This Time It's Different?

The late Sir John Templeton, founder of Franklin Templeton Investments liked to say, "The Four most expensive words in the English Language are ‘This time it’s Different.’"


Is it really?

The National Bureau of Economic Research states that the United States has weathered a recession in EVERY decade since the 1920′s.

It is easy to say “This time its different.” Many people are still feeling that way.
However, it is important to keep in mind a few points.


* Financial decisions (any financial decisions) should not be based on emotion.

* Historically, after every past recession, the market has gone on to hit new highs.

* Declines in the market & economy, even our most severe ones, have been temporary.

* Since 1926, the Dow Jones has had TWICE AS MANY positive returns as negative ones.

Despite more than 12 recessions dating back to 1926, $1.00 invested in the Dow in 1926 would have been worth $2045.00 at the end of 2008.

It was two years ago this week (Oct. 16, 2008), that Warren Buffett wrote his “Buy America, I Am” article in the New York Times. Buffett encouraged investors to “be fearful when others are greedy, and be greedy when others are fearful.” Since Mr. Buffett wrote this letter, the S&P 500 Index has gained 29.1% on a total return basis through the close of business on Friday October 8, 2010, according to the New York Times.

“This time it’s different?” Warren Buffett didn’t think so. Neither did Sir John Templeton. Neither should we. Investing is a long term process. Recessions are opportunities. My job as an advisor is to provide you with a beacon of hope, and see the light at the end of the dark tunnel.

Let me know how I may be of service. Contact me about the IRA Security Blanket!

Help! My 401(k) Has Fallen – And Must Get Up! is my new book. It has several ideas and strategies which will help you in your retirement savings journey. Get your ‘Fallen’ 401(k) back on its feet. Contact me to reserve your copy today. You can also get a FREE report at my website – The 5 Biggest Problems With 401(k) Plans – And How To Fix Them.

You may also listen to my weekly radio program – Improving Your Financial Health on WHME-FM in South Bend. Archives can be heard on my website as well. If you live in the South Bend, IN area, I specialize in 401(k) rollovers or IRA reviews. You can also follow me on Twitter, Linked In, or Facebook.

Its the Great Security Blanket Charlie Brown!

Get A Blanket!

Did you have a "blankie" as a child? Was the "blankie" your contstant companion, protecting you from the forces of evil? No matter what happened, your blanket was there for you.

The late cartoonist, Charles Schulz popularized the image of Linus and his blanket in his Peanuts comic strips and cartoons. You may even remember that Linus was quite skilled at using it. He could catch fly balls, use it as a parachute, and even revive a sickly Christmas tree.

If you are like most people, your 401(k) or IRA has taken quite a beating the last few years.

What if I told you that you could have your very own IRA Security Blanket?

* Protect yourself against future market disasters.

* Protect yourself from inflation and rising costs.

* Protect yourself from the uncertain future of Social (In)Security.

To learn more about how to get your IRA Security Blanket, you can contact me at http://www.helpmy401k.us/.

Help! My 401(k) Has Fallen – And Must Get Up! is my new book. It has several ideas and strategies which will help you in your retirement savings journey. Get your ‘Fallen’ 401(k) back on its feet. Contact me to reserve your copy today. You can also get a FREE report at my website - The 5 Biggest Problems With 401(k) Plans – And How To Fix Them.

You may also listen to my weekly radio program – Improving Your Financial Health on WHME-FM in South Bend. Archives can be heard on my website as well.


If you live in the South Bend, IN area, I specialize in 401(k) rollovers or IRA reviews. You can also follow me on Twitter, Linked In, or Facebook.

Can Facebook Help You Save Money?

As I have been out talking about my new book, Help! My 401(k) Has Fallen - And Must Get Up!, one of the most common questions I am asked is this -

What is the one thing I can do to fix my 401(k)?

Of course, the person asking wants a simple answer, not a lot of broker speak. So here it is. Regardless of age, gender, or income, the simplest best answer I can give is:

Save More Money!  

How's that for simple? Money Magazine released some new information in a study from their Retirement Guide 2011 (Oct. 2010 issue).  If you are 35 years old and earn  $70,000/year and you save 10% of your pay, you'll have saved $936,100 by age 65.*

By waiting just 5 years to start and doing the same - saving 10% at age 40, your nest egg at age 65 will be $697,700.* (*Assumes 3% annual pay increases and 7% average annual returns on investment into a tax-sheltered account - IRA, 401k or 403b.)

While both figures sound like a lot of money, the difference of $238,400 means a difference of what you can potentially use for income. Assuming you take out 5% per year from your nest egg ($238,400 x .05 = $11,920/year) means that by starting at age 40, you could be cutting your future income by nearly $1,000/month!

Ben Franklin often preached on the virtues of compound interest. He called it the 8th wonder of the world.

So how do we save more money? As Nike might say, "Just Do It!"

It is much easier though if you can have someone to hold you accountable. This is where Facebook might come in. What if you posted a notice on your Facebook page to your friends and tell them to hold you to it. You could "tweet" it also.

"I promise, starting TODAY to pay myself first and put 10% of my pay into my 401(k)." 

Honestly, when you see some of the others posts on Facebook (i.e. "I hate rainy days.", "Halloween is coming.", "Out walking the dog."), you'd have to feel a bit proud posting something inteligent that will make a positive difference in your life, wouldn't you? You could start a trend. Have your friends (or at least one or two) hold you accountable.  

You could also set e-mail reminders which are specific. use a personal website such as http://www.mint.com/.
Send a message to your e-mail Inbox such as "Put $1000 into my Roth IRA this month." or "Every 3rd of the month I put $400 into my Roth IRA." You could arrange these to hit your Inbox when you get a bonus or unexpected money.

Don't despair if you've turned 45 and still haven't done much. Remember we had talked about how you could still achieve an added $1000/month of income at retirement by starting now and following a disciplined goal. I'll be reviewing some other ideas from the Money Magazine retirement guide in upcoming posts.

My book, Help! My 401(k) Has Fallen – And Must Get Up! has several ideas and strategies which will help you in your retirement savings journey. Get your ‘Fallen’ 401(k) back on its feet. Contact me to reserve your copy today. You can also get a FREE report at my website. The 5 Biggest Problems With 401(k) Plans – And How To Fix Them. I also host a 30 minute weekly radio program - Improving Your Financial Health on WHME-FM in South Bend. Archives can be heard on my website as well.

If you live in the South Bend, IN area, I am also happy to help with 401(k) rollovers or IRA reviews. You can follow me on Twitter, Linked In, or Facebook.

Could You Use An Extra $1000/Month - Legally?

OK, that's a silly question. OF COURSE you could use an extra $1000/month. Who couldn't?

For someone in retirement, an extra $1000 would certainly help to make ends meet. According to a recent survey done by the Employee Benefit Retirement Institute (EBRI), only 3 in 5 retirees (60%) feel "very" or "somewhat" confident that they would have a comfortable retirement. This is sharply down from just 3 years ago, when in 2007, 79% felt confident in their retirement.

Did you also know that according to the Social Security Administration that the Maximum Social Security retirement benefit the could be earned by an individual reaching full retirement age in 2010 (age 66) is only $2346/month? Think of how many people receive less than this, and depend on Social Security for the majority of their income in retirement.

What would you do with an extra $1000/month?

Would you do more travelling? Eat out a few more times? Spoil the grandkids? Play more golf? Would an extra $1000/month in income give you a little more peace of mind?

What if I told you that YOU CAN have an extra $1000/month TAX-FREE?

No, you don't have to rob a bank or do anything illegal. This is perfectly legitimate.
No silly multilevel marketing schemes either, where you try to sell junk to your friends and family.
You don't need to be able to dunk a basketball, or pound 300 yard drives that split the fairway.

All you need to do is......

Start putting money into a Roth IRA and make regular contributions. That's it! See - simple, legal, and you get to keep your friends.

Here is how it works. Let's use a 45 year old, starting from scratch. Currently, as of 2010, the most which you can put into a Roth IRA is $5000 per year. At age 50 and older, the maximum contribution is $6000.
Let's say that our 45 year old puts in $5000 per year, and at age 50 starts putting in $6000. Let's also say that we get a return of 6% per year on our money. (Contact me for information on how to get 6%.) For someone who is 45 years old now in 2010, their full retirement age to begin collecting Social Security benefits would be 67.

Age    Roth IRA Contribution   Ending Balance (6% Return)
45       $5,000                              $    5,161
46       $5,000                              $  10,632
47       $5,000                              $  16,431
48       $5,000                              $  22,578
49       $5,000                              $  29,094
50       $6,000                              $  37,033
51       $6,000                              $  45,448
52       $6,000                              $  54,368
53       $6,000                              $  63,824
54       $6,000                              $  73,846
55       $6,000                              $  84,470
56       $6,000                              $  95,732
57       $6,000                              $107,669
58       $6,000                              $120,322
59       $6,000                              $133,735
60       $6,000                              $147,952
61       $6,000                              $163,023
62       $6,000                              $178,997
63       $6,000                              $195,931
64       $6,000                              $213,880
65       $6,000                              $232,906
66       $6,000                              $253,073 
          $147,000                          $253,073

Benjamin Franklin once remarked that Compound Interest was the 8th wonder of the world. Saving a nest egg of over $250,000 in 22 years is a great accomplishment.

If you are younger than 45, the message is start NOW. You can do even better.
If you are older than 45, the message is still start NOW!

So how do we get our $1000/month from this?
To get an income of $1000/month, just take 5% per year from this figure $253,073.

$253,073 x .05 = $12,653.65 This is our annual TAX-FREE income from our Roth IRA.
$12,653.65 Divided by 12 months = $1,054.47/Month.   

Please Contact Me for more information on how to make this work for you, and create lifetime income from an IRA or Roth IRA. If you live in the South Bend, IN area, I am also happy to help with 401(k) rollovers or IRA reviews. You can follow me on Twitter, Linked In, or Facebook.


My weekly radio show is Improving Your Financial Health on WHME-FM in South Bend, and archives are available for listening on my website.



 

  

Match Game

Employers want you in the 401(k) plan at work. The more money which is in their plan, the lower the fees should be. Also, because they most likely do not offer a pension, they want to be sure they are doing their part in helping you to save for retirement.

Many 401(k) plan sponsors are focusing on two features: automatic enrollment and automatic increases in savings as an employee's pay goes up. However, one of the biggest factors which drives plan participation is the matching contribution. Money Magazine writer Penelope Wang wrote in her March 2010 article Make the Best of a Bad 401(k) that in 2009, matches had dropped off due to the sluggish economy.

Matching contributions are great for employers though. They provide a tax deduction and studies have shown that it is a great way to get employees involved with the plan. 401(k) Plans with a match have higher particpation rates than those with no match.  

Matching formulas vary widely. According to Schwab, one of the most common formulas for matching is for the employer to offer a 50% match of an employees deferred salary up to a 6% contribution. In English, that means that the most they put in for you is 3% of your pay - and you have to put in 6% to get that.

Here is an example. Let's say that Bob earns $60,000/year at ABC Company. He puts 6% of his pay into
his 401(k) - $3,600.

                    Bob's Salary (before taxes)                        $60,000
                    Bob's 401(k)                                               $3,600
                    Bob's Taxable Pay                                     $56,400
                    ABC Match                                                 $1,800
                    Total contribution into Bob's 401(k)              $5,400

Now if Bob bumped up his contribution to 10%, he would still only get $1800 from ABC. Many advisors (myself included) believe that we should be saving 10% or more into a 401(k) plan. Over a long period of time, this should allow someone to replace approximately 75% of their income at retirement.

Let's see what happens if Bob decides to put in 10%.

                    Bob's Salary                                               $60,000
                    Bob's 401(k)                                                $6,000
                    Bob's Taxable Pay                                      $54,000
                    ABC Match                                                  $1,800
                    Total contribution into Bob's 401(k)              $7,800 

Changing his contribtuion from 6% to 10% gives him an extra $2,400/year into the plan. My book, Help! My 401(k) Has Fallen - And Must Get Up! shows that this could be huge over time. The other plus is that even though Bob raises his contribution by $2,400/year, his take home pay after taxes should only be about $1,800 less because the taxes are deferred on this. $1,800/year works out to less than $35/week.

$35/week - that's all!!

Over a 25 year period, if Bob was able to get a 7% average return on his 401(k) plan, here is the difference between 6% and 10% This also includes the employer match of 3% (50 cents per dollar, up to 6%).
The difference after 25 years is $157,493!! 

6%   ($3,600) = $359,789
10% ($6,000) = $517,282
Difference      = $157,493

You can contact me in the South Bend, IN area for 401(k) rollovers. My website is http://www.helpmy401k.us/
Get a FREE REPORT titled "The 5 Biggest Problems With 401(k) Plans - And How To Fix Them!"

My book, Help! My 401(k) Has Fallen - And Must Get Up! is written to help everyday people to get more from their retirement savings. My radio program, Improving Your Financial Health is also heard weekly on WHME-FM in South Bend, IN and archives are available on my website.

Five Situations for Variable Annuities

According to the Insured Retirement Institute, sales of Variable Annuities grew by 3% from this time last year. VAs aren't for everyone, however in the right circumstances, variable annuities offer solid benefits. There are at least 5 scenarios in which an advisor may consider recommending a variable annuity to clients.

Feel free to add your own to the list! You can contact me for more information on annuties at http://www.helpmy401k.us/

1. Lowering Income Taxes
If you are in the maximum federal and state tax bracket, a VA may help to lower your taxes. Please review your situation with a tax specialist, but a VA can work similarly to an IRA in deferring taxes until money is withdrawn from the acccount.

2. Calming Jittery Investors
This is likely the biggest reason why VA sales are up. If you are nervous about the market but still need your money to grow over time, a VA can act as a "life preserver" for your long term savings.

3. Saving Above Contribution Maximums
If you have maxed out your IRA and 401(k) and still want to save more for retirement, you can put money into a VA. If you are a small business owner, you may also consider a SEP IRA (Simplified Employee Pension). The SEP allows you to save up to 25% of your income and deduct it from your taxes.

4. Guaranteed Income
Annuities have a primary purpose of providing guaranteed income. With people living longer and needing income in retirement, having an annuity can be like setting up a personal pension plan from your savings. Look for plans which offer Lifetime Income.

5. Death Benefit
If you haven't taken income, many annuities will guarantee a death benefit of the amount you invested as a minimum. This is important, and this is where an annuity differs from ordinary mutual funds.

Here's an example. Let's take 2 investors, George and Jerry. Let's say that both of them retire at 65 years old and have 401(k) balances of $100,000. They roll their 401(k) plans over to IRAs. George invests in mutual funds, while Jerry invests in a variable annuity with a guaranteed minimum death benefit. After 4 years, we have another huge loss in the stock market, and their accounts drop to $80,000. Neither of them have taken any income out of their IRAs yet, and are still under the age of 70 1/2 when they would need to take a Required Minimum Distribution.

If George dies, he leaves the balance of his account - $80,000 to his beneficiaries. If Jerry dies, he would leave $100,000, which is what he started with, even if the value of the account is less. Of course, if the account balance in either case is more than $100,000, the death benefit would be the same as the account balance.

Annuities can be beneficial in the right situations. Please contact me and let me know how I may help further.

Ageism

Ever heard of ageism? Ageism is a term coined by Dr. Robert Butler which refers to discrimination against the elderly. How does this affect you?

As a nation, we are getting older. People are living longer than they did in previous generations. According to http://www.socialsecurity.gov/ a male who lives to age 65 can reasonably expect to live until age 82. A female at age 65 can reasonably expect to live until age 85. Earlier this year, Federal Reserve Chairman Ben Bernanke discussed the effects of aging on the U.S. economy. Mr. Bernanke stated that "the U.S. must begin now to prepare for this coming demographic transition."  
Dr. Robert Butler, 83 is in charge of the National Institute on Aging. Dr. Butler, a Pulitzer Prize winner, has also written six books about aging issues and is the the founder of the International Longevity Center. In a recent article in Investment Advisor magazine, Dr. Butler discusses his thoughts on aging. Did you know that in 2025, only 15 years from now, more than 1 in 5 persons will be 65 or older?

Dr. Butler says that older people "should probably plan to work longer than they envisioned." He adds that regarding Social Security and our workforce, "It's very obvious and striking that if people stay in the workforce longer, they put more money into the system and take less money out."

What does this mean for you?

For those in my generation (I am 46 at this time.) we need to think seriously about working longer. Also, we need to prepare for changer in Social Security. We must do a better job of saving and investing in our 401(k) or 403(b) plans. Since we don't have pensions and can't count on Social Security for our future income, the 401(k) has to be our main method for retirement savings.

Saving in a 401(k) means you have to do the work. No one else will care about your future the way you do. My book, Help! My 401(k) Has Fallen - And Must Get Up! has several ideas and strategies which will help you in your journey. Get your 'Fallen' 401(k) back on its feet. Contact me to reserve your copy today, or visit http://www.my401khasfallen.com/.

You can also get a FREE report at my website, http://www.helpmy401k.us/ The 5 Biggest Problems With 401(k) Plans - And How To Fix Them. If you live in the South Bend, IN area, I am also happy to help with 401(k) rollovers or IRA reviews. You can follow me on Twitter, Linked In, or Facebook.

My weekly radio show is Improving Your Financial Health on WHME-FM in South Bend, and archives are available for listening on my website.   

3 Big 401(k) Mistakes

I had a chance to read a great article this week by Joe Mont. Big 401(k) Mistakes That Hurt Savings - June 1, 2010. This article was interesting to me for a few reasons. The facts he outlines tell me that there is definitely a need for my book,
Help! My 401(k) Has Fallen - And Must Get Up!

Mr. Mont agrees with me that "neither the market losses of 2008 nor the robust rally of 2009 have motivated workers to make their 401(k) plans their top priority." This is based on Hewitt Associates annual retirement study.

"While it's encouraging that most workers stayed the course, most did so simply because they were disengaged with the retirement saving process or too paralyzed with fear and confusion to touch their 401(k) plans", says Pamela Hess, Hewitt's director of retirement research. "If employees continue to ignore their 401(k) plans, they're hurting themselves by letting the market dictate their retirement strategy."

Mistake #1 - We Don't Save Enough

We don't save enough in these plans! There STILL needs to be a sense of urgency. Your 401(k) = Your Retirement - PERIOD!

Pensions began to disappear at about the same time leisure suits and Betamax video did - and NONE of these are coming back! When it comes to Social Security, Americans everywhere of all ages are concerned about the Federal Government's ability to continue the program as it currently exists. Also, it was never intended to be anyone's main source of retirement income. However for 1/3 of elderly Americans, it is the source of nearly all their income. This is according to the Center on Budget and Policy Priorities.

Your 401(k) - or 403(b) if you work for a non-profit organization may be ALL YOU HAVE!

Hewitt's study also shows about 28% of participants don't contribute enough to even get the full matching benefit from their employers. That's frightening especially considering that many companies have reduced or eliminated matching contributions over the past year. Penelope Wang reports in her March 2010 article, Make the Best of a Bad 401(k) that "before the financial crisis, only 6% of plans didn't offer workers a matching contribution as an incentive to boost participation. But that number spiked last year, as another 12% of employers reduced or suspended their matches." 

Ms. Wang goes on to add - "If you have a missing or reduced match, there's no getting around the fact that you'll have to make up the difference by saving more."




Pamela Hess of Hewitt says, "It was interesting to watch employee reactions to the match suspension. We had expected some really serious impacts to the savings rates, but it didn't change things as much as we thought."

Mistake # 2 - We Don't Rebalance

Here's a question for you. How often do you visit your dentist? What would happen to your teeth if you didn't brush or visit the dentist regularly?

Just like the dentist, you need to review your 401(k) plan with a professional to make sure you are on track with your retirement goals and that you have the right mix. Balance helps you to lower your overal risk. You get your tires re-balanced to keep your car straight, and rebalancing your account serves the same purpose.

With that in mind, target-date funds have become much more popular. A 'target-date fund' is one made up of a blend of several mutual funds. You can easily spot them in your menu of investment choices because they have a year in the name of the fund. "Fidelity Freedom 2040" would be an example of a target-date fund. The year represents the approximate time in which you would wish to retire. With this type of fund, it gradually become more and more conservative as the year approaches.

Hewitt's study from Mr. Mott's article shows that in 2009, 25% of workers use target-date funds in their  401(k) plans. Mr. Mott explains that some of this is due to employers who automatically enroll their new workers into the company 401(k) plan. 69% of these employers use a target-date fund as the default option.
Greg Johnson, president and CEO of Franklin Resources says that "target-date funds will become a bigger and bigger part of the new money that's flowing into 401(k)s."  

Even if you do use a target-date fund, please review your account with an advisor. Ask them about the mix. Is it too conservative? too aggressive? or just about right? Are you saving enough to reach your goals? What will your income needs be at retirement? How will your 401(k) be able to meet your income needs? All great questions for an advisor. Don't do your own dental work! Get a pro to prevent 'decay' in your 401(k).

Mistake # 3 - We Kill Our 401(k)s From Withdrawals

Hewitt's study shows that in 2009, 7.1% of participants withdrew from reitrement plans. That is more than in any year since 2002. Loans kill 401(k)s also, and loans automatically become withdrawals once employment ends at the company. Hewitt reports that more than 25% of employees had an existing loan on their 401(k) plan at the end of 2009.

This isn't all that surprising to me. I have spoken with several people who have cashed out 401(k)s. The reasons are varied, but they all boil down to "I need the money right now." It is especially common among younger workers who don't see the future and feel the need to use the money for something else. They don't seem to realize or be concerned that this money may be cut almost IN HALF after taxes and penalties are taken out. A $20,000 account could be reduced to about $11,000 or $12,000 easily when it is withdrawn.

Joe Mont's article is right on time. Please AVOID these big mistakes in your 401(k). I have attempted to contact Mr. Mott after reading this piece and offer him a guest spot on Improving Your Financial Health. As of today, I am waiting to hear back from him.

Please contact me at my website, http://www.helpmy401k.us/ for more information and a FREE REPORT, The Five Biggest Problems With 401(k) Plans - And How To Fix Them! I'm also well equipped to help with 401(k) rollovers or plan reviews.


You can follow me on Twitter, Linked In, or Facebook. I also host a radio program, Improving Your Financial Health, on WHME-FM (103.1) in South Bend, IN.

Happy 30th Birthday!

Happy 30th Birthday!


Did you know that the 401(k) plan is 30 this year? In 1980, Ted Benna, a Human Resources representative for Johnson & Johnson was asked to put together a new retirement savings plan for the employees there. The plan he devised was based on a new section of the Federal Tax Code, section 401(k).

Section 401(k) allowed corporate employees to direct a portion of their income into a special savings plan for their retirement. There are very similar sections in the code for employees of non-profit organizations - 403(b), and for governement workers - 457(b). Employees were encouraged to do this to create their own savings AND lower their taxable income. For example, if you had a salary of $40,000/year and you were able to put $4000 into your plan, your taxable income automatically drops to $36,000. Savings plans quickly became known as "401(k) plans" from this part of the tax code.

Mr. Benna realized that pensions could not continue effectively. People were living much longer than they did in the 1930's and 1940's. Because people were living longer on average, it created a serious cash flow problem for companies. They simply could not afford to pay retirees for 20 or 30 years. We are also seeing the same problem with Social Security, which is our national 'pension' plan.

What the 401(k) plan did was to shift the responsibility of retirement savings from the employer to the employee. That changed everything!

Once Mr. Benna's new savings plan was in place at Johnson & Johnson, this idea spread like crazy around the country. Companies saw that they could save millions of dollars by eliminating pensions and having workers fund their own retirement. Companies were able to acheive even greater tax savings by making matching contributions on behalf of their employees.

So what does the 401(k) mean to you?
Why do you need one as a corporate worker?

That's simple. No one else (including your employer) will help you to save for your future! For years, financial advisors have thought of retirement income as a three-legged stool - Pension Income, Social Security Income, and income from personal savings.

Well, these days 2 of the 3 legs are broken! If you have no savings, the whole stool is collapsed. For many people I know, the 401(k) at work may be the only real savings they have. Because "life happens", as I have seen on a bumper sticker, it can be very tempting to stop putting money into your 401(k). You may also be tempted because of the doom & gloom we see on the news. Some people have also taken money out which can significantly affect your taxes.
Even after 30 years, the biggest concern with 401(k) plans is that companies don't really do much to inform their employees on how to properly use their 401(k). It's just not enough to have a guy come out twice a year and hand out packets.

Remember, this is your future savings after all! Ask questions. Work out a plan for how much you should save based on your age, income needs, and willingness to take risk.

You need to build a solid 401(k) to give yourself a chance in retirement. Without it, your future vocabulary may include the sentence "Welcome to Walmart."

Those who are unwilling to take risk should listen to what Gen. Douglas Mac Arthur says on the subject. "There is no security on this earth; there is only opportunity."

There is a difference though between taking educated and uneducated risks.

My book, Help! My 401(k) Has Fallen - And Must Get Up! will help with this. In the book, I will share secrets with you about your 401(k) which will let you get more out of the plan. For about the price of a pizza, you can learn about how to get your 401(k) back on its feet. Please contact me at my website, http://www.helpmy401k.us/ for more information and a FREE REPORT, The Five Biggest Problems With 401(k) Plans - And How To Fix Them!

You can follow me on Twitter, Linked In, or Facebook. I also host a radio program, Improving Your Financial Health, on WHME-FM (103.1) in South Bend, IN.

You DO Judge A Book By Its Cover

Well, its all coming together now. Here is the final cover design by Aimee Sims for my upcoming book "Help! My 401(k) Has Fallen - And Must Get Up!"
Currently the book is in typesetting and from there will be sent to Create Space. I am very excited about this and look forward to helping people get more from their 401(k) or IRA. Because it focuses on the
401(k), which is the biggest source of savings for many of us, and it is easy to understand - this book is unique.

It should be available to order by the end of May!

If you feel like you need your 401(k) working harder for you, please contact me. You can contact me through my website , Linked In, or on Twitter. I also host an advice program "Improving Your Financial Health" on Blog Talk Radio and on Harvest 103.1 WHME-FM in South Bend.

The book website will be http://www.my401khasfallen.com/.

Diary of a Wimpy 401(k) - Typesetting

One of the things I wasn't looking forward to with my book was typesetting. I am actually not the greatest typist in the world, and Microsoft Word isn't equipped for a clean copy. Typesetting means 'formatting' the words so that all paragraphs and spacing is even, and all graphs look clean and sharp.

When you self-publish, typesetting is one of those things that will make the book look more professional as opposed to just having it printed yourself. "Help! My 401(k) Has Fallen - And Must Get Up!" may sound like a catchy title, but I really want a professional look for it, not a 'wimpy' one. This is an opportunity to establish myself as THE authority on 401(k) plans.

I had about 2 options for this. First, I could have used Create Space, which will also assemble and print the book. Since Create Space is part of Amazon, they will also handle the customer ordering and shipping. They offered to do the typesetting also, and thought they could do it for about $1000 for my 100 page book.

They also told me that because I am using some graphs and tables in the book, I should make the size about 7"x10". Fine with me. I just need to let my graphic artist, Aimee Sims know that.

From reading "The Well-Fed Self Publisher" by Peter Bowerman, he also makes suggestions for firms which he uses to get his books done. Peter seems like a straight shooter, who knows what he is talking about, so I e-mailed a copy to a firm he endorses, Hoehne-Werner Book & Graphic Design.

I have spoken with Angela Werner there, and looked at their work on the website. Angela gave me an estimate of $800. If they are good enough for Peter, they are good enough for me. He suggests cutting costs where possible. Its also important to remember that you get what you pay for. With Hoehne-Werner, I believe it will be the right call. Typesetting is their specialty.

One thing I learned right away - I had wasted a LOT of time putting page numbers with my index. Angela suggested taking the page numbers out. Once the book is typeset, the page numbers could easily change!
"D'OH!" Oh well, I will know that next time.

The whole process should take about a month, so I am hoping to have the book out now by the end of May.

You can contact me for more information on "Help! My 401(k) Has Fallen - And Must Get Up!" at my website, http://www.helpmy401k.us/. Follow me on Linked In or Twitter also. I am currently hosting an advice show, "Improving Your Financial Health" on Blog Talk Radio, which also airs on Harvest 103.1 WHME-FM in South Bend.

James Gandolfini Won't Call Me Back

I got to spend some time this week working on the promotional video for the book, "Help! My 401(k) Has Fallen - And Must Get Up!"

I must clear up the crazy rumor that's been going around. James Gandolfini is NOT playing the lead role.....mostly because I can't get him to call me back. Bruce Willis either. (What's with these Hollywood guys anyway?)

James may be pretty useful though for those 401(k) reviews such as the one I mentioned in my last couple of posts - "Is Your Employer Wimpy?"

You know, he could tag along. We would just "have a little talk." Get these companies and their HR people to see my point of view. Bada Bing! Yes, I need to keep that idea on file.

Also, there is NO truth to the other rumor about the video. After seeing all the fuss this past week about singer Erykah Badu and her new video, I won't be shedding any clothing. The book could certainly use publicity, but you DON'T want to see me naked - TRUST ME on that!

What you WILL see when the video is done will be some cool animation with a piggy bank. My new friend Michael Rupchock (who does return calls) does some free lance video work through Pentavision here in South Bend. Michael & I worked through a small script this week and will continue smoothing it out. We are hoping it will be done in a few weeks, about the time the book should be available. This book is one of a kind, one of the few which focuses on helping average people to get more from their 401(k) plan.

Once the video is complete, I will post it here, and on sites such as You Tube. The video will also be on the book website, http://www.my401khasfallen.com/ . The website will be up once we have all the material in place to launch it. You can still contact me through my website, http://www.helpmy401k.us/.

Happy Easter!!

Legal Disclaimer: No animals or trees were harmed in writing this article. James Gandolfini was not actually contacted about making a video. He also was not harmed in any way.

Is Your Employer 'Wimpy'? - Part 2

Last week, I shared the first part of my 'adventure' with G.K. (G.K. is for Gate Keeper, a junior officer I encountered during a recent 401(k) review for a local business.) There is certainly a lot of danger in sponsoring a 401(k) plan for your employees when you don't give a s*** about it.

Danger to employees - They aren't getting the most from this company benefit - which affects their future
                                       and their abilty to retire later.
Danger to employer -   By not taking their fiduciary responsibiltity seriously, the company may be open
                                       to potential legal action.

The problem is that there are too many "wimpy" G.K.s out there. I am purposely leaving the name generic, so you may ask yourself "Is this MY company?" People like G.K. are one of the main reasons I wrote the book, "Help! My 401(k) Has Fallen - And Must Get Up!" You need to know what to do if you are stuck in a bad 401(k) plan. You also need to know what to do if your employer is "wimpy".

Anyway, as I mentioned in my post last week, I had asked G.K. my usual review questions and was suprised at her careless attitude towards their plan. She had provided me with a 2008 version of their enrollment kit. This was for me to prepare a report on their mutual funds in terms of performance and expenses.

After seeing this, I was pretty sure what to expect. I knew that I could help this company, but only if I was able to talk to the right people. I asked G.K. to please have the President and Vice President available for our next meeting. She said she would 'try' to do this. I told her how urgent this was. The others MUST be present. At the very least, have ONE of them. She needed to understand that being negligent about the plan was costing them money. Surely the other guys would get that.

We scheduled a follow-up appointment on a time when the Pres. & V.P. were scheduled to be in the office.

How did the funds look? Hmmm......imagine letting your lawn grow for several months without mowing or watering. That should give you a pretty good idea.

There were 59 funds in all! That is already a problem, even if they were all great. Imagine going to a restaurant and being handed a menu with that many entree choices (which happens). What do you do?
How long does it take to decide? If it is that hard in a restaurant, imagine poring over mutual funds.

People want SIMPLE! A good selection for a 401(k) is 15-20 funds which include the best possible ones in each asset class.

One of my resources allows me to measure funds and compare them to their peer group. A Large Company fund is compared to other Large Company funds. Internationals are compared to other internationals. In other words - apples to apples. Funds are measured in terms of performance, management fees, risk, and Morningstar ratings.

The finished report tells us very simply whether the fund passes or fails. Passing funds are printed in GREEN on the report. Failing funds are printed in RED. How is that for SIMPLE?

Guess what? Would you believe that 51 out of 59 funds were in RED?

Well, I burned up my toner cartridge and printed out 3 copies of this "tree-killer" report. That showed the problem clearly enough. Now I needed a solution for the company. We needed to address the glaring issues of monitoring mutual funds regularly and keeping fees low. As an advisor, I would also need to be pro-active in showing employees how to use the plan. As long as the "powers that be" were there, I felt pretty good about being able to serve them.

Another great benefit for the company was that because the plan held more than $1 Million in assets, there is no cost for them to change!

Ask Yourself This: If you could trade in your broken down, smelly, rusted out 1980's gas guzzler for a shiny new car - and the cost to you was ZERO - how long would it take to decide?

Wouldn't you know it though? Even though I had called G.K. the day before to confirm that everyone would be there......when I showed up, they were missing. No President. No Vice President. Only G.K.

She mumbled an "apology" without looking me in the eye, saying that "something had suddenly come up" for the guys and I could just show her my report.

"Something suddenly came up"?  What is this - a 'Brady Bunch' episode?

I showed her my report and pointed out my concerns. When I showed her the mutual funds and that 51 out of 59 were in RED, she started looking for which funds were most common to the plan. Then she looked up HER OWN PLAN to see if HER funds were Green or Red. For a few seconds, I could only stare in disbelief - What kind of MORON is this??

I interrupted the insanity. "Ummm....Aren't we missing the big picture here? Rather than try to pick out individual funds, wouldn't you be concerned that 51 out of 59 are failing? You have a real need for a system to monitor the funds in your plan on a regular basis - which lowers your company liability. Think of it this way - if you have a bunch of bananas in the house, and they've gone brown and soft, what would you do? Would you try to pick out a few good parts? Or would it really be better to replace the bananas?" 

G.K. thought for a bit, and admitted that I may have a point.

Amazing! Was I actually getting through?

Not really. G.K. sat there as I pointed out a few other red flags, then said goodbye. "I'll share this with the others. We'll call you if we're interested."

Let me make this clear. I'm not mocking G.K. and the company because they have a bad 401(k) plan. Also, I know not everyone will work with me as their 401(k) advisor. However, the reason for my anger is that the plan stinks - AND they aren't willing to do anything about it! 

Again - If you could trade in your broken down, smelly, rusted out 1980's gas guzzler for a shiny new car - and the cost to you was ZERO - how long would it take to decide?

There are too many G.K.s out there - Lazy, narrow-minded people who oversee the 401(k) at your company. That's why I wrote this book, "Help! My 401(k) Has Fallen - And Must Get Up!" due out soon. This is to help YOU fight back - AND get more from your 401(k). 

You can contact me at http://www.helpmy401k.us/. I am also at Linked In. You can pick up your free report on my website – "The 5 Biggest Problems With 401(k) Plans – And How to Fix Them".

My weekly financial advice program, Improving Your Financial Health is on Blog Talk Radio and Saturday mornings at WHME-FM.

Is Your Employer 'Wimpy'?

When was the last time you had something happen that really pissed you off - but you were also extremely thankful for it?

First, if you are offended by the word "pissed", I apologize. I use that word to get your attention and it does a much better job of describing my feelings in this case than "angry" or "mad". I was "pissed" because I witnessed some real wimpiness from an employer.

I did a 401(k) plan review for a local small business recently. These reviews are to help employers to look at their retirement savings plans and find places where they can improve. The goal for everyone is to lower their fees, reduce their liability, and provide better education for employees as well. Everyone wins!

So what pissed me off? My contact person at the company ABSOLUTELY DID NOT CARE!! It doesn't bother me if someone doesn't know their 401(k), and wants to learn. It bothers me greatly when you don't give a ****.  She wasn't even the owner, but a rather small-minded, pencil-pushing "Gate Keeper".

Why am I extremely thankful? Simple. This is one of the main reasons I wrote my book "Help! My 401(k) Has Fallen - And Must Get Up!"

There are some wimpy employers out there, and this "Gate Keeper" (I'll refer to her as G.K.) was a vivid example of what's wrong with many 401(k) plans today. She is part of a 3 person 401(k) committee, which also included the company president and V.P. The first part of my review is a questionaire and gathering information about the funds in the plan.

Money Magazine Senior Writer Penelope Wang wrote a recent article "Make the Best of a Bad 401(k)" . She points out that "even the nation's biggest 401(k) plans fall short in some key areas". 

Employers must understand that they have a fiduciary responsibility to their employees. If a retirement plan is offered by the company, it needs to include the best possible mutual funds at the lowest possible cost. Also, employees must be kept well-informed about how the plan works and what the benefits are.

Fiduciary responsibility is not just a "good idea". Its the law, part of the Pension Protection Act of 2006, and recent updates to ERISA (Employee Retirement Income Security Act).  Companies may be exposed to potential lawsuits by not doing their best for their employees.

Let's get back to "G.K." Here are some of the highlights (or lowlights) of her responses to my questions about their plan.

Q: How often does the trustee committee meet to review the plan.
A: We let the advisor take care of that. 

Q: Are all 3 members of your committee aware of the meaning & responsibility of being a 'fiduciary'?
A: Yes. 

Q: Are you also aware of potential personal liability which comes with fiduciary repsonsibility?
A: Well, that's what we have insurance for.

Q: How does your company help the participants in the plan to make informed investment decisions?
A: Information is available on-line and they can call the advisor. 

Q: How often does he meet with your employees?
A: I think once a year. People can call him if they have other questions.

Q: What process do you use for monitoring the mutual funds in the plan for performance and expenses?
A: We rely on the advisor for that.

Q: Do you have a current enrollment kit?
A: (She handed me a packet from 2008 - NO KIDDING, I couldn't make this stuff up!)

Q: Do you have a more current kit?
A: Our advisor needs to get us some new ones. We haven't had any new employees so it hasn't been
     needed.

Q: How are employees kept informed of mutual fund expenses?
A: We rely on the advisor for that.

There is more, but you get the idea. People like G.K. just don't get it. Her small-minded attitude costs her company money. She is also depriving the employees there of their rights to learn more about their benefits and their rights to better investments. (I will talk about this in the next segment. Stay tuned - it gets MUCH WORSE when we review the investments.)

The bad news is that there are plenty of G.K. s out there. If I were an employee at this company, I'd either want a different person in charge of the 401(k) plan or learn what my legal options are. G.K. is a time-bomb.

You can contact me at http://www.helpmy401k.us/ . Pick up your free report on my website – "The 5 Biggest Problems With 401(k) Plans – And How to Fix Them". My new book, "Help! My 401(k) Has Fallen - And Must Get Up!" is due out in April.

My weekly financial advice program, Improving Your Financial Health is on Blog Talk Radio and Saturday mornings at WHME-FM.      

 

Diary of a Wimpy 401(k) - Editing

Today I spent some time on editing. I had sent out my book to several people and have gotten some good feedback on it.

If you ever write a book, I would absolutely recommend having others take a look and do editing for you. It's almost impossible to do it yourself. I know I probably still missed and have a typo somewhere. Some of the editing also involved changing wording to make it clearer.

One thing that did make me feel a bit better - I was reading "The Christmas Sweater" by Glenn Beck ("Wimpy", I know.) recently and noticed a typo in it. I'm not going to say what or where - you can find it on your own. But its nice to know that others slip up too.

The hardest part was putting together an index. I had done one a few weeks ago and put page numbers on everything. Now with my edits, it changed the page numbers. (As Homer Simpson would say - "D'OH!")
A book like "Help! My 401(k) Has Fallen - And Must Get Up!" definitely needs a good index and also a guide for resources and websites. This book uses several resources for 401(k)s as well as financial authors.

I also had a chance to speak with Pentavision once more. I'm very excited about doing the video for it - even if I can't get Bruce Willis to star. It should be about 30-40 sec and will go up on You Tube when its done. To save on costs, I am trying to locate images myself and send them to be added in.

Also, the domain name is http://www.my401khasfallen.com/ .You can try to go there, but the site isn't ready yet. Once the cover and video are done and also some other details, I'll get it up & running.

In the mean time you can still contact me at http://www.helpmy401k.us/ . Pick up your free report on my website – “The 5 Biggest Problems With 401(k) Plans – And How to Fix Them”.


You may also contact me on Linked In or Twitter . I also host a weekly financial advice program, Improving Your Financial Health on Blog Talk Radio and WHME-FM.

Diary of a Wimpy 401(k) - Wimpy Friends

The interesting thing about writing a book - I am learning who my friends are.

One of the things I had wanted was to get testimonials from people from all walks of life. The book was written in simple language with plenty of stories to make it easy for anyone to understand.

We all have a 401(k) or 403(b) - almost all of us anyway. Unless you are self-employed or one of the rare few who still have a pension.  

So about a month ago, I sent requests for testimonials to about 65 people. Some I knew better than others. Some were financial experts who I had interviewed on "Improving Your Financial Health". Some were friends in the financial industry. Some were friends and clients I knew locally, or small business owners. Still others were people who were involved in the project in some way. 

A few were celebs who I didn't know, but I wanted to get a testimonial from them.

In asking for testimonials, I believe that we are all very busy. I am willing to be patient and follow up a few times to get testimonials. These 'blurbs' from others can help to promote the book.

If you have a 401(k) and you aren't happy with it, and you are nervous about the future, you should read this book!

One guy (a writer whom I won't name) turned me down, but was very nice about it. He explained that he gets many similar requests and he simply does not have time to answer them all. He also didn't believe that his testimonial would carry much weight, with him not having a financial background.

Although I was slightly disappointed, I appreciated his sincerity and his prompt response.

I've also had a few of my financial heroes tell me that although they like the book and see its value, they aren't allowed to respond due to compliance constraints. Again, I respect this.

That's one way to do it. Here's the WRONG WAY!

Another previous guest on my program (I won't name her - but I promise she WON'T BE BACK!) had her assistant send this "snooty form letter" remark. "As a policy, our team focuses on content that is being published by a major imprint. We don’t read or consider unsolicited material. Should your book get picked up by a major imprint, please do feel free to reach out to me at that time, and I’ll do my best to get it to (her) for a possible endorsement."


Again, this type of chilly response really alienated me. I've lost a lot of respect for this person and needless to say, she won't be back as a guest on my program.

I am still looking for testimonials. I've gotten several very ones so far. Let me kinow if you'd like a copy of the book for review. If you want to learn more about 401(k)s and think you can write a couple of kind words - contact me and I will gladly send you a copy of the draft.

Here are some of my favorite testimonials so far.

"Unless you plan to work till you drop, the 401(k) is your eventual ticket to freedom. Your plan may have fallen in 2008 and Dean Voelker is just the person to help get it back up." -

Jonathan Chevreau, Financial Post columnist, and author of Findependence Day.

“Dean Voelker does a great job of laying out the case for aggressively pursuing your 401(k). This book presents compelling reasons for getting involved in your future TODAY, rather than tomorrow. Dean’s story telling approach takes the 401(k) from its birth through today in an easy to read and storytelling manner.” - Len Fox, author of Recipe Investing.

“Dean Voelker is a real pro. He reveals some things about the Social Security system and how
401(k)s work that I never knew. This book is short, sweet and to the point. Everyone needs to read it quickly to see if they are doing what they should to get their retirement plans back on track. Thanks, Dean for putting this together for us.” - John S. Cohoat, President of Cohoat Business Growth Advisors, and author of No Thank You, Mr. President.

Go ahead, don't be "wimpy". Contact me today. You can also get a copy of a free report on my website -
"The 5 Biggest Problems With 401(k) Plans - And How to Fix Them"

You may also contact me on Linked In at http://www.linkedin.com/in/dvoelker or Twitter at http://www.twitter.com/deanvoelker. I also host a weekly financial advice program, Improving Your Financial Health at http://www.blogtalkradio.com/401kcoach.







 

Diary of a Wimpy 401(k) - A Picture Is Worth....

I had a chance to speak with Aimee Sims. Aimee will be working with me on the design of the book cover. You know the saying "Don't judge a book by its cover." Whether we think so or not, that is exactly what we all do.

Aimee was referred to me by my friends at Pentavision, Michael Lacognato and Missy Stanisz. Pentavision may also be helping me with a video idea for the book. More on that to come.

Anyway, since I am using this blog to detail the printing process, here is the first effort. Thanks Aimee for your help on this.

Here are a few other images which we are talking about as well.

If you could, I'd love to get feedback on these potential cover ideas. Good? Bad?
What may cause you to pick up the book in a bookstore?

Thanks for your help and I will keep you posted.

Diary of a Wimpy 401(k)

OK, here we go. One of the things I have done so far in the publishing process was to read a book titled "The Well-Fed Self Publisher" by Peter Bowerman. Mr. Bowerman has some very good & practical ideas on why it is better to self publish instead of going through a publisher.

Kudos to my good friend, Nikki Stauffer who recommended the book. Nikki always seems to come through for me when I really need some advice. If her firm was willing to promote the book, I'd hire her in a heartbeat.

Bowerman told several "horror stories" about publishing houses. Most people have a fantasy that they can simply write a book and sell a gazillion copies and then live like John Grisham for the rest of their life. Needless to say, I am pretty grounded in reality. The truth is, many authors have a hard time getting it published. Jack Canfield, author of the "Chicken Soup" books has a favorite word when he was getting multiple rejections - "Next!"  

Anyway, even if you finally do get a publisher to take on your book project, and a promotion agent to write a press release, you will still end of doing the promotion leg work yourself. also, the publisher gets to keep most of the money. He shows examples of authors who wrote books that sell for about $15 and their cut is about .50 per book. Now THAT is wimpy!

According to Bowerman, once they write the press release, the publisher is done. On to the next Stephen King wannabe. There is only one person in the whole world who really cares about making sure that your book is promoted regularly - the author. So if you have to promote it yourself, why not publish it yourself.

The whole reason for this book was that I was meeting many people in this area who really weren't getting the most from their 401(k). Northern Indiana is one of the hardest hit areas for unemployment, and many folks simply cashed it in, in spite of taxes and penalties. Others who didn't cash in stopped contributing to their 401(k) especially if their company stopped matching contributions. There is no doubt in my mind that people need to have a much better understanding of how the 401(k) works.

Someone needs to say - This is your retirement plan. It may also be the only savings you have, so you'd better stop being 'wimpy' about it and start saving.

"Help! My 401(k) Has Fallen - And Must Get Up!" reveals little known secrets about 401(k) plans and IRAs. If you read the book, you will understand them and get more from them.

That's all for today. I really apreciate those who have been reading this, and those who have been supporting me. Also thanks to those who have been listening to "Improving Your Financial Health" on either Blog Talk Radio or WHME-FM.      

Diary of a Wimpy 401(k) - Day One

I haven't blogged much lately for 2 reasons. First, I have spent most of my spare time on my book, which is basically finished, at least the writing part. It is titled, "Help! My 401(k) Has Fallen - And Must Get Up!"

That was the easy part. Now comes the hard part - getting it off of my computer and into book form. Then we need to get it into your hands, and the hands of those who need help with their 401(k).  

Then I had an idea......why not write a diary? I could log the process of getting a book published.

My daughter has really enjoyed the "Diary of a Wimpy Kid" books by Jeff Kinney, which is now being made into a movie. The books really are funny, and bring back a lot of middle school memories. (OK, Jeff - since I just plugged your books, please don't sue me.)

My other inspiration here was from the movie "Julie & Julia". Don't worry, I can't talk like Julia Child, or cook like her. My main culinary feat is chili, and I don't think Ms. Child ever did that!

The movie talked about how the other main character, Julie Powell, wrote a daily blog about Julia Child's cookbook "How to Master the Art of French Cooking".

So, I have decided to chronicle my adventures of getting the book "Help! My 401(k) Has Fallen - And Must Get Up!" into print. Stay tuned, this could get 'wimpy'.
 

Fixing Your 401(k) - Part 2

Problem #1 - Participation

How much are you putting into your 401(k) or Retirement Plan at work? Do you even participate?

According to Gregory Crawford in a memo to President Bush in 2005 "The Looming Retirement Disaster", 50% of all workers participate.
http://findarticles.com/p/articles/mi_hb5266/is_200504/ai_n20432510/
Of the ones which do, only 10% put in the maximum allowable contribution. (Currently
$16,500. Employees who are 50 or older may contribute an additional $5000 for a max of $21,500.)

According to Financial Engines (http://corp.financialengines.com), Daisy Maxey tells us in her 2008 article that we aren't saving enough. Jackson Life also did a survey asking people on the street what they put into their 401(k) plans and the results were shocking.

Salary Avg % of Salary Contributed $ Amount/Year
$25,000 5.0% $1250
$50,000 6.0% $3000
$75,000 8.1% $6075
$100,000 9.2% $9200

All of those amounts fall far short of the maximum allowable contribution, and probably won't be enough to retire and make it last for 25 years or more.

Let's say you make $75,000/year and put in the average of $6075. Lets also say you contribute for 20 years, get an average return of 8%/year and your employer matches your contribution dollar for dollar up to 4%. Sounds pretty good so far, right?

After 20 years, you would have saved $431,901. Still sounds good, doesn't it?

OK, now lets shift into retirement mode and start to withdraw 5% for income. 5% on $431,901 is
only $21,595 per year! Remember you had been earning $75,000 per year. Also we haven't even accounted for inflation, market volatility, or any events - college for kids, vacation trips, home repairs, buying cars, etc. (Did someone say "Walmart"?)

Dave Ramsey says we work too hard to retire in poverty. He also believes, as many advisors do that people need to be putting in 10%-15% of your income. The beauty of the 401(k) is that your contributions are pre-tax.

If we use the same example at $75,000/year and put in 15%, our contribution now is $11,250/year. That is a difference of $5175/year from $6075. That sounds like a lot ($432/mo),
but remember this is pre-tax. http://retire.hartfordlife.com/sites/retire/paycheck_calculator.html

Using the paycheck calculator, the difference in monthly take home pay is $311, which is a tax advantage to you of $121/month.

Does it make a difference later? Let's see. http://www.helpmy401k.us/investment-tools.htm
Over 20 years, we put in an extra $103,500, and our saved total is now $683,672. Now if we draw out 5%, our annual income is $34,183, or an extra $12,589/year!

For more information, please contact me at www.deanvoelker.com.