401k Costs Got You Concerned?

Concerned by either the start up costs or the continuing costs for your company 401k plan.  These are our costs, contact our office at 215-886-2122


Summary of 401k implementation costs
Adopting Employer Setup & Conversion Fee
– One-Time Setup Fee $0.00
Adopting Employer Annual Administration Fees*
– Annual Base Fee – See note below* $0.00*
Adopting Employer First Year Fee Estimate
– Setup and Annual Asset Based Fee $0.00
Adopting Employer Ongoing Annual Fee Estimate
– Annual Adminstration Fees $0.00
Trustee, Administrator and Custodian Fees
– All costs of Fiduciary Wise, FutureBenefits of America and MidAtlantic Trust 0.65%
– Per Participant Annual Fee $35.00
Servicing Advisor Fee
– Servicing Advisor 0.35%
Potential Additional Fees (charged to participant)
– CMS Risk Managed Portfolios 0.50%
– Termination and Withdrawals $50.00
– Loan Setup (per loan, from participant accounts) $50.00
– Loan Annual (per loan, from participant accounts) $0.00
*For plans with assets less than $167,000, a $187.50 quarterly fee will be assessed until assets reach $167,000. Employers may optionally pay this fee.

Please own more than a single target date fund

Need more than a single target date fund

Three Retirement Opportunities to Consider

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Schwartz Financial ­Weekly Commentary 5/7/18

The Markets

What in the world?

A lot happened last week. Some of the notable events included:

  • Trade talks between the United States and China. The talks were described as “frank, efficient, and constructive,” although significant issues have yet to be resolved.
  • A Federal Open Market Committee meeting. The Federal Reserve indicated it expects to raise rates during 2018, but did not do so last week.
  • Low unemployment in the United States.S. unemployment fell to 3.9 percent, which is the lowest it has been since 2000. Typically, low employment is a sign of a strong economy.
  • Sky-high rates in Argentina. In an effort to shore up the nation’s currency, Argentina’s central bank “…hiked rates to 40 percent from 33.25 percent, a day after they were raised from 30.25 percent.”
  • Katy Perry roasted Warren Buffett. Katy Perry revealed the ‘Left Shark’ – a backup dancer famous for being out of sync during Perry’s 2015 Super Bowl performance – was Warren Buffett.*

What do asset managers and researchers make of the current state of world economies and markets? A portfolio manager cited by Barron’s said, “…until proved otherwise, we remain in a long bull market, and there is an absence of indicators outside of the equity market itself (most notably in credit markets or financial conditions) to suggest this has ended.”

Michael Wilson, Chief U.S. Equity Strategist at Morgan Stanley has a different opinion. “Even strong earnings results haven’t been able to boost most stocks into positive territory. Why? Because rising interest rates have reached a point at which they have become a constraint on valuations.”

Some researchers are concerned about growth outside the United States. Alvise Marino, an FX strategist for Credit Suisse told The Wall Street Journal, “This is really a Goldilocks [U.S. employment] report…But investors are worried that global growth is not as strong as some had thought.”

We’re tracking events and their potential impact on markets, and we’ll keep you informed.

* Warren Buffet wasn’t really the Left Shark. Her comments were part of a humorous video.


Data as of 5/4/18 1-Week Y-T-D 1-Year 3-Year 5-Year 10-Year
Standard & Poor’s 500 (Domestic Stocks) -0.2% -0.4% 11.5% 8.0% 10.5% 6.6%
Dow Jones Global ex-U.S. -0.9 -1.2 11.6 2.7 3.2 0.0
10-year Treasury Note (Yield Only) 2.9 NA 2.4 2.1 1.8 3.9
Gold (per ounce) -0.9 1.0 6.6 3.0 -1.9 4.1
Bloomberg Commodity Index 0.7 2.1 9.5 -4.6 -7.6 -8.2
DJ Equity All REIT Total Return Index 1.2 -4.8 1.7 5.2 5.7 6.2
S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT Total Return Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance, Barron’s, djindexes.com, London Bullion Market Association.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.

Myth Busted! Founders of new companies aren’t who many people think they are. Sure, you’ve read stories about entrepreneurs who leave college to found companies that become behemoths. In fact, The Thiel Fellowship encourages young people to skip college and, “Pursue ideas that matter instead of mandatory tests. Take on big risks instead of big debt.”

While helping young people pursue new ideas is admirable, research from the Massachusetts Institute of Technology (MIT) and the National Bureau of Economic Research (NBER) suggest a different age group is more likely to found successful fast-growth companies:

“Our primary finding is that successful entrepreneurs are middle-aged, not young. Taking numerous measures to identify potentially high-growth firms as well as studying ex-post growth of each firm, we find no evidence to suggest that founders in their 20s are especially likely to succeed. Rather, all evidence points to founders being especially successful when starting businesses in middle age or beyond…Across the 2.7 million founders in the U.S. between 2007-2014 who started companies that go on to hire at least one employee, the mean age for the entrepreneurs at founding is 41.9. The mean founder age for the 1 in 1,000 highest growth new ventures is 45.0. The most successful entrepreneurs in high technology sectors are of similar ages. So, too, are the most successful founders in the entrepreneurial regions of the U.S.”

Almost one-fourth of new entrepreneurs are ages 55 to 64, reports Entrepreneur.com. They often have financial stability, professional support networks, and experience – all things The Thiel Fellowship tries to provide to younger founders.

What’s the point of this story? Age is just a number. People of all ages have great ideas and great potential.

Weekly Focus – Think About It

“The critical ingredient is getting off your butt and doing something. It’s as simple as that. A lot of people have ideas, but there are few who decide to do something about them now. Not tomorrow. Not next week. But today. The true entrepreneur is a doer, not a dreamer.”

–Nolan Bushnell, Entrepreneur

Value vs. Growth Investing (5/04/18)

Name 1-Week YTD 4-Week 13-Week 1-Year 3-Year 5-Year
US Market -0.11 0.41 0.93 -2.70 13.84 10.03 12.71
US Core 0.41 -2.32 0.26 -3.82 9.71 9.33 12.21
US Growth 0.63 6.84 2.95 0.58 23.00 12.21 15.27
US Large Cap -0.10 0.44 0.93 -3.22 14.34 10.54 12.91
US Large Core 0.43 -2.58 0.05 -4.27 9.74 9.99 12.45
US Large Growth 0.23 7.53 2.44 0.31 24.10 13.26 16.15
US Large Val -1.60 -4.00 -1.09 -6.20 8.75 8.13 9.98
US Mid Cap -0.31 0.33 0.62 -1.59 12.79 8.67 12.38
US Mid Core -0.57 -2.04 -0.03 -3.18 9.86 7.54 11.81
US Mid Growth 0.87 4.18 1.47 0.21 18.71 8.61 12.59
US Mid Val -1.30 -1.12 0.37 -1.81 9.79 9.80 12.71
US Small Cap 0.44 0.25 1.79 -0.31 11.75 8.59 11.39
US Small Core 0.09 -0.79 1.79 -1.29 8.99 8.33 11.21
US Small Growth 1.35 5.23 2.10 2.72 21.56 10.75 13.15
US Small Val -0.13 -3.57 1.46 -2.37 5.07 6.55 9.73
US Value -1.44 -3.37 -0.61 -5.04 8.77 8.40 10.54
2004 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar; (2) is not warranted to be accurate, complete or timely. Morningstar is not responsible for any damages or losses arising from any use of this information and has not granted its consent to be considered or deemed an “expert” under the Securities Act of 1933. Past performance is no guarantee of future results.  Indices are unmanaged and while these indices can be invested in directly, this is neither a recommendation nor an offer to purchase.  This can only be done by prospectus and should be on the recommendation of a licensed professional.

 Office Happenings:

Just One Question?????

How is your 401k or HSA Plan doing in today’s market conditions?  Would you not be better off getting a chart like this showing you all the fund choices in your plan updated each and every month?

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Michael L. Schwartz, RFC®, CWS®, CFS


P.S.  Please feel free to forward this commentary to family, friends, or colleagues.  If you would like us to add them to the list, please reply to this email with their email address and we will ask for their permission to be added.


Michael L. Schwartz, RFC, CWS, CFS, a registered principal offering securities and advisory services through Independent Financial Group, LLC., a registered broker-dealer and investment advisor.  Member FINRA-SIPC. Schwartz Financial and Independent Financial Group are unaffiliated entities.


This information is provided for informational purposes only and is not a solicitation or recommendation that any particular investor should purchase or sell any security. The information contained herein is obtained from sources believed to be reliable but its accuracy or completeness is not guaranteed.  Any opinions expressed herein are subject to change without notice.  An Index is a composite of securities that provides a performance benchmark.  Returns are presented for illustrative purposes only and are not intended to project the performance of any specific investment.  Indexes are unmanaged, do not incur management fees, costs and expenses and cannot be invested in directly.  Past performance is not a guarantee of future results.


* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.


* The DJ Global ex US is an unmanaged group of non-U.S. securities designed to reflect the performance of the global equity securities that have readily available prices. 


* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.


* Gold represents the London afternoon gold price fix as reported by the London Bullion Market Association.


* The DJ Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.


* The DJ Equity All REIT TR Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.


* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.


* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.


* Past performance does not guarantee future results.


* You cannot invest directly in an index.


* Consult your financial professional before making any investment decision.


* To unsubscribe from our “market commentary” please reply to this e-mail with    “Unsubscribe” in the subject line, or write us at “mike@schwartzfinancial.com”.



http://www.barrons.com/mdc/public/page/2_3064-485653.html (Click on “U.S. & Intl Recaps,” then “Keeping up with the facts”)




https://www.wsj.com/livecoverage/berkshire-hathaway-2018-annual-meeting-analysis (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/05-07-18_WSJ-Warren_Buffett_Holds_Court_at_Berkshire_Hathaways_Annual_Woodstock_for_Capitalists-Footnote_5.pdf

https://www.barrons.com/articles/a-sampling-of-advisory-opinion-1525478403 (or go to https://s3-us-west-2.amazonaws.com/peakcontent/+Peak+Commentary/05-07-18_Barrons-A_Sampling_of_Advisory_Opinion-Footnote_6.pdf



http://thielfellowship.org (Click on down arrow)

http://mitsloan.mit.edu/uploadedFilesV9/180325%20Age%20and%20Successful%20Entrepreneurship.pdf (Page 5)




Just One Question?????

How is your 401k or HSA Plan doing in today’s market conditions.  Would you not be better off getting a chart like this showing you all the fund choices in your plan updated each and every month?  Give us a call at 215-886-2122.

may 18 p_Page_1may 18 p_Page_2

Medicare Problems

The Medicare Rights Center is a national, nonprofit consumer service organization that works to ensure access to affordable health care for older adults and people with disabilities through counseling and advocacy, educational programs and public policy initiatives.

Every year it fields thousands of calls from people having problems with their Medicare. In its latest report summarizing calls from 2016, it grouped problems into three areas: 1) Medicare Part B enrollment rules and pitfalls; 2) difficulties with Medicare Advantage (MA) health service denials and coverage rules; and 3) financial hardship affording Medicare Part D cost-sharing.

Here’s a typical case: “Ms. B was covered by COBRA and undergoing cancer treatment. She declined to enroll in Medicare Part B because her employer incorrectly told her COBRA would pay as a primary health insurance payer after she went out on disability. While receiving expensive life-sustaining cancer treatment, the COBRA plan stopped paying primary and recouped a year of payments. Ms. B was left without health insurance, charged for thousands of dollars in medical bills, and threatened by providers to cut off her cancer treatment because she lacked insurance coverage for outpatient services.”

The report points out something we’ve been seeing for years, and which inspired our creation of the Savvy Medicare Planning program in the first place: knowing when to enroll in Medicare falls on the beneficiary without proper notification from the Social Security Administration or Medicare. And many employers’ benefits departments lack the Medicare knowledge to guide their employees and retirees on Medicare enrollment. “Whether due to the misinformation provided by employers or lack of access to reliable information about Medicare enrollment, enrolling in Medicare Part B at the right time after employer coverage ends is a challenge that many people can get wrong. Contributing to the problem is the lack of a formal notice about enrolling in Part B or how to use the Part B Special Enrollment Period (SEP), as well as a misunderstanding of Medicare’s coordination of benefits rules when people have other types of health insurance coverage,” the report says.

One area many people get wrong is the special enrollment period that allows people age 65 or older to defer enrolling in Medicare Part B if they have employer coverage. The coverage must be based on current employment of self or spouse; it can’t be a retiree plan. Medicare pays primary to retiree plans—but only if a person is enrolled in Medicare. Medicare also pays primary to COBRA—but again, only if you are enrolled in Medicare. “People with retiree coverage or COBRA who fail to enroll in Medicare will end up without a primary health insurance payer. In some cases, people may slip through and go unnoticed while the secondary health insurance erroneously continues to pay primary. Some beneficiaries explain that they are informed of this employer error only after they have incurred high medical costs. When this happens, Medicare-eligible beneficiaries run the risk of the insurer recouping all payments made to providers.”

The bipartisan BENES Act would improve Medicare notification procedures and fix the coverage gaps in the 5th, 6th, and 7th months of the initial enrollment period and in the January 1 to March 31 general enrollment period, which now makes new enrollees wait until July for coverage to start.

Another area of concern are Medicare Advantage coverage denials. These comprised about 40% of the 16,758 calls to the Medicare Rights helpline. In one case a woman experiencing gastrointestinal bleeding went to the emergency room of an in-network hospital where she was treated by an out-of-network doctor. The plan refused to pay for the doctor’s services because he was not in the network. This was not an isolated case. There were many complaints from Medicare Advantage enrollees who were careful to use in-network facilities where, unbeknownst to them, they were treated by out-of-network doctors.

Medicare Advantage enrollees also have trouble accessing needed care in their plan’s network because the pool of network specialists is limited and may result in long waiting periods for appointments. One person near Portland, Oregon, for example, had to wait up to four months to get an appointment with a dermatologist in her plan’s network to remove cancerous skin tissue. Medicare Advantage plans all have an appeals process, but navigating it is a stressful and onerous task.

About 20% of calls expressed concern about Medicare affordability. Of those, 53% were related to Part B premiums and 43% were related to Part D drug costs. And these calls were not just from low-income people; 44% of callers did not qualify for Extra Help due to the program’s low asset and income limits. One beneficiary who was scheduled to undergo a kidney transplant needed to take a specialty antiviral medication for six months after the transplant at a cost of $2,500 per month. He did not qualify for Extra Help and could not appeal. Medicare Rights is working to improve the affordability of prescription drugs for people on Medicare, including allowing “tiering exceptions” for drugs on a Part D plan’s specialty tier.

The report supports our mission to educate financial advisors on Medicare enrollment rules in order to save their clients some of these headaches. In addition to helping clients enroll in Medicare on time, we encourage you to be aware of Medicare Advantage pitfalls, particularly with regard to the narrowing of provider networks and lack of communication when an out-of-network doctor steps in to treat a patient at an in-network facility. If clients lack access to a good, robust Medicare Advantage plan with an extensive provider network, you might steer them toward Original Medicare with a comprehensive Medigap plan (F or G). For those who insist upon enrolling in a Medicare Advantage plan, alert them to some of these network pitfalls and advise them to confirm that they are being treated by an in-network doctor at the time of treatment (assuming they are conscious and not bleeding).

Proof you are not a good 401(k) investor

The 2017 Quantitative Analysis of Investor Behavior (QAIB) study was published recently. Since 1994, this study measures the effects of the investment decisions that individual investors make to buy, sell, or hold on to their mutual fund investments.

Let me save your reading time by summarizing the bad news with the following quote from the study.
“No matter what the state of the mutual fund industry, boom or bust, investment results are more dependent on investor behavior than on fund performance.”

The simple fact of the matter is that most individual company 401(k) retirement plan participants don’t know “what to buy.” They are confused and have a very hard time determining the best mutual fund options to own on their default company 401(k) retirement plan menu.

Since the bottom of the current stock market cycle in March 2009, all stock market mutual fund investors have made money. But the vast majority of individual company 401(k) retirement plan participants don’t own the best mutual funds options available to them.

There is a huge gap in the investment performance available on a company 401(k) retirement plan menu versus the investment performance earned by the individual company 401(k) retirement plan participant.

That gap costs the individual company 401(k) retirement plan participants tens of thousands of dollars over their working career. With the investment advice technology available today, there is no reason for this situation to continue.

There is a chart in the Dalbar report that states that the average investor earned 3.64% a year over the 10-year period ending in 2016.

Here is the bad news. The low-cost S&P 500 mutual fund option found on most default company 401(k) retirement plan menus returned 6.95% over the same time period. That number is almost twice the amount of the average investor returns.

I have no idea of the size of the current balance of your company 401(k) retirement plan account. But if you compare the investment return of the S&P 500 over the last 10 years versus your investment returns, the gap number is going to get your attention.

For the last 8-plus years you have been able to buy-and-hold and pay no attention at all to your company 401(k) retirement plan account. But it would have been hugely more profitable for the growth of your company 401(k) retirement plan account to have owed the best mutual funds available to you.

If you had another $50-75,000 in your company 401(k) retirement plan account balance today, would your confidence in a more secure retirement be higher? My guess is that the answer would be yes.

In a favorable stock market, the investment returns are there in your company 401(k) retirement plan account. Work a little harder to make sure that you get your share of those returns.

Just for the asking we would love to provide you with a breakdown of your company 401k retirement plan investments the first week of every month.  Why not give yourself an advantage each and every month and give yourself the chance to maximize your 401k investment.

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