-year outlook for lifetime income solution adoption in the employer-sponsored retirement plan market.

Fred Reish’s DOL Fiduciary Rule Update

The retirement industry will be keeping a close eye on the Department of Labor in August in anticipation of proposed regulation regarding its fiduciary rule, and whether or not a retirement plan-to-IRA rollover recommendation made by an advisor who is a fiduciary to a plan or participant constitutes a fiduciary act, necessitating the use of Prohibited Transaction Exemption 2020-02.

To help us sort out what’s going on with the DOL’s fiduciary rule, we can think of no better source than noted ERISA expert and Faegre Drinker Partner Fred Reish.

In this edition of the 401(k) Specialist Pod(k)ast, Reish provides an overview of the issue, what approach he thinks the DOL may take, provides a timeline for the regulation and some key thoughts on what this all means for retirement plan advisors.

Retirement Advisor Marketing with Rebecca Hourihan

We were curious to learn more about what 401(k)-focused advisors are doing with their 401(k) marketing efforts these days, and what kind of investments in time and resources they are making in efforts to grow their business.

For answers, we checked in with Rebecca Hourihan, Founder and Chief Marketing Officer with San Diego-based 401(k) Marketing, a full-service marketing agency for retirement plan professionals. A familiar face on the retirement industry conference speaking circuit, Rebecca works with a wide range of top retirement plan professionals, providing help with customized marketing materials, campaigns, websites, and expert content collateral.

In today’s podcast she talks about the use of content marketing, effectively reaching different generations, advisor use of artificial intelligence, and what kind of investment most retirement advisors are making in their marketing efforts.

Exploring the Mid-Cap Market with Invesco’s Justin Livengood

Our guest today makes the argument for why mid-caps as an asset class belong in a properly diversified defined contribution plan investment menu, and explains why most 401(k) participants are probably not aware of just how overly exposed they are right now to just a handful of the biggest companies.

Here to explain it all is Invesco’s Justin Livengood, CFA, who is the Senior Portfolio Manager for Invesco’s mid-cap growth and health care strategies, and Senior Research Analyst for the Discovery and Capital Appreciation strategies, where he covers the health care, financial services and real estate sectors.

He covers why mid-caps are an incrementally good way to help retirement plan participants achieve an optimal level of diversification, why active management is preferable to passive in mid-caps, and provides a high-level view of what’s happening in the macro environment right now as well as the near-term outlook.

The rapid emergence of artificial intelligence and Chat GPT specifically has raised a bunch of fresh questions about the role it will play in financial advice, and how it will impact the work and role of financial advisors moving forward.

High-profile advisor Michael Kitces—the “Chief Financial Planning Nerd” at Kitces.com, Head of Planning Strategy at Buckingham Wealth Partners, Co-Founder of the XY Planning Network and face of the popular “Nerd’s Eye View” financial planning blog—has an interesting perspective on the topic of AI in financial planning and shares it with us on this episode of the 401(k) Specialist Pod(k)ast.

Kitces recently posted a blog titled, “Why Chat GPT is No Threat to Real Advisors,” and here he expands on thoughts behind why advisors should not fear artificial intelligence, but embrace it for how it can save time and create efficiencies.