401k Convo (Episode 20)

[00:00:00] That money is being invested and its growing inside the account. And if you have a match,

[00:00:05] that matches the credit, it's adding on to it right? So you should leave money on the table.

[00:00:12] Welcome back folks. This is episode 20 of whoo we're moving right up on there man. Episode

[00:00:17] 20 is It's About Your Paycheck. Check out the sign. And what's up? Well how are you doing

[00:00:24] today sir? Man happy Thursday I'm good man bro we're almost in the end of the first quarter

[00:00:32] of 2024 already man. It feels like it just got here and its like a quarter of the way

[00:00:38] it almost done. And it's just like time is time waste for no one. I don't know I keep saying

[00:00:43] that man but man time is of the essence sir how are you man? Yeah agree, no agree and as we get

[00:00:49] old it's something like age. It just I don't know what it does the human experience as we get

[00:00:55] older time flies and maybe we're in the matrix maybe it's just all a game but it's great because

[00:01:03] I'm doing some planning out and I'm like yeah oh man that's got to be in July and I'm like

[00:01:08] him. I feel like July is far but it's not far and it's great yeah it's just crazy at the time

[00:01:17] of it all. And yeah folks you know today we're talking about 401k speaking of time running out

[00:01:27] right appropriately so some retirement planning is appropriate and you know actually there's a

[00:01:35] fun fact about 401k they say that if you start saving young like 20 years old you know if you start

[00:01:41] full-time saving in a 401k plan or IRA IRA is an independent retirement account. A 401k is

[00:01:48] usually through your job you get you know your W2 employee and it's a benefit that they offer you

[00:01:55] or access really to this account and you know it's for retirement anyway the fun fact is if

[00:02:02] you start saving at 20 you know the the the mathematicians all the the finance folks say that

[00:02:08] you could be a millionaire by 40 you know you could have saved them saved and in a 401k have a

[00:02:15] mast earn you know I can't say saved but or earned but have grown this account to a million dollars

[00:02:23] right. I don't know what it is was that contributed contributed contributed or put away you know

[00:02:30] a million dollars yeah yeah we'll get into the a little bit more of it after our news update

[00:02:36] so let's do our pay news update. This episode is presented by TimeTradGov the simply better employee

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[00:03:28] tracgo.com or call 888-321-9922 let's go. Mine is quick it's actually based on the

[00:03:40] a news piece that Walter shared with me earlier today we're constantly like sharing stuff back and

[00:03:45] forth and prepping for the show and it's really just kind of caught my eye and or ear rather about

[00:03:51] a stat that this one outlet throughout it was 80 that apparently AI is going to replace up to 85

[00:03:58] million jobs in the in the next day I forget the time frame that they said 2025 and they just go

[00:04:04] by 20. Dang that's next year yeah you know and I don't say it to be scared what's up. One of my

[00:04:15] friends who actually works for one of the biggest accounting firms they're already experiencing that

[00:04:19] their job where they laid off a bunch of admins to have and told them because we have AI.

[00:04:27] That's correct and then they want to well I guess they have to have to be honest yeah that's it

[00:04:33] that's you know it brings a couple of things up right like one there's a site that folks are talking

[00:04:39] about on TikTok a lot I don't know what the site is right now it's a government site about like when

[00:04:43] a company is is going is planning pre-planning a layoff they have to file that with the government

[00:04:50] like they have to it's like probably has to become public knowledge. I don't know what the criteria

[00:04:55] it I should find this all out we should really know all this but I don't know what the criteria

[00:04:59] is like to mandate the the notification or whatever but come you know basically you can go check

[00:05:07] this out you know what TikTok is saying is like don't be surprised the information is there go to

[00:05:11] this website and you'll see if your company is planning a layoff right so that's one thing

[00:05:17] be mindful of that right go find that you found it yeah yeah so it's on the the US Department

[00:05:23] of Labor.gov you have to find it through there it's called it's called Warn

[00:05:28] WAR and data database and that's that's there you know the worker adjustment and rotating

[00:05:36] notification act and it requires employers over 100 or more employees to provide at least 60

[00:05:45] calendar days advanced written notice of plant closing or mass layoff. Yep does it say like

[00:05:52] does it does it tell you who has to do that like why you know all employers over 100 but

[00:05:59] hmm nothing else no other criteria no other legalese and un kind of we have to read we have to read

[00:06:06] the act to read through yeah yeah but there it is Warn right go look at it and so I only

[00:06:15] no pun intended I only warned you because if you don't see your company and you get laid off

[00:06:20] it might be because of that all these government things it's all legal things and loop holes

[00:06:26] and whatever so any who that's a good outlet to go kind of be informed see if your company is

[00:06:31] planning a layoff but in the second piece of it on this show we believe to invest in yourself right

[00:06:39] continue education continue learning either through reading absorbing listening whatever it is you

[00:06:46] do whatever your learning medium is keep doing it because when those layoffs come you'll be prepared

[00:06:53] right maybe you won't get laid off because maybe you raise your hand and say well I know how to work AI

[00:06:58] hey you know AI is coming great I know how to I know how to prompt and I know how to do this and I

[00:07:03] know how to machine you know so if you're already preparing yourself now then you have

[00:07:10] opportunity to keep work or find new work very quickly right if you're kind of preparing yourself

[00:07:15] I think that at our levels in HR and payroll we got a ways to go still right because you know I think

[00:07:24] at the practitioner level you become the person that deals with the AI and you become the in between

[00:07:31] yeah maybe we lose team members maybe the junior you know some entry level or juniors may have to

[00:07:37] retool and relearn and you know do some other things I think for our work I think we're still a

[00:07:43] ways off for that even though that that that that article was talking about how like bachelor degree

[00:07:49] purple are going to be the most impacted maybe if you're just coming out of college right now because

[00:07:54] you're still at entry level you know I think I mean shoot one of the shows we were talking about how

[00:08:00] they're hiring without bachelors and without degrees now so yes you know I kind of took that with a

[00:08:06] grain of salt like I can go down the rabbit hole with that because I have an idea of why companies

[00:08:12] would want to do that go for it yeah from the bachelor's because think about it if somebody has a

[00:08:19] bachelor degree they usually in most cases get paid a little bit more than somebody who doesn't have

[00:08:26] a degree should hopefully yeah hopefully and so what happens is what happens is is that in those

[00:08:34] in those situations maybe the companies might be like hey we can save money if we got rid of that

[00:08:39] part of the workforce have AI do their piece and just keep the juniors to just kind of do maintenance

[00:08:47] yeah that yeah yeah yeah because that same article said if you have a high school diploma

[00:08:53] you're less impacted you know so it's it's weird you know at the end of the day folks

[00:09:00] empower yourselves and keep investing in yourself keep learning keep going keep growing right yeah

[00:09:06] that's enough for my my shriplio you got a nice hard to talk about that yeah right yeah we can go on

[00:09:12] on yeah exactly no we keep talking about it I mean I think yep I think we we keep talking

[00:09:20] about it I think that'll be a good maybe we could find a guest or something like but you know

[00:09:24] that's that I don't know they talk a lot about AI I mean I'm sure we can do it ourselves too but

[00:09:31] be nice to get a third you know some some opinion some outside opinion but anyway what do you

[00:09:36] got for us today sir man so I found this I found this is interesting article I saw it on

[00:09:45] TikTok or social media the other day and so I just in research and Wendy's like it came out that

[00:09:52] Wendy's was thinking about doing dynamic search pricing basically what search pricing is for

[00:09:58] those of you that don't know it's like also known as dynamic are on demand pricing right or

[00:10:04] demand pricing it's a pricing strategy where businesses adjust the prices of their products or services

[00:10:10] based on demand typically during peak hours or when demand is high and so the goal for that is to

[00:10:17] balance supply and demand by encouraging consumers to adjust their purchasing behavior so what that

[00:10:24] would mean is that during those busy times if Wendy's actually went through with this they actually

[00:10:29] came back out and said hey we're not doing that we know sorry you know oh really yeah because people

[00:10:34] got really mad about it like yeah like people got upset about it like this is this is this is

[00:10:39] how we robbery like yeah absolutely yep so what what happened is that during lunch during the

[00:10:45] lunch hour the lunch rush the prices that Wendy's with increase and so you and set up in the normal

[00:10:52] price let's say $10 a meal you might have to pay 15 20 11 and lunch well yeah you know you

[00:10:59] don't have to pay a little bit more for the for the meal and that would kind of dismay people from

[00:11:05] going to Wendy so much if they did that now I'll give you a I won't go through all the different

[00:11:11] industries are different notes that I have here but I'll just give you the different type of

[00:11:15] industries that use this type of things like Uber lift traffic that already you search yeah

[00:11:21] because yes there are companies that use search pricing already so it's not like foreign but

[00:11:26] Wendy's was trying to be the first food service to do it yes that's that that's what I pay

[00:11:32] checks that's not cool yes so the hospitality industry hotels and airlines they often adjust their

[00:11:38] their prices based on seasons so you know during the holidays like why is my why is it

[00:11:43] why is airfare so much more because everybody's trying to travel during the holidays so they

[00:11:48] increase it entertainment and events ticket sellers sporting events they increase like super

[00:11:54] bold that's why the super bold tickets are so much more gosh then the regular tickets or

[00:11:58] the bleacher sheet is like $2,000 it's crazy yeah or like I went to a couple Miami heat games

[00:12:04] I love going to Miami heat games when I was okay why and I just love it I love their arena or

[00:12:11] yeah I love their arena you know I love Miami heat to my team right but I noticed that the ticket

[00:12:18] prices are different when the Boston Celtics come to town versus when the team that's right time

[00:12:24] comes to town like the tickets adjust right because it's in your paying for the entertainment it's

[00:12:29] like more people want to get in when a high profile team is coming to play our boys delivery services do

[00:12:35] the same thing door dash grow up so like if there's a sporting event or something like that going

[00:12:39] on and you want to order like the delivery fees may be a little bit higher they may add a little

[00:12:44] bit more to the price of stuff right and then some utility companies do the same thing which is

[00:12:50] what I found interesting because I didn't know that utility companies do that as well and they say

[00:12:55] that some may even more may even implement that search pricing for electricity or water during high

[00:13:02] peak hours it's just crazy man so do your research you can go to websites like Harvard business

[00:13:08] review MIT slow management review and other academic databases to find out more information about

[00:13:15] search pricing and how it may affect you on your day-to-day life interesting man yeah yeah that's

[00:13:22] all I've been hearing about is Wendy's with that search pricing deal yeah Wendy's had to walk

[00:13:29] effectively so they walked it back they were trying to do it because they were struggling anyway

[00:13:38] so now people ain't coming at all you know they're like oh I'm just not going to go to Wendy's

[00:13:43] you know yes interesting yeah man yeah let's speak and save in money yeah this is so we can talk

[00:13:52] again we're talking about 401k and again if if for those of you don't know 401k is a product that

[00:13:58] is offered by our employers to save money as a retirement plan you don't have to do 401k you can do

[00:14:06] an IRA outside you can do robinhood and invest directly you could there's a multiple there's a

[00:14:13] variety of choices to invest in you know as we say on this show all the time right we're not saying

[00:14:19] what to invest in we're just saying it's good to invest you should invest you and you should

[00:14:24] diversify your investments you should have 401k you should have a robinhood account you should have

[00:14:29] a IRA you should have all these things and for different reasons but that that's that's for you to

[00:14:33] go out and get hungry about it go research it we're talking about 401k today and it is an easy

[00:14:39] cool tool especially if you're just starting out if you're like well I don't know what to do

[00:14:45] 401k is a great product to do that because it's a it's a plan it's a popular type of retirement

[00:14:51] savings plan in United States offered by many employers it has several key benefits that make it

[00:14:56] attractive option for employees looking to save for retirement right and one of the easy thing to

[00:15:02] have like an easy button for it because when you if you get set up if your employers is offering

[00:15:08] it to you and you log on and you set it up online everything is a portal you can just pick

[00:15:14] like the age you want to retire and they literally have a plan where you can just say okay I want

[00:15:21] I'm 25 now when I retire when I'm 55 or 50 and you can pick that plan as a target and meaning

[00:15:30] they will take the funds that you contribute and they will invest it in the market accordingly

[00:15:36] to your plans right and they put they'll do different things they'll they'll they have different

[00:15:42] strategies to invest your money now you can get granular you can get in the weeds with it you can

[00:15:47] go down the rabbit hole if you want with it and pick your own and divide my contributions over

[00:15:54] these plans and van guard and efts and mutual funds and all the fancy things that know but we don't

[00:16:01] even understand right you can do that if you're savvy if you're savvy you can do it if you're not

[00:16:07] you can just pick this target plan like yep I want to retire there that's what to do and then

[00:16:11] with the the record keeper is called like a popular one now is in power as well as Fargo also has

[00:16:19] a product but a lot of the big banks have these products as a 401k 80p has their own 401k product

[00:16:26] so I believe paychecks also another one so anyway what they do in the background is they'll

[00:16:31] invest your money accordingly to that now another big not only are you saving money right

[00:16:36] but a couple of other benefits to that is maybe your employer does a match meaning and they

[00:16:45] you know employers kind of get a little I don't I don't want to say they play on they play with the

[00:16:53] words right because they'll say okay it's 2% up to the first 25% of the 50% of your first dollar

[00:17:01] you know and it's just it's instead of being straightforward like hey we're just going to match

[00:17:07] you know x amount right they'll say 50% up to the first 5% you know so whatever it is right what you

[00:17:15] want to do is talk to your either you're either the right the 401k provider or your HR department

[00:17:21] to understand how you don't leave money on the table right so meaning if you do have a match

[00:17:28] not all companies have to offer a match by the way if you do have a match and the company does

[00:17:34] let's say 50% up to the first 5% right they play on the percentage right and you do only 2%

[00:17:45] or 3% you're leaving the other 2 or 3% on the table you shouldn't right you should maximize

[00:17:51] their match right if the employer has a match make sure you maximize their match if not it is

[00:17:59] what it is you can you know I still I still urge I still urge people to do it because

[00:18:04] you started off the show perfectly with this with time how quickly time goes right yeah I

[00:18:12] see and I mean shoot I see folks state jobs 5 10 years and they never contributed there for 1k

[00:18:21] and then they had a match and all that and they're like you know how much you would have had

[00:18:26] in 5 10 years even just doing 20 30 bucks a check that would have been a few thousand like

[00:18:32] thousands and thousands of dollars because now it's not only the flat money you're contributing that

[00:18:37] money is being invested and it's growing inside the account and if you have a match that matches

[00:18:44] adding on to it right so you shouldn't leave money on the table it's like you said that's one of the

[00:18:49] benefits yeah go ahead go ahead go ahead go ahead no no good it's like you said man there's

[00:18:56] it's never too late to start right the earlier the better nope but if you're like you view around

[00:19:03] our age enough in your 40s or whatever and you haven't done 4 1k start now right they said

[00:19:10] they were tired they said the retirement age has increased it went from like 60 something to like

[00:19:14] almost 70 now right so like it depends on how many years later and you were born in yeah more people

[00:19:22] having to work longer you know in order to try to save up for retirement right so start now

[00:19:28] investing yourself go ahead here's another good call I'm glad you said that because one if you're

[00:19:36] in your 40s right you got at least another 20 years of working and 40s still young you have at

[00:19:42] least another 20 years of working think about that right 20 years so you can still do that million

[00:19:47] right instead of 20 to 40 it's 40 to 60 unfortunately and you can still get to that million or

[00:19:54] millions and here's here's the another call out after I believe it's after 50 or 55 this is very

[00:20:01] regulated you could look up these rules on IRS and all that for 401k after 50 or 55 you're allowed

[00:20:07] to contribute more right so let me backtrack and 401k you're limited to how much you can contribute

[00:20:14] every year because it's a pre-tax benefit what is that Brian pre-tax benefit means you know we all pay

[00:20:21] taxes right and when we pay taxes we in a w2 environment hey sorry my dog you're crazy and if we

[00:20:30] pay taxes in a w2 environment we're paying it every paycheck every paycheck we're paying taxes

[00:20:37] and then we go file and we reconcile that we say oh you know here's what you should have paid

[00:20:43] is I'm gonna get you to pay more or get money back right what what pre-tax benefit does

[00:20:51] is it lowers the amount that we have to pay taxes on so if we got paid a thousand dollars

[00:20:57] in our check and we usually you know and we and now we have but now we have a 401k benefit of

[00:21:03] $200 coming out you're only going to pay taxes on $800 for the federal government not the

[00:21:10] full thousand so that's the ben that's the beauty of the pre-tax benefit that's why employers don't

[00:21:17] have to give a match because they're already giving you a benefit they're giving you access

[00:21:22] to lower your tax liability right and we talked about tax brackets in one of the shows right

[00:21:28] right you think it about right and and and essentially you can drop into a lower tax bracket

[00:21:37] if you maximize all of your pre-tax deductions because it's not just 401k it's also medical

[00:21:43] dental and vision and then there's a few other ones in there too that are also pre-tax if you

[00:21:48] maximize all that and 401k you lower your benefit I've seen folks 40s in their 50s don't not

[00:21:57] donating contributing their their whole paycheck to 100% of their check their entire check right

[00:22:04] now that doesn't it doesn't work the way they think because they have to do the taxes first

[00:22:08] and that's more for the payroll side of the show but point is they're like putting it all they're

[00:22:15] trying to get it all in there and it's and it could drop those folks are definitely dropping into

[00:22:21] lower tax brackets because they're put their contributing as much as they possibly can and again

[00:22:25] after a certain age of 50 or 55 I think it is you can contribute more than what's allowed so that's

[00:22:34] a huge benefit and then after 59 and a half and unless they've changed it you can start with drawing

[00:22:42] from that account tax-free well not on my tax-free but without penalty right because because it's a

[00:22:49] retirement account there are some penalties if you try to withdraw earlier bus ages 50 thank you

[00:22:58] so after 50 you can contribute more but then another benefit is yes they penalize if you try to

[00:23:05] withdraw but you can get loans on that money so most most companies will allow you to get loan

[00:23:13] because it's your money right so if you let's say you've been in a bunch of years and you have a

[00:23:17] mast $20,000 you know in your 401k you can you can get a loan for like 10 15 and I think they allow

[00:23:26] up to like 80% of what your max of what your balance is and guess what you just paying yourself back

[00:23:32] right so what I what I urge people to do there is if you get a loan and let's say you already have

[00:23:37] a 401k right you know this Brian you're ain't telling me nothing no problem make sure you stay with

[00:23:43] your contribution even when you're paying your loan back right because you're you're really

[00:23:47] maximizing those contributions you're paying yourself back but also contribute because what a lot

[00:23:52] of people do is you're allowed to stop contributing when you're repaying the loan back

[00:23:58] but you're actually allowed to do both so do both right and then there's another product that's

[00:24:03] associated with 401k is called a Roth some people call the Roth 401k basically it's an after tax

[00:24:10] deduction and contribution to your account for growth if you that's a diversification if you

[00:24:15] can do both do both right because that's going to help you because it taxes you now but the Roth

[00:24:21] later doesn't tax you okay pre for the 401k it's a deferred tax you're deferring your

[00:24:27] taxability till later Roth you're paying the tax now and it's no tax later so if look if you're not

[00:24:34] in doing 401k yet do the research get into it get go start investing remember we're not telling

[00:24:42] you what to invest in but we go invest it will change your life it will change your thing what

[00:24:47] is going to give us some stats around this and 401k's and some interesting things that make you

[00:24:52] think about wow shoot I need to invest right yep thanks thank you man one thing before I go on

[00:24:59] you did mention about how employers contribute so I googled it while you were talking

[00:25:07] and a shirm has an article out there and they said that 92% of US employers offer match

[00:25:17] what 92% yes holy cow see that's that's an incredible stat because that kind of it's almost it

[00:25:27] almost kind of shames the employers that don't provide a match right because that now now I'm

[00:25:35] going to you like I got to I need to keep that stat handy like 92% shoot wow yeah that's good see

[00:25:42] so mostly y'all out there have match capability you haven't take advantage go do go do take

[00:25:48] advantage of 401k that's free money man yeah if you give 3% and your company matches up to 3% or

[00:25:56] 6% whatever it is like that's that's 6% are up to 12% that you can have a 401k think about that

[00:26:04] if this 10% 100 thousand dollars you know in a year that's 10k that you can have

[00:26:12] for that year put away yep 10k times 20 and that's that's it yeah and and and and it's not only

[00:26:22] that it's exponentially growing right because of the market is doing well and if they if you're at

[00:26:26] that if you do the 10k guess what you're only paying taxes on 90k a year right if that's your

[00:26:32] only pre-tax it could go even lower if you leverage the other ones right so now you you're that

[00:26:38] and that's where the benefit is that's what folks are not that's what we you know especially

[00:26:43] well you know what it's changing I don't even know what you're going to say it but not

[00:26:47] enough folks leverage right that just take advantage of these opportunities these benefits out there

[00:26:52] 92% of companies are given match no abuse yes sir all right man so I'm going to give you some stats

[00:27:01] and trends that I got from 401k specialist mag calm and they were talking about six striking trends

[00:27:09] from a new bank of America report now this report I think it was done in 2023 2022 so just keep

[00:27:16] that in mind but I found it interesting right early recent though yeah yeah so among the 401k

[00:27:24] plans recorded and kept by Bank of America 58 of all eligible employees participate so think about

[00:27:32] that a little bit more than half 50% of all yeah 58% and so that included 62% of men and 55% of women

[00:27:44] so think about that that is saying that more men participate in 401k than women now it's pretty close

[00:27:53] was like 7% but yes slightly more yeah that's right there here's another interesting stat of the

[00:28:00] five that I have millennials are the least likely to participate in a 401k plan at 54% and

[00:28:10] of the millennials that do contribute 70% of them contribute less than $5,000 annually right so

[00:28:17] for some reason millennials aren't art maybe that's because they're diversifying their

[00:28:25] their investments and not doing it when they put in somewhere else I don't know but it's an

[00:28:31] interesting stat right and I wonder if I want to find out more about why that is so in addition

[00:28:38] in addition only 4% of millennials are contributing a lot of allowable max which was 20 a little over 20,000

[00:28:49] in 2022 compared to 12% of Gen X and 14% of boomers so that speaks to some wage stuff and some you know

[00:28:58] maybe some inflation stuff whatever it may be I don't know all the factors it didn't say but

[00:29:02] you know I find to interesting that millennials seem to be consistent right because yeah

[00:29:09] 70 like we say 70% of Americans live paycheck to paycheck so these numbers are consistent with

[00:29:15] that if you're living paycheck to paycheck you're not investing aggressively right you're not even

[00:29:21] thinking about it you're gonna be under the one of these people who are contributing less than 5,000

[00:29:26] a year you know and 20 books of a check maybe and you're not really making that impact that you should

[00:29:32] you're not hitting your limits when you get in you know so yeah yeah get it so and then here's

[00:29:38] another stat comparing men and women so overall men have 55% more money in 401k balances than women

[00:29:48] so think about that so they're saying basically men have over 30,000 dollars more than women in

[00:29:55] their 401k and that could be another show let's speak to the wage gap and you know

[00:30:00] that speaks to the wage gap yeah yeah yeah we talked about it that speaks to the wage gaps you know

[00:30:05] and that hopefully will change in in the next 10 to 20 years but here's another here's an

[00:30:10] interesting stat right that I think it may be changing with Gen Z amongst the younger retirement

[00:30:17] savers in the workforce Gen Z women which is up to the age of 26 have overtaken Gen Z men

[00:30:24] and total retirement savings with 3% higher account balances on average so maybe that is like a

[00:30:30] shift that we're seeing like women are women are getting paid more and earning more equal or whatever

[00:30:37] and so Gen Z is starting to shift that right so all these older generations yeah what's up

[00:30:47] what was your saying well I was gonna say the older generation should now those older

[00:30:50] generations are actually pulling pulling from the accounts now so yeah their numbers are gonna go

[00:30:54] down because they're living off of it now that's good to see though that young women are the

[00:31:00] Gen Z are being more aggressive and I think that's you know I was going to say something earlier

[00:31:05] and I stopped myself like oh you know because black and brown we don't know enough and we're

[00:31:11] not investing it's not true anymore right right now I've seen more you know black and brown folks

[00:31:20] young folks being interested in investing and savvy than I've ever seen before right so that's

[00:31:29] why I stopped myself because I'm like you know what that's not true anymore I think we you know

[00:31:32] because of the information age we've caught we've closed that gap and now we are investing we are

[00:31:40] using the Robin Hoods of of apps and you know rocket money and all these savvy nerd wallet and all

[00:31:48] these things are listening to podcast and learning right my daughter's only 20 right remember she

[00:31:53] was on the show she was talking about she wants to get a financial advisor and all that stuff like

[00:31:58] she's you know so it's definitely I love to see that at the younger because that's where you really

[00:32:04] make your impact with investment in financial wellness is starting at young right I didn't have

[00:32:10] that guidance young man I messed up my credit young and didn't know about you know blue it all right

[00:32:17] like I didn't have that guidance and it took me a while to kind of teach myself and then it takes

[00:32:22] a while to implement the discipline to actually do these things because knowing is not doing right so

[00:32:30] we can do there no things or oh yeah I know I know it's billion things but you're if you're not doing

[00:32:35] it then it's not change right changes and change until you change yes sir but so I'd love to see

[00:32:41] that I love to see that young folks are making a difference I love that too man so for that means

[00:32:46] to me is that the generations have been teaching their kids like hey you need to be prepared because I

[00:32:52] wasn't prepared hopefully yeah and they're just kind of passing that down that's kind of what I think

[00:32:56] about them my last stat here or they seeing their parents broke us now sorry yeah they're seeing

[00:33:01] the struggle yeah for those of you listening you may be thinking about investing and you seen your

[00:33:09] you're seeing your parents struggle now or you know they're going through and you seem like hey I

[00:33:13] don't want to go through that so let me prepare myself better yep you and you investing in 401k

[00:33:18] investing in whatever like that's gonna help towards your retirement like you have to start now

[00:33:23] start now yeah so the last that I have before we get into our safe talk and close the episode is

[00:33:30] employee participation rates more than doubled when plans have an auto enrollment feature

[00:33:37] bank of America found that 84% of employees participate in 401k when it has auto enrollment while

[00:33:46] only 37% of employees participate in plans without auto enrollment so like when the company

[00:33:54] offers like hey we're gonna auto or you want it then employees are just like okay cool yeah

[00:33:58] just leave it like it is like that's fine I need to do it anyway but yeah it seems like

[00:34:03] when there's not that we're employees that's a big drop man think about that 84% compared to 37%

[00:34:11] yeah 50 something yeah yeah that's that's that's 47% it's almost 50% right yeah so like

[00:34:17] that's a huge drop man so like that means employees are opting in like to 401k I want to kind of

[00:34:28] understand the the mental behind it of why that is like why I could tell you a few things okay

[00:34:37] well you can I mean you can think of you're right what would you think because

[00:34:42] shoot ask yourself now are you contributing to 401k plan at your job right and if the answer is no

[00:34:48] why not so those are the some other reasons right like I think for me I've convinced myself

[00:34:54] at times oh well if they don't have a match then I'm just I can invest right and that's

[00:35:02] the wrong attitude because you should you should do something because if you said it and forget it

[00:35:08] right and that's why the auto enrollment has such increased participation because you're like all

[00:35:13] right you know what yeah I'll do 10 to because they start you low so yeah so I've been a

[00:35:20] plan administrator for a long time on that side so we often start the employees low 1% 2% 3% and then

[00:35:28] it's an auto escalation as well it auto go it go increases over the years automatically so to get

[00:35:34] you more aggressively in but but folks and that's what I meant to say just because it's auto enrollment

[00:35:40] it's not mandate so usually your company upon new hire they'll tell you hey if you don't opt out

[00:35:48] this is going to auto enroll you in you got to opt out by this day if not your first paycheck is

[00:35:53] going to have 401k deduction and it's not a bad thing right you should let it happen and the

[00:35:58] number speaks to it 84% of employees participate in 401k when it has auto enrollment so that the

[00:36:03] number speaks to it so but again it's not mandate you can come out of it it's not a bad thing I think

[00:36:09] I think sometimes companies don't have to answer your question war I think some of the companies don't

[00:36:14] have a good a possible reason is not good awareness sometimes you get hired and you don't even

[00:36:19] know the company had you don't even know they have 401k right they don't if they don't do a good

[00:36:25] job of keeping it in your face then and if they don't have auto enrollment that that's why

[00:36:32] people don't even know then think about also the demographic now or not demographic but

[00:36:38] the way work is changing with the gig economy and there's a lot more free-lancing and things

[00:36:46] like that where maybe you're not actually offering 401k to these folks and they don't qualify for it

[00:36:53] so that there's other issue there's things there I mean I guess that doesn't speak to why they

[00:36:58] wouldn't contribute but yeah I mean ignorance honestly that's it from and ignorant doesn't mean

[00:37:05] stupid ignorance is like you don't know that it's good for you you don't know you know

[00:37:11] that the company has it or whatever so or you just broke like when you live in paycheck to pay

[00:37:16] check yes tough to actively go reduce your paycheck your net income and free tax are not

[00:37:26] you're not thinking about that right it's just yeah as we near the end of this episode we like

[00:37:32] to extend our heartfelt gratitude to you for listening before we sign off here are a couple quick

[00:37:38] things don't forget to follow it's about payroll all LinkedIn and it's about your paycheck on Facebook

[00:37:44] and TikTok we love engaging with our audience and you'll be able to receive exclusive updates and

[00:37:50] behind the scenes content thank you for being a part of our payroll community and thank you

[00:37:55] for being a part of this journey with us until next time keep learning keep growing and most

[00:38:01] importantly keep going so I think that's a great segue into our safe talk and we got two for you

[00:38:10] yeah yeah so yeah so yeah sure okay we we try to talk about something that is I don't know

[00:38:21] it's just little that might be uncomfortable or so it's like we should create a safe place

[00:38:26] that we could talk about these things no judgment no nothing and the first question is do you believe

[00:38:31] that 401k plans are sufficient for retirement savings or should there be some additional government

[00:38:36] mandated retirement benefits to ensure financial security for all employees well there there there

[00:38:44] is it's called social security but so security is often rumored to be not enough for us and there's a

[00:38:53] whole controversy around social security because I know when I retire if I don't get my social security

[00:38:58] I'm going it's gonna be I'm not in the state on air on on this what I would how mad I would be

[00:39:07] you know what I mean because that's my money they're taking our money and holding it for us right

[00:39:12] if we could probably do a whole I mean I think we did talk about social security one of the first five

[00:39:18] shows we did yeah and just to recap it social security is like a retirement savings account for us right

[00:39:25] and and yes I know we did so and if you don't know folks if you go to the social security website

[00:39:33] you can create an account and log in and look at your account and look at your money

[00:39:38] and look at how much is there now and it also tells you it also tells you like what your projected payout

[00:39:45] is and I think I think they do it a few ways like okay if you retired now this is what you would get

[00:39:51] you know if you retire when your retirement age comes this is what you're projected to get

[00:39:56] stuff like that so don't feel like all this social security where's my money you can go and look

[00:40:01] okay but I'll know social security and look at yep ssa.gov ssa.gov yep so that is the mandated

[00:40:11] retirement benefit plan but that shouldn't be all you get right you should also invest somehow

[00:40:18] right that keep diversifying so that's one that's mandated but it's also only if you're a W2

[00:40:24] if you're a gig worker right now you're when you file 1099 at the end of the end of the year they do

[00:40:32] I believe you still contribute to it but it may not be in a you know as much as you would

[00:40:39] right because as 1099s we get to write a lot off and you know then you end up contributing a lot

[00:40:44] less than you would have because of your expenses so you know factor that in think that out

[00:40:51] beyond that is it is it is it is it sufficient for retirement alone no you need to diversify

[00:40:57] you need social security you need 401k you need something else you know safe basic savings you know

[00:41:03] if you're not a risk taker if you are invest in the market on your own for like through a Robinhood

[00:41:08] type of account let me ask you this before we go to the second question that we have because we're

[00:41:13] doing doing a two for today to end the second the leap year of yes so we're doing two a two for

[00:41:21] today right and it's the leap year yeah so yeah so do you think I'm gonna change the question here

[00:41:30] a little bit do you think that the government is doing enough with social security or should there be

[00:41:38] more to that like that the government puts away like should the government say like hey good question we're

[00:41:46] gonna match what you put away

[00:41:55] you know the yeah there is an employer match to the social security and that you know I'm

[00:41:59] Medicare but uh you know I don't know and it's arguable man you know I don't know because we get

[00:42:05] to politics and what the government should and shouldn't be doing for us you know the conversation

[00:42:09] around social security kind of is like oh it should be privatized it should be kind of like a 401k thing

[00:42:16] where we can pick where that money is going and how it's being invested instead of the government

[00:42:21] really makes the choice right and they they're they're using it yeah and I don't know man it's a good

[00:42:27] it's a it's a there's a good questions and good things to think about because it

[00:42:32] there is no right or wrong answer what do you think so I think that the government could definitely

[00:42:40] do more especially since all the taxes and stuff that people pay like it may be it may be

[00:42:48] prudent like so imagine if you had the option when you fire taxes instead of getting your refund

[00:42:54] you can put that towards your retirement or you can something like adding some incentive you

[00:42:59] could do what you want with it right if you get your money get it back or whatever right but

[00:43:04] you know instead of it going through that loophole government sends me the money and then I have

[00:43:08] to go and invest it in here and it might be fees with it or whatever I don't know how that would be

[00:43:13] but maybe something something different yes I think the government could do a little bit more

[00:43:18] to take care of the American people yes now do I have an answer for what that is no I don't

[00:43:24] I don't yeah it could look so many different ways yeah yeah agree so the second question

[00:43:31] take us to the second one is it discriminatory for companies to exclude part time and contract

[00:43:39] workers because Brian was just speaking about contract workers 1099 from participating in their

[00:43:44] 401k plans and should there be regulations to address this issue what do you think oh okay

[00:43:53] so I think I think that they should be able to do I think it's discriminatory I think that's

[00:44:02] I don't think it is I think there's just the way the rules have been made yeah you right so

[00:44:07] I'll tell you why too but I want you know but but I think that we could do more to offer them a

[00:44:14] different maybe a different kind of solution for those kinds of workers right so maybe we could

[00:44:20] have something that works a different way for them but I don't think it's discriminatory no

[00:44:26] what about you yeah it's not discriminatory and the reason why we exclude part time and contract

[00:44:35] workers is because of the the the timing of them all and it's in it's how can I say the temporary

[00:44:44] nests of it meaning 401k is a long time solution is a long term solution your part-time employees

[00:44:53] and your contract workers are usually short lives they're not they're long right unless you're

[00:44:59] salaried part time and you know you have some type of thing like that but and in which case you

[00:45:05] probably would be eligible some plans do make part-timers eligible not not all plans exclude part-timers

[00:45:12] so you know but when the plans exclude them it's because of that it's because you're probably not

[00:45:19] going to be here long you know think think like a part-time college student working at a retail outlet

[00:45:25] during the Christmas break and during the summers like they're they're not there consistently enough

[00:45:30] to contribute and to actually make impact they should have a product on their own to your point

[00:45:35] I like that idea like oh we should guide them into something else but guiding it should be

[00:45:40] something that they can maintain on their own outside of the job like outside of there because

[00:45:45] think because remember this 401k the doctions are happening through payroll right there's deducting

[00:45:50] out of your paycheck and they're funding your so if you're not getting a paycheck then you're not

[00:45:55] funding you know what I mean but I like that idea is like maybe maybe that you know we can

[00:46:01] companies can partner with a with a financial institution to say hey I'm going to push all my

[00:46:06] gig workers and my part-time workers to your product so that they can invest and save

[00:46:11] and maybe give them give them some type of deal like oh wait because they came through us and

[00:46:15] because they were our employee hey here's like a that's a great idea man here's like uh uh

[00:46:21] something to get you started because oh I worked with this company in the summer and they gave

[00:46:26] me a hundred dollars in my 401k account or my IRA account to get me started and every summer I

[00:46:33] get a hundred bucks in that account and something like that where it's not coming through the paycheck

[00:46:38] it just funds you fund it on behalf great idea well look at that wall is just save financial stuff

[00:46:46] like that's a that's a no that's a really good idea so any who so that's why it's not

[00:46:51] discriminatory because they're not saying or you're back you know you're you're whatever you're

[00:46:57] different you can't do this they're just saying look you're not going to be here long enough

[00:47:01] to actually make an impact you should go and do it on your own right and IRA or something so yeah

[00:47:07] it's it's it's not discriminatory and some companies do include all people all folk all type of

[00:47:13] employees it just depends you know at the end of the day for me it's empower yourself invest in

[00:47:21] yourself and you know we got into a debate one time about oh was education I got worked up one day

[00:47:30] about education and he's like well some people can't afford it probably and I was like no you

[00:47:35] can't afford not to right you can't afford not because we were talking about spending I think it

[00:47:40] was on this show right we were talking about spending habits and we were talking about how people

[00:47:46] you know spend and and the different and we should we should kind of do that periodically talk

[00:47:50] about what what people are spending money on like right that would be a good stat for for this show

[00:47:56] is to constantly talk about what people are spending their money on and then and that's where I got

[00:48:01] I came back at them and I was like well no because you're spent what it would it was like something

[00:48:06] like retail or clothing or some crowd entertainment I was like all they all entertainment all you got

[00:48:13] to do is spend less on that and more on self improvement and I'm not saying it has to be college

[00:48:21] I'm going on a tangent now because now I want to talk about it again I'm not saying it's a college

[00:48:25] or it has to be these things right because think about it look at look at LinkedIn who it used to

[00:48:32] be Linda.com and that's a great story by the way to go see how Linda.com started LinkedIn bought

[00:48:38] Linda.com and and it was bait and now LinkedIn learning is it but for 20 30 bucks a month you have

[00:48:45] access to thousands of classes thousands of courses that you can improve your skill set for

[00:48:53] and I bet there's AI things right now right machine learning and AI stuff that is that's there

[00:48:59] right now so any who my point is we can't afford not to keep self improving we can't afford

[00:49:07] not to save and invest in our futures so I'll leave you at I'll leave this leave it at that right

[00:49:13] we can't afford not to do these things we have to make that a priority yep that's why we do this

[00:49:19] show right it's so important to us that we're like hey it's about your paycheck and you know this is

[00:49:25] the first step in financial wellness and you're only stopped for employee information so keep coming

[00:49:30] back keep listening keep growing with us keep learning with us if there's some stuff that you want

[00:49:35] to share because let us know reach out we're on LinkedIn it's about your payroll it's about payroll

[00:49:41] I know now I get the two shows confused it's about payroll is the LinkedIn page you can you can

[00:49:47] reach out to us we're on Facebook for it's about your paycheck reach out reach out what do you guys

[00:49:52] want to talk about what do you want to learn about and we'll bring it to the show yep let's do it

[00:49:57] man and I'm closing remarks sir yeah be sure to sign up for your social security information go

[00:50:04] to ssa.gov make sure that you do that it's gonna show you different things they're being transparent

[00:50:11] like I just went on mine now and it says my full monthly benefit will be at the retirement

[00:50:17] age of 67 but it also pushes it to my 70 my age 70 and it says something about delayed

[00:50:28] there so that's interesting so you might want to educate yourself on social security so

[00:50:35] who knows what that means so it's a fun fact

[00:50:37] and when you look there there's a minimum age too right that would that you can start taking it out

[00:50:45] but you like right like my mom when my mom retired she's like oh if I wait three more years I can

[00:50:51] get two hundred dollars or a hundred dollars more and I was like nah the hell with that retire now

[00:50:56] be done she was already she was a nurse 47 years like be done you're done you know so there's a

[00:51:03] trade-off yeah but again the point is you can go and see your account folks like I don't

[00:51:07] I don't think a lot I don't think enough people know that no thank you all right folks be sure

[00:51:15] to tune in next week to the next time we're gonna drop in a true payroll crime story hospital there

[00:51:22] was a cyber attack of some hospitals so make sure you tune in next week we're gonna talk about that

[00:51:26] absolutely good one looking forward to that thank you folks we love you peace