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SFB092 Confessions of a 401(k) Freak

| February 20, 2018
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Episode Summary

Michael Fennessy is the Regional Sales Director for Ameritas and an expert when it comes to 401(k) plans and inspiring business owners and their employees to save for retirement. For the past 14 years Michael has helped a variety of companies from small business owners to Fortune 500 companies with implementing employee benefits. For the past four years he’s concentrated his work on how to create situations where there is tax-free money available at retirement.

In this episode, Paul and Michael will teach you about strategies regarding your retirement plan and how it’s more than just the investments you make. If you’re a business owner or an entrepreneur, you will learn how putting money in and out of the plan and how you choose to put money in for your employees impacts how much you can add.

What Was Covered

  • 03:51 - Michael’s background and the work he’s been focusing on over the past 4 years
  • 08:30 - The tax benefits that comes with choosing a Roth 401(k)
  • 14:15 - The catch-up provision in your 401(k)
  • 15:28 - In-plan Roth conversions
  • 18:49 - Michael’s 401(k) scorecard giveaway
  • 26:03 - Michael gives an example where a couple used a certain tax strategy to extract value from a business and get it on their personal balance sheet
  • 28:21 - Required minimum distribution and the penalty for not taking it at 70 and a half years old
  • 32:26 - Roth dollars not requiring minimum distributions
  • 33:32 - How business owners can put hundreds of thousands of dollars a year from the business balance sheet to their personal balance sheet
  • 36:35 - ERISA code 410B: Benefit coverage and highly compensated employees
  • 39:50 - How coverage works in a cash-balance plan
  • 46:09 - The biggest reason that stops business owners from exploring being more creative in their 401(k) strategies


"We have studies that prove that even by offering a retirement plan in a company, no matter what size you are…they’re ability to succeed in retirement…"

"Once you make the employee base aware that Roth is available, more people start deferring."

"If you offer benefits to 100% of your highly compensated, everyone else is a non-highly compensated, you only have to offer benefits to 70% of that population."

"The way coverage works in a cash balance plan is you have to offer benefits to 40% of your population or 50 people."

"To this day, I still run into plan sponsors that have no idea that they can access a Roth benefit for themselves and their employees."

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