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Keeping your team productive while working from home

Keeping your team productive while working from home

Since many of us continue to work from home, ensuring that employees stay productive is a key concern for many business owners. No doubt, you’ve hired mature people who get their work done, and find that micromanaging them is not only unhelpful but counterproductive. Here are some other ways to ensure that they’re able to stay motivated during this time.

Provide them with the equipment they need

 

Now that everyone’s working from home, they need the technology to succeed. Your firm should have a paid web conference account so that everyone can use it to meet virtually, without time or number of participant limitations.

In addition, if you don’t already have project management software, you might consider investing in it. This allows the team to collaborate on tasks and provides online forums to interact with each other. It also removes the manual need to rely on spreadsheets to keep current on shared tasks. Some of the management apps also include chat or messenger capabilities, but if not, there are other solutions that provide them for the team as well.
When people are back in the office, these software apps can help employees to continue to work together as a team.

Promote the use of dedicated workspace

 

When employees work from home only occasionally, it may be fine for them to sit on the sofa with their laptop. But once they’re working from home for multiple days in a row, they need to have an ergonomic setup to avoid injury. This normally requires dedicated space to work in.
In addition, having a space that’s separate and just for work helps both the employee and their family to distinguish between work time and home time. Which helps them be more productive at work.

You might consider offering your employees a stipend to purchase necessary equipment, such as a computer desk and chair that can be adjusted to the correct height for ergonomics. The space may be temporary during coronavirus, but at this point in summer 2020, it certainly seems that working from home is going to continue for several more months.

 

Institute short daily check-ins

 

Because there’s no longer a space for people to catch up or talk to others about how they’re doing, a daily check-in is beneficial. (Agile project management teams use their “stand-ups” to great benefit during project sprints.)

The check-in helps employees stay connected to the team as well as manage their priorities. You might choose to have one-on-one check-ins with direct reports, or a small group check-in so that everyone knows what everyone else is doing.

Teamwork is a little harder when the team isn’t co-located with each other, so the more you can foster connection the better.

Encourage self-care and the establishment of regular “office hours”

Many workers, while they may enjoy certain aspects of working from home, may also become overwhelmed. Particularly those who have small children, since they’re unlikely to be able to find care at the moment.

Therefore, encourage them to take breaks. This helps employees come back refreshed. It also allows them to spend time with loved ones, which may help them feel less overwhelmed. Support exercise, nutrition and sleep as best you can without adding to the concerns that employees are already feeling.

Managers need to be more visibly available than usual to provide support and handle questions that come up in this new environment. Setting virtual office hours lets everyone know when they’re available for help, and they can also use the messaging apps so that employees know they’re ready to help.

 

Remind employees to dress for work

 

Having them sit down at a dedicated workspace in the clothes they would normally wear to the office helps maintain normalcy, so you should promote business casual even at home. People tend to be more productive in work clothes than when they wear sweats or PJs. Plus, they’re already dressed if a client or colleagues asks for a video call.

Team building that’s not about work

 

In the office, managers typically create some space for their employees to discuss hobbies, the news, and other topics. It helps everyone bond and also relieves some of the work-related stress that tends to build up. Just because your employees aren’t in the office at the moment doesn’t mean that you can ignore team-building and the strengthening of relationships.

You might consider leaving a few minutes open either before or after a video call to give everyone a chance to catch up. Or host a virtual happy hour occasionally after work or some other online team-building experience. It’s a great time to be creative and help employees feel like they’re part of a team that cares about them.

 

Tailor internal communications

 

You might be surprised to find that 62% of employee emails aren’t important. Do your part to reduce the amount of emails you send them. Segmenting your internal audience for a marketing or communication campaign, just as you normally do for external communications, can help reduce email overload.

Give workers the right information that they need, without too much bulk from irrelevant data. Understand what they like and what’s actually important for them to know. Make sure your messages are mobile-friendly so your employees can access them no matter what device they’re using.

 

Mutually set expectations

 

You and your workers are dealing with an unforeseen pandemic, which means that both employee and employer are venturing into unknown territory. Setting expectations accordingly will help you both feel more comfortable while they’re working from home. This helps avoid stress and disagreements, which will make an already overwhelming situation worse.

Decide what is acceptable and what is unacceptable on both your parts. For example, the employee is expected to attend the daily huddle at a specific time in the morning.
In turn, you will not spring an unannounced video call on your employees. They’ll have the time as they may need to make child-care arrangements or resolve some other issue before turning on the video chat.

You may want to institute time-tracking and communication policies as well. Having these determined ahead of time will help everyone work together more smoothly.

 

Is the work-from-home setup making you concerned about your finances? Feel free to give us a call at 619.255.9554 or send us an email. We’d love to hear from you.

Are you on track for retirement?

Making sure you will be ready for retirement can be overwhelming. Funding your retirement accounts over the years is just one part of your journey to the retirement of your dreams. A Certified Financial PlannerTM can help you navigate the complexities of financial planning. Talk to a Financial Planner>

Dream. Plan. Do.

Platt Wealth Management offers financial plans to answer your important financial questions. Where are you? Where do you want to be? How can you get there? Our four-step financial planning process is designed to be a road map to get you where you want to go while providing flexibility to adapt to changes along the route. We offer stand alone plans or full wealth management plans that include our investment management services. Give us a call today to set up a complimentary review. 619-255-9554.

The Secrets of 401(k)s

The Secrets of 401(k)s

 

The 401K, a widely used retirement vehicle offered by employers, is well known. But there are a few facts that you might not already be aware of.

History and a brief overview of 401(k) plans

Now the prime retirement account vehicle for full-time employed workers whose companies offer the benefit, the 401(k) was not originally designed to be the retirement account for the masses.

It was created as a way for executives and others to avoid taxes on their deferred compensation. Later, a benefits consultant wanted to find a way for employees to save while receiving an employer match, and in 1981 the IRS allowed employers to fund these accounts through payroll deductions. That kicked off the account’s popularity.

A 401K eligible employee can set aside up to $19,500 in 2020 into the plan. If over 50, they can also add a “catch-up” up to $6,500. Some firms provide a matching contribution up to a certain percentage or dollar amount, free money to the employee, and tax-deductible to the employer.

The match is always pre-tax, but if the option exists in the plan, the employee can choose whether their contribution is pre-tax, known as Traditional, or after-tax as a Roth. Typically, the plan sponsor (usually an investment services company) provides a menu of conservative to aggressive options so each employee can invest according to their particular strategy.

Because they are employer plans, 401(k)s are strictly regulated. A third-party administrator or TPA usually oversees the plans, so the employer has no influence over an employee’s account and can’t monitor it. Requests for withdrawals and rollovers are generally sent to the TPA to take care of. 

 

401(k) Overall defined contribution plan limit

Many people tend to think of the $19,500 (or $26,000 for those 50 or older) to be the limit. You can add to that the employer’s matching contribution for the total investment for the year.

Investors can also set aside $6,000 in an IRA, plus $1,000 catch-up for the 50+ crowd. (This money may or may not be tax-deductible, depending on the investor’s income, but it can tax-deferred even if you can’t take a deduction for it.)

That’s $25,600 or $33,000 to be set aside tax-deferred, depending on your age. But is that the maximum allowable? Not necessarily.

As they used to say on the informercials: But wait, there’s more!

The IRS caps the total amount of defined contribution plan limits at $57,000. The missing component, after the employee’s 401(k) contribution and the employer’s match, if any, is an after-tax contribution to the plan. Not all plans allow for this, but some do. This is the limit for solo 401(k)s and SEP IRAs as well.

Imagine that you’ve contributed $19,500 to your plan. Your employer match has kicked in $6,000, bringing the total to $25,500. For the $57,000 plan limit, the catch-up contributions don’t count.

Therefore, you can add to that $31,500 after-tax to reach the upper limit of $57,000. Why would you add in additional funds that are not tax-deductible? You may not get the current year tax deduction, but it will grow tax-deferred until it’s time to take the money out.

 

401(k) fees and retirement withdrawals

It’s essential to consider the fees in your plan and the options. If your plan sponsor is an insurance company, you may be paying an additional “separate account” charge that may go by the name Variable Account Charge or Mortality & Expense (M&E).

Plan sponsors, whether insurance companies or not, may charge the employer additional fees as well, which may or may not be passed down to you. They may offer other services such as “advice” for an additional cost, but you can most likely find similar advice more cheaply by asking your financial advisor.

When choosing your funds, look at the expense ratios and the share class (if you’re investing in mutual funds.) Those with high expense ratios and share classes that are not labeled “institutional” or “load-waived” aren’t good for your bottom line.

Also, read your plan documents to see what kinds of withdrawals are allowed once you’ve reached age 59 ½ and can withdraw without penalty. Some plans don’t allow you to withdraw monthly, and may restrict you to annual or quarterly withdrawals.

 

Are you on track for retirement?

Making sure you will be ready for retirement can be overwhelming. Funding your retirement accounts over the years is just one part of your journey to the retirement of your dreams. A Certified Financial PlannerTM can help you navigate the complexities of financial planning. Talk to a Financial Planner>

401(k) Rollovers

In some of our previous articles, we’ve mentioned that you should consolidate your like-kind retirement accounts, i.e. Traditional with Traditional and Roth with Roth, rather than having a number of accounts from previous employers sitting in old 401(k)s.

Some 401(k) plans allow for rollovers into the plan itself. This might not be a bad idea if you’ve investigated the plan in detail and know that the fees are low. And that you can withdraw funds whenever you want after you’ve reached 59 1/2.

Another option is to roll all your 401(k) plans into an IRA once you leave the companies that sponsor them. Typically IRAs have lower fees, fewer restrictions, and a bigger menu of investment options than employer 401(k)s.

Either way, you’ll probably have some paperwork to fill out. The best way to roll funds into or out of a plan is to perform a direct rollover, where the funds go directly from one service provider to another. Many can do this transfer electronically, which is safer than having checks mailed out. Sometimes, the check will be mailed to your address but made out to the new financial company, FBO (for the benefit of) your name.

In an indirect rollover, the funds come to you instead. You have 60 days to deposit all the money back into a retirement account. If you don’t, it will be considered a withdrawal, and you’ll owe taxes and perhaps a penalty if you’re under 59 ½. If you only invest a portion of the money back in, the remainder is also considered a withdrawal and taxed and potentially penalized.

 

Stay in the game

You likely already know that staying invested is the name of the game, so we can’t call this one a secret.

However, it can be difficult when the market is volatile. And even when the market is relatively calm!

The key to staying invested is to have a diversified portfolio with enough aggressive funds (stocks) to reap the gains when the market is rising. And enough conservative or noncorrelated money (bonds) so that you can sleep at night when the market is dropping.
Since no one has a crystal ball, it’s important to diversify at an investment level: international and US, small, large and medium-sized companies, government and corporate bonds.

Do you need some assistance with your 401(k)? Or are you thinking about opening one up for your own business, whether you’re self-employed or have some staff? Give us a call at 619.255.9554 or email us to set up an appointment.

Dream. Plan. Do.

Platt Wealth Management offers financial plans to answer your important financial questions. Where are you? Where do you want to be? How can you get there? Our four-step financial planning process is designed to be a road map to get you where you want to go while providing flexibility to adapt to changes along the route. We offer stand alone plans or full wealth management plans that include our investment management services. Give us a call today to set up a complimentary review. 619-255-9554.

Is Your Estate Planning Up-to-Date?

Is Your Estate Planning Up-to-Date?

It’s no secret that many Americans put off creating a will — even those who need it most. But one milestone event often triggers a shift in mindset: the arrival of a child or grandchild. Usually, it hits people right before they get on a plane for the first time following the child’s birth: “If the plane crashes, what happens to our children, and how do we make sure they’re taken care of after we’re gone?”

If you have not put your estate plan into place, the answer to that question is that state law dictates who gets your assets, and a court decides who will act as guardian of your minor children. Picture in-laws fighting over custody of your children, assets being misappropriated and mismanaged, and a spendthrift child 18 years in the future, riding off into the sunset in a shiny, new Lamborghini.

A thoughtful and well-constructed estate plan can make all of these worries obsolete. If you put an estate plan in place years ago, it may be time to revisit the documents and revise where needed. If your estate plan was created before the significant tax law changes of 2018, it should be reviewed by an attorney. Here are four essential questions you should be able to answer about your estate plan.

Are estate-planning documents in place and up to date?

For most people, “basic” estate-planning documents include the following:

Will, Revocable Living Trust, Financial Power of Attorney, Health care directives and a living will.

 

Will

This primary estate-planning document dictates how a your property will be distributed at death. A will also names the individual in charge of managing the property’s distribution — the executor — and includes a nomination of a guardian for any minor children.

 

Revocable living trust

In many cases, it’s important to have a revocable living trust in addition to a will. For example, in states where probate is unusually expensive or burdensome, a properly funded living trust avoids the expense and delay of a probate proceeding. The living trust becomes the primary estate-planning document, dictating how an individual or couple’s property is distributed upon death and who manages the process (in this case, a trustee).

 

Financial power of attorney

In a financial power of attorney, an individual names an agent to act on her behalf with respect to her financial matters. The powers granted under a financial power of attorney range from very narrow (i.e., granting the agent power to act on behalf of the individual with respect to a specific transaction) to very broad (i.e., giving the agent the authority to take virtually any action with respect to the individual’s financial matters).

 

Health care directive and living will

In this document, which has many different names and comes in many different forms, the individual appoints an agent to make health care decisions if she is unable to do so and makes known her end-of-life wishes.

Who should be trustee? Executor? Guardian? Do your clients understand the roles and the differences between them?

 

These terms can be confusing, but here’s a simple distinction: the trustee/executor is in charge of the “stuff,” and the guardian is in charge of the children. There will be many intersections of the two roles, but each requires a different skillset, meaning different individuals may be needed:

Gaurdian

Charged with raising the children if you are unable to do so, caring for the children daily.

 

Trustee/executor

In charge of overseeing the gathering of your assets, the payment of taxes and any other final expenses, and then the distribution of the assets to the clients’ beneficiaries. If your estate-planning documents provide for continuing trusts for the children, the trustee will handle the ongoing management and investment of the assets.They will also oversee the distribution of the assets to the children and their guardians.

Some common questions you may have about the two roles are:

Should the trustee/executor and guardian be the same person?

 

It depends on the client’s situation. The roles require two very different skill sets, but if you have a go-to person you trust to serve in both roles, it may make sense to name the same person. The checks and balances and diversity of perspectives afforded by two different individuals serving in the roles can be beneficial. If you decide to name two different individuals, they’ll need to work together.

Should the trustee/executor and guardian be a family member?

 

Again, this depends on your situation and relationships. Some things you should keep in mind are the age of the individual you’re considering, as well as where the individual lives (i.e., does the individual live in the same city where the clients are raising their children, or across the country), the individual’s own family composition (i.e., is the individual married, does the individual have his or her own children) and the individual’s personal financial situation.

Is the guardian appointed in the will guaranteed to be the children’s guardian?

 

No, it is merely a suggestion. The supervising court must officially appoint the guardian but is usually deferential to the parents’ wishes, unless there are extenuating circumstances.

In any case, whether trustee, executor or guardian, it is important to get permission from the person being appointed prior to naming them in the plan.

What if my children can’t handle money?

If the children are minors, an outright disposition of your assets is not appropriate. This means that after your death, continuing trusts will likely be put in place for the children’s benefit, and you need to decide what these trusts will look like. Although estate-planning attorneys will likely have helpful recommendations on how to structure the ongoing trusts for children, some factors you must consider include:

  • The standard of distribution (How does the trustee determine if a distribution is appropriate?)
  • The term of the trusts (Are there mandatory distributions at certain ages, or do the trusts continue for the children’s lifetimes?)
  • The identity of the trustee

 

Do you have sufficient life insurance?

If the children are minors, an outright disposition of your assets is not appropriate. This means that after your death, continuing trusts will likely be put in place for the children’s benefit, and you need to decide what these trusts will look like. Although estate-planning attorneys will likely have helpful recommendations on how to structure the ongoing trusts for children, some factors you must consider include:

Because of the high cost of raising children today, new parents need to consider purchasing life insurance. There are two basic types:

  • Term insurance – provides coverage for a term of years and pays out a death benefit if the insured dies during the term.

  • Permanent insurance – includes an investment component and is usually structured to pay a death benefit no matter when the insured dies.

One of the primary benefits of insurance is that beneficiaries receive the proceeds free of income tax. Further, if you have substantial net worth and purchase an insurance policy with a significant death benefit, it may make sense to hold the policy in an irrevocable life insurance trust. If structured properly, an irrevocable life insurance trust ensures that any insurance proceeds received by the trust are sheltered from the estate tax.

If you are young and healthy, term insurance is a relatively cheap and effective way to provide an income-tax-free pool of money to provide for surviving children in the case of your premature death.

 

Start the conversation

A new child or grandchild is a beautiful joy. The new addition to the family usually means an adjustment to estate planning. By working through the four questions above, you’ll take an important step in thinking about your estate plan — and you may rest easier knowing everything is in place.

Are you on track for retirement?

Making sure you will be ready for retirement can be overwhelming. Funding your retirement accounts over the years is just one part of your journey to the retirement of your dreams. A Certified Financial PlannerTM can help you navigate the complexities of financial planning. Talk to a Financial Planner>

Dream. Plan. Do.

Platt Wealth Management offers financial plans to answer your important financial questions. Where are you? Where do you want to be? How can you get there? Our four-step financial planning process is designed to be a road map to get you where you want to go while providing flexibility to adapt to changes along the route. We offer stand alone plans or full wealth management plans that include our investment management services. Give us a call today to set up a complimentary review. 619-255-9554.

Why it’s Smart to Start a 529 Education Savings Plan

Why it’s Smart to Start a 529 Education Savings Plan

Saving for your child’s future education costs can be one of the most important decisions for parents. The price of tuition alone is staggering, with new increases each year. Imagine being a new parent and what education costs will be in eighteen years when your child would potentially be in their first semester of higher education. The good news is that there are different options you can implement with strategic financial planning

How retirement planning with a financial advisor can help

Over the past twenty years, tuition costs have doubled, taking into account fees, room, and board. Average costs for educational institutions for 2020 are as follows:

• Private School (nonprofit): $49,879
• Public 4-year institution: $21,950
• Out of State: $38,330

Saving for education can be just as important as saving for retirement. There are many options to help you save for your child’s education and prepare for rising costs. There are qualified tax-advantaged plans geared toward each financial situation, and not all options will be appropriate. A good financial planner can help you sort through the choices and select the strategy that is right for your family.

 

The 529 prepaid tuition plan

One of the many qualified state tuition plans is the 529 savings plan. There are two kinds of 529 plans, a prepaid tuition plan, and an education savings plan. Both plans would be considered an asset of the parent, which means you have full control of your child’s education savings.

The most significant advantage of prepaid tuition plans is the ability to permanently “lock” tuition at current rates by purchasing college credits. To do this, you must buy the college credits from a state school. So if you are in California, your child could only attend a California State University (CSU) and not a University of California (UC). The funds in the account will appreciate based on the inflation of tuition costs.

If the account holder wishes to close the account, he/she receives only the principal amount they originally paid. The prepaid tuition plan only covers future tuition costs and does not include other associated education costs.

Some disadvantages include:

  • Credits appreciate by the rate of inflation. One potential downside to prepaid tuition is anticipating the students’ needs in college.
  • The student could receive a scholarship to the university negating the prepaid tuition, which would then be returned interest-free to the account holder.
  • The university may also not have the student’s field of study. The prepaid tuition can only be applied on a per university basis, forcing your child to choose a different major.

The 529 education savings plan

The most common 529 savings plan is the education savings plan. The earnings of this plan grow tax-free so long as you apply the funds for qualifying education expenses (e.g. tuition, books, supplies, room, and board). For the earnings to be tax-free, the student must also be enrolled at least half-time. If these requirements are not met, there is a 10% penalty on the earnings.

 

Anyone can contribute to the plan, regardless of income. Individuals can contribute up to $75,000 a year, and couples who elect gift splitting can contribute up to $150,000. There are no tax consequences associated with these contributions. The plan also allows for annual distributions up to $10,000 to pay for enrollment in elementary or secondary schooling.

 

In 2019, the SECURE Act allowed for a lifetime aggregate distribution of up to $10,000 to pay for student loans. The SECURE Act also allows for annual qualified distributions for apprenticeships registered and certified with Secretary Labor National Apprenticeship Act also up to $10,000.

 

 

Education Planning with Platt Wealth Management

It can feel intimidating, almost impossible, to plan for all of the moving parts within a comprehensive financial plan. Don’t worry — we can help! 

If you are searching for a certified financial planner that you can trust to help plan the next stage in your life, please give us a call. At Platt Wealth Management, our financial advisors put your needs first and provide completely transparent services to best prepare you for all financial milestones. 

Are you ready to take control of your retirement plans? Give us a call at (619) 255-9554 to set up a complimentary review or email us here

 

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