Castle Rock Investment Company

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Advice

Why You Need A Budget

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By Mack Bekeza

Budgeting sounds difficult, right? Well actually, not really. In fact, it is even more difficult not to maintain a budget. Many people think they don’t need a budget, but end up broke by the time their next paycheck comes in. This can lead to a never ending cycle of not having any money left over and not being able to accomplish financial security, which is never fun!

Budgeting is very important to not only maintain financial security at the homestead, but it can be a very powerful tool to help reach your goals like saving for a house, retirement, and even a nice vacation every now and then. If you are curious on how to get started, check out these tips.

  1. When starting your budget, it is important to pay yourself first! In other words, make sure the first thing you do when you get paid is to deposit a small amount into your savings. This can be used to fund a rainy day fund, a home improvement project, contribute to your retirement accounts, or preferably, a combination of those.
  2. Once you have “paid yourself”, budget towards the expenses that don’t vary like rent, insurance, utilities, etc.
  3. Next (and here comes the part that can help you big time), it is time to budget for things that are more discretionary like groceries, eating out, clothes, subscriptions, and much more. Easy targets for this include eating out and shopping. Typically, these two things are what people spend way too much on and end up not being able to pay some important bills or even save. Before setting goals for this part, make sure that you are able to figure up how much you spend on these items by looking through bank statements. This will help give you a clear view on what you can cut back on. For instance, if you figure out that you spend an average of $500 a month eating out and only $200 on groceries, set a goal to cut back on eating out and spend a little more on groceries. This alone can save you hundreds of dollars a month, which can go towards your savings goals!

Now that you have a basic idea of how to budget, are there any tools that can help you? Yes! There are plenty of free or low cost budgeting tools that can help you accomplish this rather quickly. For instance, Mint.com is an excellent and free way to track and manage your expenses. Another one includes YNAB.com, a.k.a you need a budget. For as little as $5 a month, you can have access to an exceptional budgeting tool that allows you to have access to a user friendly mobile app as well.

Hopefully you take these tips to get your finances together and accomplish big goals… now get to budgeting! Also don’t forget to follow us @Save4Youself to get more tips for your finances!

© Castle Rock Investment Company. All rights reserved. Please share your insights with us at mack@castlerockinvesting.com or via phone at 303-719-7523

 

Risk Management: Employee Retirement Plans

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Risk ManagementCastle Rock jumps through hoops to be among the best investment advisors. Not every investment advisor goes through the same rigorous training because these hoops are not legally required. We do not think that making best practices a legal requirement will diminish our status as one of the best firms around, but we do think that selecting an investment advisor should be less risky for Plan Sponsors.

You are supposed to be careful of sales pitches that avoid using the term “fiduciary” but stress “education” instead, because those are not interchangeable services. The difference between these services would be like exchanging accounting for bookkeeping services, or medicine with surgery, or heads with tails in a coin toss. Providing education does not negate a need for a fiduciary; rather, a fiduciary investment advisor should be around for cases where education does not meet the plan’s needs, and an expert opinion is necessary.

How confident are we that Castle Rock is the place to turn? We are the best retirement investment advisor around. You can check our About Us section to be sure, or better yet Contact Us.

Our qualifications exceed all of these expectations, but you may want to check to see if your own advisor is able to eliminate some of the risks to you as a plan sponsor[1]:

  1. At least 50% of assets under management in qualified retirement plans (ours are 99%);
  2. Has an Accredited Investment Fiduciary™ or similar designation;
  3. SEC Registered Investment Advisor (RIA);
  4. Make sure your advisor has been working in the industry for at least a decade;
  5. Get a fee agreement that clearly states how the fees will be charged; and
  6. Make sure that fiduciary status is in writing.

To show your support for conflict-free advice in all retirement plans, please sign the petition here at: http://www.thepetitionsite.com/414/401/760/tell-washington-to-stand-up-to-wall-street/

 

Michele L. Suriano, Accredited Investment Fiduciary™, is president of Castle Rock Investment Company, a woman-owned SEC registered investment advisory firm serving qualified retirement plans. www.CastleRockInvesting.com

In-plan Roth Rollovers: the latest topic

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Get out your red pen, folks: serious revisions to the rollover options for your plan. Today we’re looking at how you will need to revise your Plan Document in order to offer in-plan Roth rollovers and a few highlights.

In-plan Roth rollovers of otherwise non-distributable amounts are treated as eligible rollovers, meaning that no withholding applies. Since this amount is not distributable, no part of the rollover may be withheld for voluntary withholding. An employee making an in-plan Roth rollover may need to increase his or her withholding or make estimated tax payments to avoid an underpayment penalty. Concerning the rollover process, here is a critical section to know from IRS Notice 2014-74:

 

If you do a rollover to a designated Roth account in the Plan

You cannot roll over a distribution to a designated Roth account in another employer’s plan. However, you can roll the distribution over into a designated Roth account in the distributing Plan. If you roll over a payment from the Plan to a designated Roth account in the Plan, the amount of the payment rolled over (reduced by any after-tax amounts directly rolled over) will be taxed. However, the 10% additional tax on early distributions will not apply (unless you take the amount rolled over out of the designated Roth account within the 5-year period that begins on January 1 of the year of the rollover).

If you roll over the payment to a designated Roth account in the Plan, later payments from the designated Roth account that are qualified distributions will not be taxed (including earnings after the rollover)…

Remember, if you’re making revisions to your Plan Document, then Best Practices direct you to get an ERISA attorney, and make sure you’re fulfilling your fiduciary responsibility.

 

Katherine Brown is a Research Associate at Castle Rock Investment Company with a Master’s degree in Global Finance, Trade, and Economic Integration from the University of Denver. She can be reached at Katherine@castlerockinvesting.com.

How May I Help You?

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Castle Rock is dedicated to making retirement transition easy for you. One of the best ways to do that is to be with you in retirement transition and throughout the different stages of your retirement. We are excited to announce that we will soon offer a Retirement Transition Service to ease the retirement process for individuals, and to provide our clients with the piece of mind that all participants are taken care of.

Because we want you to have a part in how we build this new service, please reach out to me at Katherine@CastleRockInvesting.com with your comments and goals for retirement. We will try to incorporate as much as we can into the best service for you.

Stay tuned as we introduce the details of this program!

What is a BrightScope Rating?

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They began by developing an algorithm, the BrightScope Ratings™, to assess the quality of a retirement plan on the company level.  It takes into account 200+ unique data inputs per plan to calculate a single numerical score to define 401k plan quality.    The algorithm runs simulations for each plan in order to determine how quickly each 401k plan will get the average 401k participant to retirement.  Factors include company contributions, fees, investment menu quality, vesting schedules, and eligibility periods.
As a plan sponsor you can subscribe to their Plan Management Dashboard which was launched in July 2009 in order to view the underlying BrightScope data and calculations and do a thorough fee analysis that benchmarks each fee you are paying.  In September 2009 BrightScope also launched Advisor Central as a prospecting tool for brokers and advisers to purchase data on a subscription basis to target retirement plans with low rankings.