Retirement

Founded in Neenah, WI in 1872, Kimberly-Clark is a multi-national personal care corporation that employs approximately 43,000 people worldwide. While the company is now headquartered in Texas, Kimberly-Clark still has a major presence in Wisconsin. 

Last week, K-C announced they are laying off approximately 5,000 employees, many through a voluntary severance program.  

John Weninger, CFP^® of Endowment Wealth Management researched the Company’s Plan and the severance package.  He compiled a list of important things to know about the company’s 401(k) plan, and also issues that K-C employees who are considering accepting the severance package should evaluate when making their decision. 

In his blog post, 10 Things to Know About the K-C 401(k) Plan, John comments on the Plan’s wide ranging benefits and features, including annual contribution limits, Roth conversion features, profit sharing, vesting benefits, investment options, loan provisions, asset reallocation, rebalance notifications, and withdrawal provisions for both existing and former employees.

In K-C Voluntary Severance Package 2018, John covers the basic items employees should consider when reviewing a severance offer.  Since 401(k) contributions cannot be made from severance pay, anyone thinking about accepting a severance should consider increasing their 401(k) contribution for their remaining employment.

John’s extensive reviews on this issue are posted to his blog at MyCompanyRetirementPlan.com.  If you work for a major employer and would like to request that John review your company’s retirement plan on a future blog post, send him an email.  

Educational purposes only.  Not legal or tax advice.  You should talk to an investment professional before making investment decisions.

November is National Family Caregivers Month. Caregiving often involves providing for the needs of our older family members, friends, and neighbors. As the number of older Americans rises, so will the number of caregivers. While we take this time to recognize our caregivers, it’s also a good time to consider planning for long-term care. According to the U.S. Department of Health and Human Services, almost 70% of people over age 65 will need some type of long-term care during their lifetimes. Between the ages of 40 and 50, on average, 8% of people have a disability that could require long-term care services. The average yearly cost for long-term care in a nursing home is about $74,820 for a semiprivate room, while the average annual cost for care in an assisted-living facility is $39,516.

Now is a great time to get educated on the significance of long-term caregiving in general and the importance of planning for long-term care within your overall financial plan.
5 Questions about Long Term Care

The ongoing litigation in Tibble vs. Edison reached the Supreme Court recently in a dispute over the high cost of retail mutual fund share classes in 401(k) plan when lower cost institutional share classes were available.  The defendants argue that the statute of limitations alleging the fiduciary breach had expired.

The case serves as a reminder that Plan fiduciaries should review plan investments each year to see if there are changes and if they are appropriate for the plan.

An article titled “A Better Option Than Target-Date Funds” written by Prateek Mehrotra, CIO of ETF Model Solutions and Endowment Wealth Management was recently published in the Industry Voices column on PlanSponsor.com.

In the article, Prateek discusses the following drawbacks of TDFs:

• TDFs assume a “one-size fits all” and fail to take into account unique risk profiles and investment objectives of participants
• TDFs mechanical shift to conservative assets in later years sacrifices growth opportunities
• There is no industry standard for the optimal portfolio allocation
• TDFs with higher allocations to long-term bonds are more sensitive to interest rate risk

He also suggests that because equity prices are extended, investors in retirement plans might want to consider reducing their interest rate risk and equity risk by diversifying into alternative asset classes with lower correlation to stocks and bonds, such as commodities, real estate, hedge funds and private equity- asset classes to which TDFs do not typically allocate.

The entire article can be read here.