{"id":4521,"date":"2014-08-11T05:37:49","date_gmt":"2014-08-11T12:37:49","guid":{"rendered":"http:\/\/staging-prblog.paladinregistry.com\/blog\/?p=4521"},"modified":"2015-11-03T16:04:13","modified_gmt":"2015-11-04T00:04:13","slug":"retirement-plans-need-separated-employment","status":"publish","type":"post","link":"https:\/\/www.paladinregistry.com\/blog\/retirement\/retirement-plans-need-separated-employment\/","title":{"rendered":"Why Retirement Plans Need to be Separated from Employment"},"content":{"rendered":"

In light of the Hobby Lobby decision and the discussion of employer benefits, it seems appropriate to address the merits of employer provided retirement plans.\u00a0 When I have broached the idea of separating retirement plans from employment, the common response I receive is employees won\u2019t be able to save on their own.\u00a0 Putting aside the idea that treating people like children becomes a self-fulfilling prophecy, there is no reason to think that people wouldn\u2019t save for retirement on their own.\u00a0 Were people incapable of saving before<\/a> their retirement savings were tied to their employer?\u00a0 If people can still feed themselves without their employers providing food, can\u2019t they also figure out how to retire?<\/p>\n

Those who make their living from the retirement plan industry tend to think they can\u2019t, which is one reason why I\u2019ve argued the industry is a racket<\/a>.\u00a0 These same \u201cexperts\u201d also tout the value of tax-deferred savings, but ignore the evidence<\/a> that excessive retirement plan fees often nullify their tax-deferred advantage.\u00a0 Consequently, many retirement plan participants would actually be better off with the liquidity advantage and superior investment choices that taxable accounts provide.<\/p>\n

But what about the employer match? \u00a0Why would anyone want to forgo this benefit?\u00a0 The answer is that while people should take advantage of the match, they shouldn\u2019t necessarily contribute any more for the reasons stated above.\u00a0 The larger issue, however, is that the match is in lieu of salary, not in addition.\u00a0 For this reason, responsible savers are forced to sacrifice liquidity and investment quality in order to line the pockets of experts who \u201cserve\u201d the industry<\/a>.<\/p>\n

Furthermore, retirement plans put a significant burden on businesses, especially small businesses that lack the resources to sufficiently understand how these plans work, what they are paying for, and how much they are actually paying. \u00a0Having spoken to thousands of retirement plan sponsors, I can attest that they are all still thoroughly confused in spite of the new disclosure rules to promote transparency.\u00a0 Imagine how much more productive these businesses would be if they no longer bore this responsibility.<\/p>\n

A true financial advisor should not necessarily be advising businesses on how to improve their retirement plans, but rather question if they need a plan at all.\u00a0 Congress increasing IRA contribution limits to the same level as 401(k) plans would at least be a step in the right direction.<\/p>\n","protected":false},"excerpt":{"rendered":"

In light of the Hobby Lobby decision and the discussion of employer benefits, it seems appropriate to address the merits of employer provided retirement plans.\u00a0 When I have broached the idea of separating retirement plans from employment, the common response I receive is employees won\u2019t be able to save on their own.\u00a0 Putting aside the idea that treating people like children becomes a self-fulfilling prophecy, there is no reason to<\/p>\n","protected":false},"author":45,"featured_media":4527,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[117],"tags":[],"class_list":["post-4521","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-retirement"],"yoast_head":"\nRetirement Plans need to be Separated from Employment<\/title>\n<meta name=\"description\" content=\"It is appropriate to address the merits of employer provided retirement plans In light of 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