Do your employees understand their 401(k)?

Good employers are always striving to do the right things for their employees, and providing them with a retirement plan is a prime example of this. In addition to offering employer-provided benefits, like a 401(k) plan, it’s crucial that the company takes the time to educate their employees on these benefits.

There are a number of ways companies can educate employees on their 401(k) plan. Some ways include:

Inform new employees: provide information in employee handbooks or utilize payroll stuffers, flyers or posters around the office so new employees are aware the plan exists.

  • Explain the enrollment process: schedule enrollment meetings or provide enrollment books so employees can understand how to get started and how to choose the appropriate investments.
  • Discuss regularly: conduct annual or continuing education meetings that can be used to keep participants informed on how and why to save and invest.
  • Provide resources: share the 401(k) website with employees, which has many tools for investment planning and forecasting. Resources like this help employees understand when they can afford to retire. Share these tools through meetings, handouts or email.

Nachman Norwood & Parrott understands the importance of education in retirement planning. Read what criteria companies must meet when offering a 401(k) plan and more information on how companies can educate their employees by downloading NNP’s second quarter newsletter on the Nachman Norwood & Parrott website.

Warm regards,

Nachman Norwood & Parrott

Wealth Management Consultancy

Investment products and services are offered through Wells Fargo Advisors Financial Network, LLC (WFAFN), Member SIPC, a registered broker-dealer and a separate non-bank affiliate of Wells Fargo & Company. Nachman Norwood & Parrott Wealth Management Consultancy is a separate entity from WFAFN.

Nachman Norwood & Parrott and Wells Fargo Advisors Financial Network are not tax or legal advisors.

Tax Deadlines

Tax season is upon us! Please remember that the team at Nachman Norwood & Parrott is here to help you. With your approval, we are happy to coordinate with your CPA to not only ensure timely delivery of your NNP tax information but to also collaborate on tax-saving strategies. We are ready to assist with any questions that may arise. Please let us know how we can help you!

Tax Deadline is April 18, 2017. You still have until that date to make a 2016 contribution to the following accounts: Traditional IRA, Roth IRA, Health Savings Account (HSA), and SC Future Scholar 529. Call us if you would like to discuss any last minute contributions; we are here to help.

Investment products and services are offered through Wells Fargo Advisors Financial Network, LLC (WFAFN), Member SIPC, a registered broker-dealer and a separate non-bank affiliate of Wells Fargo & Company. Nachman Norwood & Parrott Wealth Management Consultancy is a separate entity from WFAFN.

Nachman Norwood & Parrott and Wells Fargo Advisors Financial Network are not tax or legal advisors.

OTHER NEWS: Tax Deadlines!

Tax deadlines will be here soon!

Springtime means tax time is fast approaching! It pays to take advantage of these tax saving strategies when appropriate and to be aware of the following key dates and deadlines:

Tuesday, March 15, 2016

  • Deadline to establish and fund SEP plans for corporations for 2015. This can be a great way to potentially reduce 2015 income.*
  • Deadline to fund employer contributions for corporate retirement plans.*

Friday, April 1, 2016

  • Deadline to take the 2015 required minimum distribution (RMD) from Traditional IRAs if you reached the age of 70.5 in 2015.

Monday, April 18, 2016

  • Deadline to make 2015 contributions to your Traditional IRA, Roth IRA, Health Savings Account (HSA) or Education Savings Account (ESA). For high-income earners, many of these may help reduce your 2015 tax burden.
  • Deadline to make your 2015 SC Future Scholar 529 contribution. This can provide a state tax deduction for last year.
  • Deadline to establish and fund SEP plans for sole proprietorships and partnerships for 2015.* This is another opportunity to create a tax deduction for 2015.

Beyond meeting these deadlines, it is a good time to revisit the contribution limits to any 401k plans. The 2016 employee deferral limit is $18,000 with an additional catch-up contribution of $6,000 if you are age 50 or over. The catch-up contribution can begin the year in which you turn 50; no need to wait until the actual birthdate.

The team at Nachman Norwood & Parrott is ready to help with any questions. Give us a call at 864-467-9800.

Warm regards,

Nachman Norwood & Parrott
Wealth Management Consultancy

*Or at the end of a filing extension

OTHER NEWS: Market Update

As you are no doubt aware, equity markets around the globe are experiencing a very rough start to 2016. In fact, what was the worst (or one of the worst) first weeks in history has continued into the second. In retrospect, it has been a poor 12-18 months.

Even though the team at Nachman Norwood & Parrott has been in the wealth management business, on average, for 20-30 years, we are still unable to predict exact outcomes of financial markets. While we, and others, can spend numerous pages of ink trying to explain the “why” as well as our best opinion on the outcome, the truth is that no one knows for sure. Rather, we prefer to use common sense and tell you what we do know.

Regardless of all the “noise” in the market and the world (China, the price of oil, terrorism, and the presidential election), the simple fact is markets and stocks are ultimately based on earnings and valuation. As you have heard us say several times during the last one to two years, most equity markets have not been cheap but may be fairly to slightly overpriced. The S&P 500 had a tremendous, virtually uninterrupted, upward move from its low in March of 2009. Markets do not go straight up but generally take breaks along the way. In the same regard, economies do not grow without breaks along the way. Both the US market and the US economy will ultimately take a pause. We may be seeing it in the market right now, but no one is certain. Historically, these pauses are not reason for panic and are generally mild and short-lived. They are sometimes worse as was the case in 2008. At present, we do not see why the current downturn would be a deep one. Interest rates are low, inflation is low, the economy is growing, unemployment is low, and corporate balance sheets are much stronger than pre-2008.

As for what we do know, we believe that variable markets go up and down and potentially will end higher. We believe that the day-to-day practice of common sense financial decision making will be rewarded. We believe that those with reasonable time horizons will prosper over time. We believe that proper diversification will work. We believe that the best way to make money in equities is to stay invested. And lastly, we believe that having a proper plan, developed according to your specific goals, helps ease the way.

Please call any of us if you would like to talk.

Warm regards,

Nachman Norwood & Parrott
Wealth Management Consultancy

Stocks offer long-term growth potential, but may fluctuate more and provide less current income than other investments. An investment in the stock market should be made with an understanding of the risks associated with common stocks, including market fluctuations.

Investing in foreign securities presents certain risks not associated with domestic investments, such as currency fluctuation, political and economic instability, and different accounting standards. This may result in greater share price volatility.

The views expressed by the author are his own and do not necessarily reflect the opinion of Wells Fargo Advisors Financial Network or its affiliates.

Diversification does not guarantee profit or protect against loss in declining markets.