Are You “Mad” At Your 401K

Posted on August 28, 2012. Filed under: Uncategorized | Tags: , , , , , , , , |

As a company we like to keep things lite in the office given the nature of our work so from time to time we follow Jim Cramer. I mean this guy is great entertainment, and always good for a few laughs. One of his recent rants on Mad Money was about the so called scam of 401k’s. (here is the link to the article ).

After reading the article, mad man Cramer does make a couple of valid points, that most company plans are not that great given the high fees, administration costs, and sometimes bad choices for investments. However he is quick to point out the tax benefits and possibility of free money from a company match. His suggestion is to contribute to the 401k plan until the company match is maxed out and then make contributions to an IRA where you have greater flexibility with the investment choices.

This sounds great and is fundamentally correct but Mr. Mad Man forgets that most participants in 401k plans will never achieve maxing out the company match let alone funding a separate IRA. But let’s play along with Cramer’s suggestion and the participant is maxing out the company match and starts contributing to an IRA, how many of them will know what to buy in the IRA? His suggestion is dividend paying stocks, again great point but the average American will not do this.

Here is our suggestion, if you are an advisor that works with 401k plans you have the opportunity to bring tremendous value to your client by showing them that you can provide every participant with specific unbiased advice for their 401k plan and also be available for expert advice on outside investments like an IRA. Maybe this time people should really listen to Cramer because in this instance the Mad Man is not too far off.

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RJ20 New Services Help Your Participants

Posted on June 6, 2012. Filed under: Consultants | Tags: , , , , , , , , |

Participation Is Up, But Goals Not On Track

A recent article on the Benefitspro website from June 4th by Liz Davidson, cited three reasons employees are participating in their retirement plans but are not on target to meet their goals. We thought this article was pertinent regarding crucial plan design components, and also the perfect way to introduce RJ20’s updated services. These new services were developed all because clients have asked us to find a solution to their challenges. We pride ourselves on molding our business model to fit seamlessly into yours, so we hope this introduction serves as a useful update as well as relevant industry information to keep you current. As we strive at RJ20 to help position you to have proactive discussions with your clients before your competitors do, remember the saying “If you are not at the table, you are on the menu.” We hope you find this helpful and insightful and stand ready to discuss or demo these ideas for you.

Article’s Executive Summary:
The top three reasons employees are participating in their plans but not reaching their goals are:

  1. The company provides auto enrollment features, but at too low a deferral rate – Typical default rate is 3% when many pros suggest 10%.
  2. The company is informing employees about retirement benefits but is not educating them – Simply telling employees what’s available isn’t enough. You need to help them.
  3. The company is not getting to the root of the problem – Solely focusing on “retirement” doesn’t help employees with other financial challenges distracting them at the moment. Provide a solution to address the other issues and you can help employees focus again on retirement and take action.

How Do These Issues Segue Into RJ20’s New Offerings?
As RJ20 is an online Certified Financial Planning experience founded by CFPs, and not academics or software programmers with no real-world client experience, we have our fingers on the pulse for what really works in improving participant outcomes and overall plan success. It is clear that “tools”, “calculators”, or “software” are not the solutions by themselves as the market is littered with these and next to nobody uses them. Auto enroll features and QDIAs certainly help, but clearly are not getting the results everyone would like to see due to their singular focus on just the plan and not outside considerations.

What we believe this article does a great job of referencing is the holistic nature to solving participant problems where you can then solve their retirement goals. In essence, you need all the horsepower and goals-based perspective of a wealth-management experience, yet it needs to be scalable and affordable as face-to-face credentialed consultations cannot deliver. Enter the missing link to solving this problem once and for all. As our virtual advice provides all the planning both for retirement AND any other financial goal important to a participant, as well as provides servicing over the phone and email so the personal touch is not lost, we encountered a few clients where they needed help with a few other areas briefly highlighted below. Necessity is usually the mother of invention so with our new solutions, there clearly is no longer any excuses why participants cannot have their financial challenges addressed and document significant improvement in helping them meet their goals. We are excited to share these updates with you as this the perfect time to deliver these solutions to the market.

Updated New Services:

  1. “White-Glove” Servicing – RJ20 can now perform trades for participants wishing to make the changes our advice reports recommend. There was some concern from clients that “you can lead a horse to water…” and felt some participants may freeze when it comes time to actually make the changes. RJ20 stepped up to the plate to provide this service so participants can’t use this as an excuse to not take the action our advice suggests.
  2. Hard-copy Input Forms For Non-Internet Users – There were particular plans that came up where the majority of participants do not use the internet or feel comfortable getting advice and taking action on it. RJ20 developed an input form that is easy to complete where employees can send it in and RJ20 completes the report for the employee! Everyone can get a report regardless of technology challenges. RJ20 can also perform the trade for these employees if they wish as well. Advisors that like to meet with participants can also send RJ20 the participant data for us to generate the reports for them, so they can spend their time meeting with participants.
  3. Customize Rollout & Ongoing Communication – Employees won’t use a service if they don’t know it exists and what’s in it for them to use it. We will work with you in getting the word out and having an ongoing means to let employees know the service is there and all the work can be done for them. No more excuses!!!

Please give us a call and/or schedule a webinar for us to show you how you can have that “wow” factor with your clients before it’s too late. It is an honor for us to continue to forge meaningful, value-added relationships with you and we will continue to strive to offer leading-edge, robust, and extremely low cost solutions to create win-win solutions for you and your clients.

Thank you,


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To Roth Or Not To Roth Part 2

Posted on April 11, 2012. Filed under: For Individuals | Tags: , , , , , , , , , , , , , |

As mentioned in the previous blog we want to help people understand the difference between a Traditional 401k and the Roth 401k feature that is available in many plans today. Many of you might be saying sure go ahead and explain it but my 401k is not worth half of what it was, so it doesn’t really matter to me. I will argue that even though you may have half of your old account value, what is left and more importantly what will continue to be contributed is still very important. The choice between the two could mean a huge difference in your future income while in retirement. So instead of boring you with a ton of useless jargon we will get right to the point by listing out the main differences.


Traditional 401k

Money is contributed before you pay taxes

Earnings in your account are tax-deferred

Employer match is pre-tax

Mandatory withdrawals


Roth 401k

Money is contributed after you pay taxes

Earnings in your account are tax-free  (subject to age 59 ½ and 5yrs of account ownership)

Employer match is still made pre-tax but placed in a separate account for tax purposes

NO mandatory withdrawals


You may be asking yourself ok great, so now I know that I can put money in my account either before tax or after tax, so which one is right for me? This is a great question and one that we will address in the next blog. As for now we hope this helped a little and stay tuned for the next post in this series.

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You Can Lead A Horse To Water

Posted on April 10, 2012. Filed under: For Individuals | Tags: , , , , , , , , , , , , |

At RJ20 we pride ourselves in being a different kind of financial firm. Most if not all of our counterparts have the clear blue waters of the ocean or a spectacular mountain lake home on their website representing the wealth their clients have. Not us, we are working class guys & gals that know how hard it is to earn and keep a dollar. So, why the opening of this blog with a little jab at other financial companies, simple we are the financial how to video you are looking for on YouTube. What I am getting at is this, I recently read a blog about a gentleman that had a car problem and instead of taking it to a mechanic (aka a wealth management firm) he researched his problem on YouTube and found a video showing him how to fix it himself. Once he watched the video he knew exactly what he needed to do. He then went to the auto parts store and purchased the parts needed to fix the problem. I think it is fantastic that he was able to handle it himself and I firmly believe that more people need to take this approach with their 401k/investments. I equate RJ20 to the auto parts store in the above mentioned story. You have to have the correct parts to fix the job, but you can do it yourself and save a lot of money. So why not get the correct parts with the instructions included and fix the issue yourself? Seems simple to me, I mean you have to buy the parts anyway, right? That is where we (RJ20) come in, we can give you the parts, we can give you the how to video and in the end you can save a lot of money. There is one caveat, you have to want to watch the video and implement the fix yourself.

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