SAC Investments

Financial Services Ft. Lauderdale Florida

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Sam Curmaci, President of Investments

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What to Do with Your ESOP: Options Available for Employees

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What to do with your Publix ESOP

If you’ve worked for a long time, you already know about how great the benefits are in this grocery company. Around since 1930, it has become the largest employee-owned grocery chain in America. You’re perhaps one employee who’s worked with them for years and realized how unusually generous their benefits continue being.

One of those is their employee stock ownership plan (ESOP) that’s one of the best available in the country. It’s an investment feature many who’ve worked there prefer because it gives them continual income into their retirement years without having to rely on less dependable financial sources.

If you’ve decided to take this investment benefit, maybe you’re still wondering what to do with your ESOP as you head toward retirement. Your options can vary, though it requires some smart strategy depending on what your age is.

Some prefer to retire early, and others wait until they’re older. In either case, here’s some tips to look at since many myths have developed about your ESOP. It’s time to see what works best for your own financial situation.

Can You Leave Your ESOP  Forever?

We’ve seen some misconceptions develop about how long you can keep your ESOP there. You’ve perhaps heard some tell you it’s possible to leave your ESOP there for life.

This isn’t true, though you can keep it in there for a while if you’ve decided to retire before the age of 62. By March of the year after you turn 62,  you are required to take full distribution of your ESOP.  Packets are sent out in February.

The company sends you the distribution paperwork when the time comes, though this doesn’t end the story on what’s possible with yourESOP. If you’re slightly younger, you have other options available to give you some supplemental income before being required to cash out.

Using the “Diversification Election”

For those just turning 55, you’re at a perfect age to enjoy some additional ESOP benefits from your employer. If you’ve worked at least a decade at the company, you can start to take distributions while still working there. They call this “Diversification Election”, and it increases your income substantially while still being employed.

The downside to this is you get a 10% penalty, plus taxation on your distributions as income. One way to prevent penalties is to roll your ESOP into an IRA within 60 days.

Yet another method is available to avoid tax penalties, but it again depends on what your age is at the time.

Using the Substantially Equal Periodic Payment Arrangement

Otherwise known as SEPP, the Substantially Equal Periodic Arrangement is a system helping you take distributions without a 10% penalty. Still, it’s only applicable to those under 59 1/2 years of age. It’s also known as a 72(t) arrangement in IRS parlance, and it’s worth looking into to help yourself bring more income into your household without subtractions.

How Much of Your ESOP Can You Take Out After Retirement?

You can’t expect to dip into your ESOP after retirement and leave the rest in place. You are required to take the whole thing out if you need some or all of it for a particular financial emergency.

At the time of this distribution, you can take it all as cash or as a stock certificate. Once you take this action, however, you can’t reverse it. Taxes may apply as well, depending on how you use your distribution.

What makes your employer extra good with their ESOP‘s is they don’t force you to sell your stock back to them. They let you benefit, including passing it on to your heirs if you want.

Contact us at S.A.C. Investments to learn more about what you can do with an ESOP and ways you can roll it over to other sources of retirement income.

Join our Grocery Employee Pre-Retirees Group on FB.

The group answers all of your retirement questions.  Feel free to join and or share with co-workers.  https://www.facebook.com/groups/GroceryEmployeePreRetirees/

Sam Curmaci

What Retirement Options are Available for Royal Caribbean Cruises’ Employees?

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What to do with your Royal Caribbean Cruises Retirement
As a Royal Caribbean Cruises employee, you should know what to do with your retirement when you’re ready.

Setting sail with Royal Caribbean Cruises as a career employee has many benefits. Likely, retirement isn’t the main benefit that initially attracts employees, but eventually after some time sailing the seas retirement begins to become an important subject. This can lead to the important question: what retirement options are available for Royal Caribbean Cruises’ employees?

Great Benefits Include Diversified Retirement Plans

The good news for those who were more interested in the health care, time off, and discounted cruise benefits – Royal Caribbean Cruises also offers great diversified retirement plans for their employees.

Specifically these come in the form of: non-contributory pension plans, 401(k) plans, and an employee stock purchase plan.

While every employee during onboarding was briefed on these benefits, the degree of each employee’s involvement over the years of working will vary considerably. Either way, you’re now interested in paying more attention to these funded retirement plans and considering your options after retirement.

Explaining Royal Caribbean Cruises’ Retirement Plans

Whether your going to become Royal Caribbean Cruises’ permanent customer, have found a paradise island in the Caribbean Sea to retire to, or have decided Alaska is would be a wonderful contrast, the good news is: you can take full advantage of your hard-earned retirement funds with the right management. Let’s first explain the plans offered with Royal Caribbean Cruises.

The non-contributory pension planned offered from Royal Caribbean Cruises is basically a traditional pension where the employer is paying a certain amount into a qualified retirement plan without the contribution of the employee.

This also means this amount is not taxable until the pension is withdrawn after retirement. An employer will have a certain amount of time required for employees to work for them in order to receive this retirement benefit, which is called vesting.

This pension will accumulate through the years and upon retirement at age 59 ½ will be incrementally paid to the vested employee. Recipients will be required to pay income taxes on the amount they receive yearly. The amount received depends on the amount of years, salary, and other specifics determined by the employer, but a set amount will be distributed monthly while in retirement.

While the non-contributory pension plan is non-voluntary, the 401(k) retirement plan is voluntary. A certain amount will be taken from each check and placed in a 401(k), as well as any extra amount an employee wants to contribute. This 401(k) retirement account will be invested in a portfolio of mutual funds generally, so the return depends upon the financial managers’ decisions.

An employee stock purchase plan is a voluntary retirement benefit plan where the employer takes a portion of employees checks and buys their company’s stock at a discount. The time frame and performance of the stock will determine the return on investment at retirement.

What Options Do I Have With These Plans?

While these plans mature and start to become larger, the question then becomes: what’s the best way to manage these without paying heavy taxes? At least this should be the question as taxes have been deferred up until this point, but upon withdraw they’ll be required.

The objective then becomes to manage these hard-earned retirement investments in the best way to avoid heavy taxes and gain a return on what remains.

The financial principle: “it takes money to make money” is true, yet also true is: “the more you make they more they take”. The good news is there are solid options of how to manage your retirement, so you can minimize taxes and increase profits.

The key tool here is what’s called a roll over, which is a legal financial transaction from one qualified retirement plan to another. This rollover (if done in a timely and correct manner) allows investors to bypass taxes and reinvest in more profitable retirement plans. Although the retirement plans Royal Caribbean Cruises gives employees are good, a savvy investor may want more control over the funds they’ve accumulated.

Retirement Specialist

At this point finding a qualified, experienced, and expert financial advisor to help you understand your specific investment options is key. They can help you explore the options best suited for your financial plans and then facilitate and manage the process.

S.A.C. Investments is the retirement specialist that can help you understand your investment options in: ETF’s, Mutual Funds, Bonds, Annuities, and can help facilitate any roll overs. Working with a smaller financial firm gives you top-talent and the personal attention needed to make tough financial decisions with your hard-earned retirement.

Our experience and expertise in the financial industry, specifically around retirement, can work on your behalf. Our goal is to manage your investments and monitor the risks so you can enjoy retirement. We do this with integrity and unbiased professional advice provided through a client-friend relationship.

Summary

Royal Caribbean Cruises’ employees have great retirement plan benefits, so understanding the options available to capitalize on these hard-earned funds is vital. Having a trusted financial advisor on your side to help you understand these options and then professionally manage the details takes the complexity out of the process.

The financial investment world is a complex area to navigate and large amounts of money can be lost with simple mistakes. S.A.C. Investments is here to help Royal Caribbean Cruises’ employees take full advantage of their retirement plans.

If wise choices are made, these retirement funds can increase while taxes are minimized, ensuring you a healthy financial life during retirement. If interested in learning more please contact us today for a free 30-minute consultation.

Sam Curmaci

 

What Should You Do With Your Office Depot Retirement?

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What to do with your Office Depot Retirement
After years of growing a 401(k) while working for Office Depot, you need to start thinking about what you will do with those funds once you retire.

 

After years of growing a 401(k) while working for Office Depot and now nearing retirement, what exactly are your options? Office Depot offers a 401(k) retirement plan from Fidelity Investments, but do you have to keep your 401(k) earnings there? Basically, the question is: what should you do with your Office Depot retirement?

Retirement With a 401(k)

The minimum age of retirement recognized by a 401(k) plan is 59 ½ years old, which may or may not be your age. Either way, starting to receive funds from a 401(k) has to wait until this age. There are many restrictions around withdrawing from this retirement savings account, which are designed to penalize early withdraws.

When reaching that retirement age, a set amount will be distributed each month from your 401(k), determined by life expectancy and other factors around each individual circumstance. This amount distributed will be taxable as income tax, according to the tax bracket itwas made in. So, although a 401(k) is tax deferred at first, later on the recipient does have to pay some taxes on it.

Options When Retiring

Reaching the age of retiring is a joyous occasion, which shouldn’t be hampered by bad surprises when it comes to restrictions and limitations around your retirement savings. Likely, you’ve been monitoring the amounts and even contributing extra into your 401(k), and now you want to ensure you benefit from the years of investing and hard work.

Using your money to make money is a great idea, and can be sort of a part-time job during retirement. If used correctly, investments could grow and taxes could be minimized. For the retiree who wants more flexibility and options in dealing with his retirement savings, a directroll-over of their 401(k) into another retirement plan may be the right option.

Here are some retirement investment opportunities to consider:

    • ETF’s
    • Mutual Funds
    • Bonds
    • Annuities

Rolling over a 401(k) directly into another qualified retirement plan, can be done without penalty or tax liability. The purpose of this is to give you more flexibility and options concerning withdraw and investment opportunities.

Benefits of Using a Smaller Retirement Specialist Firm

Working with a smaller retirement specialist financial advisor, can give you the personal attention needed to maximize your retirement account benefits. Larger firms are less capable of working individually with each client, the way a smaller firm like S.A.C. Investments can. The best part is: you’ll get even better expertise and advice, because you’ll have access to their top advisors.

There are many tips and tricks to the investment world, which an experienced financial advisor can help you navigate. Taking chances with the hard-earned money you’ve accumulated for decades, should be avoided. Working with a smaller firm, means you’ll get the attention and advice needed to avoid heavy penalties, risky investment practices, and heavy tax liability.

S.A.C. Investments

We’re retirement specialist, which means we understand how to properly manage 401(k) roll overs into qualified retirement plans, which give more investment options and flexibility. Every client’s needs and circumstances are different, and we take the time needed to gain a clear understanding of these unique variables.

Asset allocation and risk vs. reward are both part of our investment strategies, which result in secure investing while gaining the highest rewards. Our goal is to choose your investments based on your needs and objectives, rather than some cookie-cutter formula. And it is our ultimate goal to provide a level of service that inspires confidence and trust, while bringing absolute clarity to each client’s goals and investment objectives.

After decades of working for Office Depot and investing into your 401(k), gaining a clear understanding of future investment options is a wise choice. By talking to S.A.C. Investments with a free consultation, your savings could be more accessible and earn more every year. Please contact us today to learn more, and we’ll be glad to help.

Sam Curmaci

 

Smart Management of Your AutoNation 401(K) Equals A Carefree Retirement

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What to do with your Autonation Retirement

As an employee of AutoNation, you have saved for retirement through the company defined contribution 401 (K) plan. AutoNation, a great company to work for, has helped you save for retirement by matching contributions and offering a variety of investment option for your money. Under a defined-contribution plan, the payout at retirement is not fixed, as it was under the Defined Benefit plans of old. The amount that you receive depends on the contributions you and AutoNation made and the returns earned from the investment.

As much as you have loved working for AutoNation, it is now your choice to retire. You are looking forward to a carefree lifestyle with no worries. The ability to enjoy your retirement will depend on what you do with your AutoNation 401 (K) funds. As much as you trusted and benefitted from the AutoNation investment funds, it is wise to roll over your 401 (K) funds into an IRA. The reasons to make this move are numerous. Read on to see why rolling over your AutoNation 401 (K) is right for you.

Reduced Fees

Most 401 (K) plans provide access to a broad array of mutual funds and sometimes individual securities through a brokerage window, for an addition charge. Administering the funds assets is costly. Employers often pay the fees as part of a benefits package or they might charge reasonable fees as permitted by ERISA. Other plans offer free administrative services. However, they charge for the investment product offered. Additionally, plans charge for pooled investment accounts and mutual funds offered in 401 (K) accounts. This usually equals a percentage of the total assets invested based on the type of investment, aka revenue sharing.

Employees must navigate through the portfolio and make choices for their retirement goals while being concerned with the differential costs of options in the menu. Many authorities have called for greater regulation of excessive fees charged by retirement plans. As quoted in the March 2015 edition of the Yale Law Journal, “The issue is that these plans invest in actively managed mutual funds that siphon off tens of billions of dollars in fees every year, yet they deliver returns that trail the overall market. While persistent over-performance is rare and difficult to predict, fees are relatively transparent and tend to persist.”

More Control

In addition to controlling the fees that you pay, you can minimize the restrictions of what you can invest in by rolling over your retirement account. Most 401 (K) plans have investment restrictions including restricting the employer contribution portion to the funds of their choice. The funds of their choosing can also include investing in the company stock. We all know that keeping your eggs in one basket is a recipe for breakfast not for prudent investing. Even if all the options in the company fund menu involved no fees, a limited choice of mutual funds would prevent you from selecting resources that reflect your risk tolerance and investment goals. Once you roll over your 401 (K), you will have complete control over investing your money.

Simplified Portfolio

If your AutoNation 401 (K) is not your only retirement fund, then it makes sense to consolidate your accounts. Whether the accounts are from several or one other employer tracking them is a nuisance. The benefit of combining accounts is that you will get a complete picture of your investments. It is more convenient to deal with one institution that offers excellent service, low fees, and investment choice. Consolidating 401 (K)s help to establish a strategy based on your current needs, goals and on today’s market. Additionally, regardless of the size of the old fund choices, most likely it is dwarfed by choices available when you roll over to an IRA. Rather than being stuck in the past views of your employer, you can chart your investment course. Do not neglect the wealth you have worked so hard to build with unsuitable investments based on past trends. Instead, reach out to your professional investment advisor to find the investment approach that will be as successful as you have been in all your professional endeavors.

“S.A.C. Investments is an independent investment management firm built on the belief that all investors should have access to unbiased, professional advice provided through a client-first relationship. We are committed to doing our job diligently so you can have the freedom to focus on your ambitions for a good life, now and in the future.” To find out more contact us today.

Sam Curmaci

Department of Labor’s Recent Fiduciary Rule and Its Impact on You

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Department of Labor
The Department of Labor’s upcoming changes in their fiduciary rules will have a major impact on retirement planning in the future.

On April 6th, a new fiduciary rule was announced by the Department of Labor (DOL). This new standard in the retirement and investment world is also referred to as the “conflict of interest rule.” This rule has been in the works since its’ initial proposal a year ago and is set to take effect in part a year from now, with full implementation due in January 2018. This is an overview of this highly anticipated fiduciary rule and a discussion of its’ speculative impact.

Fiduciary Rule

According to online publication Inside Counsel, in an article written by Chris Thorsen on April 18th, 2016, called: “What Does the Department of Labor’s New Fiduciary Rule Mean?”

“The DOL’s final fiduciary rule and related exemptions are intended to protect investors by requiring all who provide retirement investment advice to retirement plans and IRAs to abide by a ‘Fiduciary’ standard – putting their clients’ best interest before their own profit.”

Advocacy groups are pleased with the new standard, according to an article called “DC Industry Generally Gives Fiduciary Rule a Thumbs-Up”, written by Hazel Bradford on April 18th, 2016 in an online publication called Pensions and Investments. The article states:

“Advocacy groups are mostly in favor of the new standard…”

The rule is intended to make retirement and investment advisors accountable with the law, concerning any conflict of interests, which may influence the advice they give investors. Basically, the rule makes advisors legally liable if they’re not providing advice which is in their clients best interest.

On April 5th, Secretary of Labor Thomas E. Perez explained that the rule is a:

“…fundamental principle of consumer protection…”

Yet, on the other hand, James A Klein, president of the American Benefits Council, said:

“…employers appreciate some changes made in the final rule but worry about the ‘potential chilling effect’ if employers cannot provide routine guidance through human resources staff and outside service providers.”

The Pensions and Investments article goes on to state:

“Firms providing investment advice to plans must acknowledge in writing they are acting as fiduciaries. Advisors can continue to receive common forms of compensation, as long as they put their clients’ best interest first and disclose conflicts.”

Speculative Impact

Financial advisors and institutions cannot set their own compensation structures, without a prohibited transaction exemption. This is supposed to put the investors best interest before the advisors’ profit, by not permitting payments that create a conflict of interest. The exemption is referred to as the Best Interest Contract Exemption (BICE). This exemption must be used by an advisor or firm, to receive any compensation considered prohibited by the rule.

The Inside Counsel article explains:

“In response to industry concerns, the final rule also described communications that would not be considered fiduciary investment advice and, therefor, fall outside of this regulatory regime. Examples of communications not covered by the rule include: general communications and commentary regarding investment products, such as financial newsletters; marketing materials; investment education; retirement education; and providing a menu of available investment alternatives from which a plan fiduciary could choose.”

The impact of this new rule from the DOL, which will be slowly implemented and enforced over the next couple years, is still vague and unknown by the industry.

According to the Inside Counsel article:

“…the final rule is both lengthy and complicated. All industry sectors and consumer groups are in the process of studying the details and analyzing the implications of the rule and its exemptions.”

Summary

While advocacy groups and government officials are confident this rule will be a positive change that financial firms and institutions can implement successfully, industry leaders are skeptical and unsure of its’ final impact on day-to-day business. The coming months and years will tell how this new fiduciary rule will impact both investors and financial advisors.

S.A.C. Investments is interested in these current changes being implemented by the DOL, and can help you understand how this fiduciary rule will affect your investment strategy.

We’re an independent investment management firm that already believes investors should have access to unbiased, professional advice provided through a client-first relationship. This means we already put our clients’ investments before any conflict of interest from profit. If interested in learning more, please contact us today.

Sam Curmaci

 

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