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Three Resolutions

It’s also considerably more optimistic. So assuming the ancients were wrong and the Congress can get it right, we thought we’d express our confidence about the New Year by offering our resolutions now. Herewith, in 2013 we at GuidedChoice promise to:

Remain dedicated to our mission. “Financial freedom for everyone” has always been our goal. It’s a lofty one, but we’re serious about making it easier for people to pursue their financial goals of saving for retirement, spending their money strategically, and eventually giving it away or passing it on wisely. Not just people with employer-sponsored plans, or those whose finances happen to fit the parameters of a particular solution, but everyone.

Stay focused. Now that the recession finally seems to be behind us (despite lagging employment numbers and monetary worries), some in our industry will begin the cycle of discovering or inventing new consumer needs, promoting new buzzwords, and cranking out an increasing variety of new “must-have” features and products. It’s an inevitable side effect of better times. We have some new ideas in store, too, but we promise that the goal of making investing simpler and easier will always drive our product development – rather than letting the development cycle drive us.

Continue to lead. We’ve always been ahead of most of our peers. Sometimes it’s lonely out there, where simple good sense can seem like a contrarian attitude. But we’ve often been gratified to see conventional wisdom catch up sooner or later. We’ll keep the faith, and keep confidently leading our industry.

Two Predictions

No year-end reflection would be complete without a few predictions as well. Here are two:

Retirement income will grow in importance. The needs of retirement-age Baby Boomers are largely driving the industry today. Many of these sixty-ish investors are finding that saving for retirement may have been the easy part. They’re looking at their savings, thinking about the next few decades, and saying “now what?!” The answers are rather complex, and we think serious discussions about them, not to speak of actual solutions, are just getting started.

So will IRAs. Between corporate M&A churn, job turnover, career changes, and self-employment, relying solely on employer-sponsored plans for retirement savings may become as much a thing of the past as the pension plans 401(k) replaced. In any case, the role of the IRA will continue to expand. At the same time uncertainty about taxes has all but taken the place of worries about inflation. So expect tax strategy, and specifically the balance of Roth vs. traditional accounts, to become a bigger part of the retirement conversation.

And One Lump (of Coal?)

Finally, we can’t ignore a recent announcement that IBM will start contributing its 401(k) match as a lump sum starting on December 13, 2013. It’s easy to see how the change could help the company retain talent, reward tenure, and save some money. It may even help savvy employees maximize their gains by front loading their own contributions while still getting the full match.

Matching all at once, however, deprives most employees of potential earnings they might have gained throughout the year. It ensures that those who leave the company mid-year get nothing at all. And a more subtle disadvantage is that it also prevents the automatic dollar-cost averaging that comes with regular contributions.

Regardless of how one sees this decision, it does make investment decisions more complicated for IBM employees, and for others as well if the move starts a trend. Retirement investors hardly need another reminder that ultimately their success is up to them – and that most would benefit from dedicated, independent advice. We see it as a reminder that our mission is just as important is it’s ever been. We promise to take that knowledge to work every day in 2013 and beyond.