RETIREMENT PLAN PERSPECTIVES

Tackling the Trend - Dealing with Inflation's Negative Effect on Employee Retirement Planning

An August 2022 survey from Nationwide Retirement Institute found that 40 percent of workers ages 45 and older plan to delay their retirement due to inflation and rising living costs.

Reaching Retirement Readiness

Being able to replace working income with income generated from retirement savings is the essential definition of retirement readiness. The percentage of working income that an individual may need in retirement will vary, depending on several factors, such as whether they will still have a mortgage, the amount of their social security benefit, their tax bracket, variable health care costs, lifestyle choices, and income from part-time work, among others.

Plan Sponsors Ask...

Q: Our company is growing rapidly—and so is our retirement plan. We are interested in hiring a plan advisor. When it comes to providing fiduciary support, what can we expect?

A: From a plan sponsor perspective, the act of hiring a fiduciary advisor is a fiduciary act, and one the sponsor should conduct thoughtfully. Although fiduciary services vary by advisor firm, here are the types that plans commonly use:

Quarterly Plan Sponsor Calendar

April:

If a plan audit is required in connection with Form 5500, make arrangements with an independent accountant/auditor for the audit to be completed before the Form 5500 due date (calendar-year plans).

REGULATORY UPDATES

DOL Finalizes Guidance on ESG Investing in Retirement Plans

The Department of Labor (DOL) has finalized regulations meant to show retirement plan sponsors and their investment advisors how to meet ERISA fiduciary standards of loyalty and prudence when selecting plan investments.

DOL Proposes Fiduciary Self-Correction Option for Late Deposits

The DOL has proposed updates to its Voluntary Fiduciary Correction Program (VFCP), which hasn’t been updated since 2006.

Review 2022 Nondiscrimination Testing Results ASAP

Even though the 2022 plan year is over (for calendar-based plans), plan sponsors can’t close the door on 2022 just yet. Year-end nondiscrimination testing must be conducted and any failures corrected before plan sponsors can turn their full attention to 2023.

Cost-of-Living Adjustments (COLAs) for 2023

Each year, the IRS adjusts retirement plan contribution limits and other plan-related thresholds for changes in the cost-of-living index. The current high rate of inflation has triggered updates to all limits for the 2023 plan year.

CONTACT OUR TEAM

Barbara Appleby, JD, MA, AIF^®

barbara@daybreakfinancial.com

(207) 819-0311

Kristin Guibord, MBA, AIF^®

kristin@daybreakfinancial.com

(207) 819-0312

Our Services | Contact Us | Privacy Policy

Securities and advisory services offered through Commonwealth Financial Network®, member FINRA/SIPC, a Registered Investment Adviser. Financial Planning services offered through Daybreak Financial Partners, a Maine-Licensed Investment Adviser, are separate and unrelated to Commonwealth. Fixed insurance products and services are separate from and not offered through Commonwealth Financial Network.

﻿RETIREMENT PLAN PERSPECTIVES