CARES Act Translation for Individuals

Coronavirus, Aid, Relief and Economic Security (CARES) Act

Congress and the President passed the largest relief package in the history of the United States into law, estimated to cost over $2 trillion. Given the breadth of the relief provisions, we thought it important to provide a CARES Act translation for individual taxpayers. There is approximately $560 billion of relief available to individual taxpayers.

Direct Cash Relief

The CARES Act provides direct cash relief to individuals in the form of “recovery rebate” checks issued through the IRS with base amounts of $1,200 for single taxpayers and $2,400 for joint filers. Those amounts increase by $500 for every qualifying child. A qualifying child is a dependent of the taxpayer who is under age 17, including a son, daughter, stepchild, foster child, brother, sister, stepbrother, stepsister, or a descendant of any of them.

These relief amounts begin to phase out when adjusted gross income (AGI) exceeds $75,000 for single taxpayers and $150,000 for joint filers. Payments are reduced by $5 for each $100 by which a taxpayer’s AGI exceeds the phase-out threshold, and relief phases out completely when a taxpayer’s AGI exceeds $99,000 (for single filers) or $198,000 (for joint returns).

A taxpayer’s AGI for the phase-out calculation would be based on a taxpayer’s 2019 federal income tax return if it has been filed. If a 2019 return has not been filed, AGI would be based on the taxpayer’s filed 2018 return.

Increased Access to Retirement Funds

Withdrawals: The CARES Act waives the 10 percent early withdrawal penalty (those under 59½) for distributions of up to $100,000 from qualified retirement plans to cover emergency expenses related to the coronavirus.  Income tax on the distributions is payable over three years, and withdrawn amounts can be recontributed within three years.

Loans: The CARES Act allows participants to take plan loans during the 180-day period beginning on the date of enactment and up to $100,000 or 100% of the account balance. Typically, plan loans are limited to $50,000 or 50% of the account balance. The loan can be repaid over six years, instead of the typical five years.

To be eligible for withdrawal or loan relief, an individual must be:

  • Diagnosed with COVID-19;
  • Have a spouse or dependent diagnosed with COVID-19; or
  • Experiencing financial hardship as a result of being quarantined, furloughed, or laid off; a reduction in work hours; inability to work due to lack of child care due to COVID-19; the closing or reduction in hours of a business owned or operated by the individual due to COVID-19; or other factors as determined by the Treasury Secretary.

Suspension of Required Minimum Distributions

The CARES Act suspends all required minimum distributions from IRAs, annuities under 403(a) and 403(b), retirement accounts for 2020. This applies to plan participants as well as beneficiaries of an inherited account. In addition, the year 2020 doesn’t count for any distribution requirement subject to a five-year payout.

Extension of IRA Contribution Deadline

Although not part of the CARES Act, it’s worth reminding that the IRS has extended the due date for any contributions to an IRA until July 15, 2020. It is implied that this extension applies to all various forms of IRAs, including Roth, SEP and simple IRAs.

Expanded Rules for Charitable Deductions

For 2020, the CARES Act temporarily eliminates the current 50% of AGI limitation on deductions for charitable contributions by individuals who itemize their deductions. Taxpayers can use charitable contributions to deduct up to 100% of their AGI. For non-itemizers, the CARES Act provides an above-the-line deduction of up to $300 for cash contributions to charities in 2020.

Expanded Exclusion for Employer-Provided Educational Assistance 

The CARES Act permits employers to pay up to $5,250 annually to provide a studTent loan repayment benefit to employees on a tax-free basis. The $5,250 cap applies to both the new student loan repayment benefit as well as other educational assistance (for example, tuition, fees, books) provided by the employer under current law. The provision applies to any student loan payments made by an employer on behalf of an employee after the date of enactment and before January 1, 2021.

Health Care-Related Tax Provisions

The CARES Act provides that Health Savings Accounts and Archer Medical Savings Accounts can be used to pay for menstrual care products as eligible expenses. Additionally, the CARES Act states that such accounts can be used for the reimbursement of such expenses incurred after December 31, 2019.


These highlighted provisions are a CARES Act translation for individual taxpayers and create new planning opportunities. We carefully review and discuss how they can benefit our clients and families.  If you don’t have a trusted wealth manager helping you in this way, give Budros, Ruhlin & Roe a call.

John Schuman

Co-CEO and Chief Planning Officer

Your future self says, “Don’t panic, this is temporary.”

School closings, travel restrictions, grocery store supply issues and much more time spent at home have increased uncertainty, which sparked some dramatic market volatility. We’ve seen multiple days of negative market returns over the past few weeks and as much as we’d like to pinpoint when the volatility will subside, the reality is that no one has a crystal ball.

However, what we DO know is that this is not the first time we have seen volatility in the market, and it likely won’t be the last. It is critical to remember this is not the time to panic and we are here to help you weather the storm.

Resist the urge to mess with your 401(k)

We understand that when individuals and their families experience financial strain, it may be tempting to take funds out of your 401(k) to get by. This takes the focus off long-term planning and could be very detrimental to your retirement savings.  Our guidance is to evaluate all potential sources of cash before tapping into these funds.

One of the most powerful investment concepts is the power of compounding returns. Compounding returns simply means when the money in your account grows over time, future growth is based on not only the amount of money you originally contributed, but also includes past returns. When you leave your money invested, you give your investments the chance to compound their returns and grow exponentially over time. If you take money out of your account, the magic of compounding returns disappears.

One study shows that by taking a $5,000 loan early in your career you could reduce your retirement savings by 20%.1 When you’re years away from retirement, it may feel like you have plenty of time to make up your contributions at a later time, but this should be considered a last resort in the hierarchy of financial solutions.

Let history show you the course.

Many investors try to ‘time’ the market by trying to sell as prices fall and buy back at lower prices.  The reality is that if you sell investments in your 401(k) and move them to cash equivalent funds, you are likely locking in the loses that have already taken place in your account.

The key to a successful retirement account has and always will be to invest for the long-term and to stay the course. In other words, don’t make changes to your strategy when you get anxious. In the past 20 years, six of the best ten days in the market have occurred within two weeks of the ten worst days.2 It is easy to let emotions get the best of us when we see concerning headlines on a day-to-day basis but we need to remember why we save in a 401(k).

The savings in your 401(k) are intended to give you security during retirement, when you may have upwards of 20 years of expenses to cover after you enter this stage of life. Your future self will thank you for finding other resources to cover short-term expenses during market or health crises.

Your team at Budros, Ruhlin, & Roe is here as a resource during these trying times. Please reach out to Hannah Walls or Eric Shisler if we can be of assistance with questions relating to your 401(k).

Hannah Walls, CRPS®

Retirement Plan Services Specialist



2 JP Morgan Guide to Retirement, 2020

Leverage the Fed’s interest rate cut for your financial advantage

The Federal Reserve announced an emergency interest rate cut of one-half of a percentage point, reducing the U.S. federal funds’ rate to a range of   1-1.25 percent. While the primary goal of the rate cut was to stabilize the economy after fears surrounding the coronavirus, it has an impact on nearly everything. You’ll want to understand how to leverage the Fed’s interest rate cut for your financial advantage before making a change to mortgages, auto loans, student loans, and checking and savings accounts.


Mortgage interest rates are currently at or near all-time lows. This may beg the question, should I refinance my mortgage? While the thought of a lower interest rate may be attractive, there are other factors to consider before starting the process.

Start by comparing the interest rate spread between your current mortgage and current interest rates. Refinancing can be attractive when the interest rate spread is equal to or greater than one-half of a percentage point.

Next, evaluate the closing costs and how long it will take you to break even on your closing costs. Also decide how long you plan on living in your home. If you have an adjustable rate mortgage and you plan on living in your home longer than the initial fixed interest term, it is certainly worth looking into either refinancing into a new adjustable-rate mortgage that is better aligned or a fixed-rate mortgage that provides more flexibility. If you do not plan on living in your home long enough to breakeven on your closing costs, it probably does not make sense to refinance.

Auto Loans

Auto loans have fixed interest rates that are tied to Treasury yields, however, falling rates will likely not predict what dealers and auto lenders will offer. If you are in the market for a new or used car, consider securing bank financing before going to the dealership. Bank financing may allow you to better take advantage of currently low interest rates.

Student Loan Refinancing

Do you have high-interest student loans? Has your income or credit increased significantly since you last refinanced your student loans? If you answered yes to either of these questions, now may be a good time to consider refinancing your student loans.

Interest rates being at or near all-time lows could reduce your monthly payment amount and/or your remaining loan term. If you have federal student loans, keep in mind that refinancing with a private lender may forfeit benefits such as potential loan forgiveness, lower repayment plans, deferment and forbearance.

Checking and Savings

Lower interest rates typically mean that any balances in your checking or savings accounts will earn less interest. These accounts should not see much impact by lower interest rates, as they are currently yielding next to nothing. However, if you have a high balance in your checking or savings accounts, you should consider opening a high-yield, online savings account. While these accounts are also subject to lower interest rates, they continue to yield more than one percent to one and one-half percent more than a typical checking or savings account.

Use these tips when evaluating how to leverage the Fed’s interest rate cut for your financial advantage.  If you’re a high-income earner looking for additional guidance in debt reduction, investment management, tax and estate planning or asset allocation, the advisors at Budros, Ruhlin & Roe are here to help.  Our program called GROWwithBRR can address uncertainties about building your financial future.

Kevin Wuebker, CFP®

Senior Wealth Manager



Forbes Names Dan Roe #8 on Best-In-State Wealth Advisor List

Forbes honored Co-CEO and Chief Investment Officer Dan Roe with a #8 ranking in its 2020 Best-In-State Wealth Advisors list for Ohio. He’s the first advisor listed for Columbus out of 131 named and thousands considered in the state.

SHOOK Research chose each advisor based on an algorithm of qualitative and quantitative criteria, including interviews, industry experience, compliance records, revenue and assets under management.  Advisors do not pay a fee for placement on the list.

Congratulations, Dan, on this industry recognition by one of the most respected financial media outlets in the U.S.

Daniel B. Roe, CFP®

Chief Investment Officer | Co-CEO

The Forbes ranking of Best-In-State Wealth Advisors, developed by SHOOK Research, is based on an algorithm of qualitative criteria, mostly gained through telephone and in-person due diligence interviews and quantitative data. Those advisors who are considered have a minimum of seven years’ experience, and the algorithm weights factors like revenue trends, assets under management, compliance records, industry experience and those that encompass best practices in their practices and approach to working with clients. Portfolio performance is not a criterion due to varying client objectives and lack of audited data. Neither Forbes nor SHOOK receive a fee in exchange for rankings. For more information, please visit:


April Tax Strategy Deadlines That You Thought Were in December

If the holidays hindered your best tax-efficiency intentions, take heart.  There are areas where you have until the 2020 tax filing deadline to take action, overriding a December 31, 2019 deadline assumption. Here are two, last-minute tax saving strategies of which you can still take advantage.

Traditional IRA Contributions

One last-minute, tax saving strategy is contributing to your traditional IRA.  If you were younger than 70-½ on December 31, 2019 and had earned income for the year, the IRS allows you and/or your spouse (even if he or she has no earned income) to make traditional IRA contributions up until the tax filing deadline of April 15, 2020. The age restriction on traditional IRA contributions has been removed for 2020 and beyond, thanks to the recently passed SECURE ACT.

The maximum contribution for 2019 is $6,000, or $7,000 if you were age 50 or older last year.  These contributions are fully deductible, unless you or your spouse are covered by a retirement plan at work.  In that case, the deductibility of these contributions is subject to certain income limits.

If you are single and covered by a retirement plan at work, the deduction completely phases out if your Modified Adjusted Gross Income (MAGI) exceeds $74,000.

For couples, if you file jointly and you are covered by a retirement plan at work, your deduction completely phases out if your combined MAGI exceeds $123,000.  If you’re not covered by a retirement plan at work, but your spouse is, your deduction completely phases out if your combined MAGI exceeds $203,000.

It’s worth noting that even if your traditional IRA contribution is non-deductible, or only partially deductible, it still offers additional advantages in terms of tax-deferred growth and future Roth conversion opportunities.

Health Savings Accounts (HSAs)

Another last-minute, tax saving strategy is contributing to your HSA. If you have a high-deductible health insurance plan through work (deductible of at least $1,350 for single coverage or $2,700 for family coverage, with an out-of-pocket maximum of $6,750 and $13,500, respectively), you are eligible to contribute to an HSA up until the tax filing deadline of April 15, 2020.  You can contribute up to $3,500, if you have single healthcare coverage, or up to $7,000 for family coverage.  If you were 55 or older at any time during 2019, you can contribute an additional $1,000 to your HSA.

The contributions you make are 100% tax deductible but be sure to take into account any contributions your employer might make on your behalf.  Employer contributions count towards the maximum contribution limit and cannot be deducted on your return.  Regardless, contributing to your HSA remains one of the best tax strategies available.  Your personal contributions not only save you taxes on the front end, but also grow tax-free and come out tax-free if used for qualified medical expenses.

Not surprisingly, the ability to adjust your taxes diminishes considerably after the tax-year ends, so the best course of action is to begin thinking about tax savings strategies early in the year.  The advisors at Budros, Ruhlin & Roe are well-versed in the intricacies of tax planning and consider it a valuable, ongoing piece of comprehensive wealth management.   We often partner with your existing accountant to leverage our collective skills and arrive at the very best tax strategies to benefit you and your family.  If you or someone you know is looking for guidance with wealth and tax planning, we would welcome a conversation to identify how we can help.

Michael Kline, CFP®

Senior Wealth Manager

Financial Deadlines that Affluent Widows Can’t Afford to Miss

Losing a spouse is undoubtedly one of the most difficult periods of someone’s life.  Widows should allow themselves time to heal emotionally from the loss, to then be in a better place to make major investment decisions.  However, there are a few investment scenarios that have time-sensitive deadlines within the first nine months of the loss.   Here are two financial steps that affluent widows should consider that could save millions.

Take advantage of federal lifetime estate exemption portability

The Tax Cuts and Jobs Act of 2017 raised the estate tax exemption and scheduled another increase beginning in 2020.  The new legislation eliminates federal estate taxes on amounts under $11.58 million, meaning individuals can give up to $11.58 million each in gifts over their lifetime without having to pay gift tax. This is referred to as a federal lifetime exemption.

Any gifts made during lifetime or at death in excess of the individual’s exemption will be taxed at 40%. The federal lifetime exemption is “portable” which means a surviving spouse inherits any unused exemption at their spouse’s death. In order to “inherit” the exemption, the surviving spouse must make the election by filing an estate tax return (Form 706) within nine months of the decedent’s death. For couples with large estates, this step could save upwards of $4.5 million in estate tax.

Document a step-up in cost basis

Cost basis is the original value, often the purchase price, of an asset. When an item is sold, there is a tax on the profit (difference between the purchase price and sale value) – known as the realized gain. The realized gain on most assets held more than one year is taxed at 0%, 15%, or 20%, depending on taxable income, with collectibles taxed at 28%.

When an asset is inherited or received as a result of death, the asset should receive a “step-up” in the cost basis. This means the recorded purchase price is adjusted to the fair market value at the date of the decedent’s death.  This not only applies to assets held solely by the decedent, but also assets held jointly. The executor must document the cost-basis adjustment on the estate tax return which is due within nine months of the spouse’s death in order to save on taxes.

For example, let’s say you and your spouse purchased a piece of artwork for $50,000 decades ago and titled the piece jointly, which means each spouse has a cost basis of $25,000. Your spouse passed away several years ago when the piece was valued at $200,000. Now the piece is worth $300,000 and you’d like to sell it. If you failed to step-up the basis and used the original purchase price as your cost basis, your capital gain would be $250,000, resulting in a tax of $70,000. When, upon your spouse’s death, their cost basis on the artwork should have increased to $100,000, resulting in a total cost basis of $125,000 and a capital gains tax of $49,000 upon the sale.

Act within the first nine months

The common steps after suffering a loss of getting multiple copies of the death certificate, renaming beneficiaries on all insurance policies, retirement accounts and other financial accounts, updating a will and estate documents, and contacting the Social Security Administration are very important.  But educating yourself around the federal lifetime estate exemption portability and cost basis step-up will ensure that you don’t suffer tax implications from the loss.

Advisors should counsel their clients on these key deadlines, as we do at Budros, Ruhlin & Roe.  If you or someone you know is looking for some assistance with wealth and tax planning, we would welcome the opportunity to discuss how we can help you achieve your goals.

Samantha Anderson, CFP®

Wealth Manager


Exposing the Hidden Repeal within the SECURE Act

While the focus of the recently passed SECURE Act is greater retirement plan access and information, hidden within the Act is a provision that repeals the changes made to the Kiddie Tax by the Tax Cuts and Jobs Act of 2017 (TCJA).  This repeal may have financial benefit for parents who were affected two years ago.

Historically, the Kiddie Tax applied to all children 19 and under and children who are dependent, full-time students between the ages of 19 and 23.   A child’s salary or wages earned are taxed at the child’s individual tax rates; unearned income a child receives from income-producing property (or investment property), such as cash, stocks, bonds, mutual funds and real estate, is taxed at the parent’s tax rates.  This was designed to discourage wealthy parents from putting investment assets in a child’s name and having the unearned income from the assets taxed at rates lower than their own.

The TCJA went one step further and taxed a child’s unearned income at trust income tax rates.  Trust rates reach the highest tax bracket of 37% at $12,950 of income versus $622,050 for married couples.  Lawmakers believed this to be a better way to simplify the Kiddie tax reporting and capture income at higher rates while preventing wealthy parents from manipulating their income tax rates.

Unintended Consequence

The unintended consequence of this Kiddie Tax change caused survivor benefits received by children of servicemembers who died in active service, or Goldstar families, to be taxed at these higher trust tax rates.  As a result, for low- or middle-income Goldstar families, the child’s benefits were taxed at rates that were significantly higher than the surviving parent’s tax rate.

Congressional Fix

Once this came to light, both houses of Congress looked to address this anomaly.  The Senate passed legislation that would simply treat the survivor benefits as earned income which would have taxed the benefits at the child’s tax rates.  However, this called into question if other survivorship benefits paid to children should be considered earned income.  Lawmakers resolved the Goldstar issue by simply repealing the TCJA Kiddie Tax changes in the SECURE Act.

Action Steps for Parents

While the TCJA Kiddie Tax provision is effective for the 2020 tax year, the SECURE Act also allows taxpayers to retroactively apply this repeal to the 2018 and 2019 tax year.  This is a good example of politicians getting something right on both sides of the aisle.

If you were subject to Kiddie Tax reporting in 2018, you should consider filing an amended return to claim a refund of any excess tax.  There is a good chance that the parent’s income tax rate is lower than the trust income tax rates. For 2019 and thereafter, Kiddie tax planning becomes no different than in prior years. The disincentive to shift income to your children remains but isn’t as punitive as under the TCJA.

Parents affected by the change in 2018 should talk to their advisor about revisiting 2018 returns.   Budros, Ruhlin & Roe prides itself in following changing legislation and how it impacts our clients, and we’d be happy to talk with you about our wealth management services as well.

John D. Schuman, JD, CFP®, CPA (inactive)                                

Chief Planning Officer and Chief Compliance Officer / Co-CEO

President Scott Rister Named to Leadership Trust

Columbus Business First named Scott Rister as a 2020 Leadership Trust member.  It’s an invitation-only community for top business decision makers in Columbus.   Scott was selected for his depth of leadership in the financial services industry, most recently working almost 20 years with Charles Schwab & Co prior to joining Budros, Ruhlin & Roe.  His passion for encouraging financial education and diversity in thought are relevant in today’s business landscape.

“Columbus’ thriving business community is powered by leaders like Scott,” said Nick Fortine, president and publisher of Columbus Business First.  “We’re honored to be creating a space where the region’s business influencers come together to increase their impact on the community, build their businesses and connect with and strengthen one another.

Watch for more from Scott in articles, panels and forums.  Congratulations, Scott, on this honor.

What the SECURE Act Means for You

As expected, the Setting Every Community Up for Retirement Enhancement Act (“SECURE Act”) has become law after passing as part of the recent spending bill.  The House of Representatives approved it in early 2019 with bipartisan support, but the legislation was held up in the Senate until now.  Let’s look at a high-level view of what the SECURE Act means for you.



The intent of this legislation is to make retirement plans more accessible and give participants in retirement plans greater information.  For example, the SECURE Act expands participation to part-time employees, allows for IRA contributions after age 70½, requires plans to provide participants an annual estimate of the monthly payments received if the account were annuitized and allows annuities to be offered by plans.  Clearly, the insurance lobby was instrumental in this aspect of the SECURE Act.


The most impactful aspect of the SECURE Act for our clients is the change made to required minimum distributions from retirement plans beginning in 2020.  The Act basically eliminates the “stretch” out opportunities of an IRA paid to children and grandchildren.   We have counseled that an outright gift of your IRA to a child allowed your child to take minimum distributions over their life expectancy. For example, if a child is age 50 upon the parent’s death, the account could be distributed over approximately 34 years or more.

Under the SECURE Act, the account will need to be completely distributed over no more than 10 years. The Act provides a few exceptions to this 10-year payout: 1) minor children (until age of majority), 2) disabled and chronically ill individuals, and 3) individual not more than 10 years younger than the participant.

The SECURE Act foundationally supports the thinking that IRA and retirement accounts are designed for the benefit of spouses and not for the benefit of the next generation of the family.  Essentially, there is no change to how IRAs and retirement plans are left between spouses. A surviving spouse can still rollover an IRA inherited from his or her spouse. The major difference you’ll see from the SECURE Act is in benefiting children and grandchildren and only applies to those who begin to take minimum distributions in 2020 and beyond.



This 10-year payout has significant impact on IRAs that name trusts as beneficiaries.  Many clients name trusts as the beneficiary of their IRA to provide management and control of the assets for children.  The concern is trusts’ income tax brackets are significantly compressed, meaning income gets to the highest bracket very quickly (at about $13,000).  As the SECURE Act increases payout amounts, these amounts will be in higher brackets.

In addition, many trusts were designed to immediately pass out the anticipated small amount of minimum distribution based on life expectancy to avoid the trust’s income tax.  Based on the new 10-year rule, these trusts are going to be sending a much larger amount out to the beneficiary, undoing the management and control desired by the client.



For those who have not yet been required to take a distribution, one benefit of the new SECURE Act is the start date of taking required minimum distributions.  Now, minimum distributions don’t have to start until age 72 (instead of 70 ½).  This gives some extra time for deferral of income taxes as well as more opportunity for Roth conversion planning in lower income tax years.

Any change in tax law requires attention and review.  We are working with clients to address how this new tax law impacts planning of retirement plan assets and help implement any changes to beneficiary designations.  The SECURE Act also calls into question whether Roth conversions of retirement assets have a broader application to clients and their beneficiaries.

Should you be in the market for a wealth management firm to counsel you in financial planning and monitoring issues like these, consider Budros, Ruhlin & Roe and put our 40 years of experience to work for you.

John D. Schuman, JD, CFP®, CPA (inactive)

Three Ways to Make Your Financial Resolutions Doable.

Let’s be honest – most of our New Year’s resolutions get thrown by the wayside a few months (or weeks, I’m not judging) into the year. Often times, this is because our resolutions are entirely too broad to actually be implemented in our daily lives. For example, stating “I want to be healthier” is a great goal, but may be better stated by planning to cook at home five nights a week or committing to going to the gym for 30 minutes four times a week. Being specific in our goals is the key to success.

The same concept applies to make your financial resolutions doable.  When it comes to your 401(k) plan, my guess is that you set it up when you were first eligible to join your company’s plan, quickly filled out the paperwork, and maybe glance at your quarterly statement as you’re filing it away. Since we’re living longer and could spend over 30 years in retirement, our 401(k) account deserves an annual check-up and action behind it.

So how do you set realistic 401(k) resolutions this year? Here are three tips to try.

1. I will understand what investments I own and why.

Flip the ‘set it and forget it’ approach to a more active view, especially if your portfolio consists of one target-date fund. Since target-date mutual funds now hold over $1 trillion (a massive increase from $158 billion in 2008)1, it’s clear that many participants are using these strategies as an easy way to manage their retirement dollars – and for good reason. These funds can be an excellent choice for someone who is not necessarily comfortable choosing the individual funds they want to have in their portfolio. However, even if you do own a target-date fund, it should be your goal to understand what the fund is and why you are invested in that particular fund in your account.

Conversely, if you are the type of investor who likes to select your own funds, the best practice is to monitor and consider rebalancing your portfolio and adjust for any risk tolerance changes as you grow closer to retirement.

Whether you’re invested in a target-date fund or choosing your own funds, these assets are your dollars that you worked so hard to earn, so be active in reviewing your account at least annually. Even if you think your spouse “has it covered”, it’s your 401(k) and it’s important to take the initiative to understand the investments, just in case something happens suddenly to your spouse.


2. I will increase my contribution.

It’s rare that you find a retiree who says, “I wish I hadn’t saved so much money towards retirement”.  A 2019 study from T. Rowe Price shows the median 401(k) deferral rate for male Baby Boomers is 10% and 8% for male Millennials. For women, the deferral rate is 7% for Baby Boomers and just 5% for Millennials.2 Many retirement plan experts recommend striving for a deferral rate between 10-15% of your income. Even though the percentage varies from person to person, the fact still stands – most people aren’t saving enough.

While some plans have an efficient option called ‘automatic escalation’ in place, which increases your contribution rate each year automatically for you, many plans don’t offer this feature. This means it’s up to you, as the participant, to consider increasing what you’re putting away in your 401(k) each year. If this feels next to impossible, consider increasing your contribution by 1% this year, then reevaluate next year and try for another 1%.  Remember that your salary is likely increasing a bit each year and your investment contributions should grow as your income grows.

Keep in mind that employee contribution limits can change each year (for 2020 it’s $19,500 and if you’re over 50 years old, you are allowed a catch-up contribution of an additional $6,500), so make sure you don’t exceed those limits.

Another feature to monitor is an employer match. If your company offers one and you’re not contributing at least the full amount to receive your entire company match, you are leaving those dollars on the table.  If it’s available to you, this is a valuable compensation offer in addition to your salary – don’t miss the opportunity!


3. I will update my beneficiaries on my accounts.

Your beneficiary is the person who receives the money in your 401(k) in the unfortunate case that you pass away. If you’re married, you are required by federal law to have the beneficiary listed as your spouse. If you decide you do not want your spouse listed as the beneficiary, this will require a signature (that may need to be notarized) from your spouse stating that they are aware they are not the beneficiary on the account.

Failing to list a beneficiary leaves your family without access to any funds until the probate court takes the case, evaluates all of the potential recipients in the situation, and assigns a beneficiary. Most don’t want this decision to be outside of their control. If you experience a life change of any sort or have not yet named a beneficiary, be sure to update your beneficiary information to avoid a potentially sticky situation down the road.


Picking one of these tips to start or any combination will make your financial resolutions doable and give you more confidence in understanding your retirement strategy.  And think of how great it will feel to be able to say you’ve actually fulfilled a New Year’s resolution this year.

Hannah Walls, CRPS® – Retirement Plan Services Specialist

Budros, Ruhlin & Roe

1Morningstar 2018 Target-Date Fund Landscape Report

2 T. Rowe Price, Retirement Savings and Spending 4: Financial Behaviors and Attitudes