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Retirement Roundup | April 2019

April 2, 2019

Retirement Roundup | April 2019

True North Retirement Advisors retirement roundup

Articles and ideas to help you live a fulfilled and financially secure retirement! 

In this month’s Retirement Roundup, we’ve curated our favorite articles from around the web to help you live a fulfilled and financially secure retirement!

We start off with an article about a workaround which allows high income earners in pass-through service businesses to still qualify for the 20% tax deduction – contributing to a Cash Balance Plan. Contribution limits for Cash Balance Plans are high, allowing contributions of around $200,000 in 2019 for those in their late 50s and above $300,000 for those in their late 60s.

Then, we switch gears to a new finding which points to social media as a potential culprit for why Americans aren’t saving enough. Changes in the media landscape have made other people’s spending more visible than ever. That, in turn, is making all of us spend even more — and save even less.

Keeping with the topic of social media, we look at the recent announcement of Pinterest’s IPO, which is expected to start trading on the New York Stock Exchange in April. Pinterest is just one of many well-known companies expected to go public this year, and we look at what that might mean for investors.

Next, we examine Facebook’s most recent privacy blunder in a long list of privacy issues plaguing the company over the last year – the discovery that Facebook has been storing millions of user passwords in plain text! We discuss what you should do to protect yourself and your password.

Lastly, we look at the worst mistake that Americans make that compromises their online security – using a password in more than one place online. 82% of us are guilty of doing this! Since remembering dozens of online passwords is nearly impossible, we show you a practical way to create unique passwords for each website you use…and remember them all!

Enjoy this month’s installment of the Retirement Roundup!

Rich Professionals Are Using Pension Plans as a Tax Dodge

(Ben Steverman | Bloomberg)

Defined benefit plans – particularly Cash Balance plans – provide a huge opportunity for service businesses whose income are too high to qualify for the 20% deduction under the new Tax Cuts and Jobs Act.

Many businesses now enjoy lower tax rates under the TCJA – unless you are a specific pass-through service business that doesn’t qualify.

Doctors, lawyers, consultants, and other service providers with high incomes can use a Cash Balance plan to “stash hundreds of thousands of dollars in income a year. By doing so, they’ll get around the income limits Congress created to bar them from a generous new tax break for owners of pass-through entities, who report the firms’ income on their individual tax returns,” according to the article.

Contribution limits in Cash Balance plans are high, allowing contributions of around $200,000 in 2019 for those in their late 50s and above $300,000 for those in their late 60s. The contributions inside of the Cash Balance plan can be rolled over to an IRA at retirement, and every dollar that is contributed to the plan reduces business income in that year, potentially allowing high income service professionals to qualify for the 20% tax rate, rather than their higher personal tax rate.

We have been advocates of Cash Balance plans for many years. If you want to know if a Cash Balance plan makes sense for your business, email With a basic employee census file, we can run the numbers to help you understand if a Cash Balance plan is a good fit.

Your friends’ social media posts are making you spend more money, researchers say

(Christopher Ingraham | The Washington Post)

Even though savings rates have increased from 3% to 7% since the Great Recession, savings rates are still too low among most Americans. New research suggests the explanation for our lower savings rate is partly psychological.

“At its heart lies a simple observation: Personal spending is a lot more visible to others than no spending. Changes in the media landscape have made other people’s spending more visible than ever. That, in turn, is making all of us spend even more — and save even less,” according to the article.

A quick glance at your Facebook news feed shows friends jet setting, eating out at expensive restaurants, and remodeling their kitchen.

Since many of us post our life highlights on social media in favor of the mundane day-to-day, it distorts our view that everyone is always having a great time….and spending a lot of money doing it!

The rise of visibility of our consumption through social media has increased our frame of reference exponentially. No more do we observe a neighbor’s new boat in the driveway or hear about a friend’s exotic vacation only occasionally. We are exposed to hundreds of these spending sprees every day on social media.

“The net effect of this saturation of consumptive media is that we’re bombarded every day with signals to consume, consume, consume — and that’s before you even stop to consider the rise of an entire industry, advertising, devoted to parting consumers from their money.”

It’s no surprise that increased visibility of the spending of others has subtly increased our own spending. To reduce the temptation to overspend, it may help to pay close attention to the subtle consumption messages you receive on social media, and to take steps to prevent the “comparison trap” from influencing your spending decisions.

Pinterest’s IPO filing: 5 things investors should know

(Therese Poletti | MarketWatch)

On March 23rd, Pinterest filed the first round of its much-anticipated initial public offering documents. The company is expected to go public in April, adding to the list of a number of other highly-anticipated IPOs in 2019, including Levi’s, Uber, Lyft, Airbnb, Slack, Zoom, and WeWork.

The stock will trade under the symbol “PINS”.

If you don’t understand what Pinterest does, just go ask your wife or daughter. Pinterest users are 2/3 women, and Pinners (as Pinterest calls them) use Pinterest for inspiration for everything from recipes to craft ideas to wine tasting outfits.

Pinterest makes money by selling ads. It began selling ads in 2014 and “the company surprisingly had two profitable fourth quarters, but with two full years of losses,” according to the article.

It remains to be seen how Pinterest will perform in the market, as long-term profitability prospects are still uncertain.

Facebook password crisis – what to do? [VIDEO]

(Paul Ducklin | Naked Security)

In the latest of a stream of privacy blunders for Facebook, they just admitted to storing passwords for millions of users in “plaintext”, which means that the passwords were not encrypted and were visible to Facebook employees.

Fortunately, this password blunder hasn’t resulted in crooks making off with your password…yet.

The short video from the article linked above explains what happened and what you should do about your Facebook password:

1) Change your password

2) Enable two-factor authentication, which provides an additional layer of security by requiring you enter an additional code when you log in.

Here’s the worst mistake people make that compromises their online security

(Kari Paul | MarketWatch)

The worst mistake people make that compromise their online security is using a password in more than one place.

A survey by found that 82% of people reuse the same password for multiple websites. “Despite their lax security practices, many Americans say a data breach would be worse than a physical home break-in”, according to the survey.

Here’s why is risky behavior to use your password in more than one place: Let’s say you use the same password for your bank account, Facebook, email, and Amazon. If any one of these sites is comprised (like Facebook – see above article!) and hackers get your login credentials, they test those credentials to hack into other common sites you might be using.

So now, it’s not just your Facebook account that’s been hacked. It’s potentially any other site you use with that same password!

Good password practices will help keep you secure online, and it starts by having a strong, unique password for each site that you use.

Since you probably have 50+ passwords to keep track of, it’s a good idea to use a password manager, which allows you to securely store passwords and use a different password for each site without having to write down, duplicate, or remember your passwords.

Another way to protect yourself and your log-in credentials is to enable two-factor authentication wherever it’s available. This form of security requires users to type in a code that they retrieve from another device, like a phone, which presumably only the user has access to, to access the account.


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Ashley Micciche of True North Retirement Advisors


The views outlined in this newsletter are those of True North Retirement Advisors (TNRA) and should not be construed as individualized or personalized investment advice or tax advice. TNRA are not licensed tax consultants, please contact your CPA for advice on your specific tax situation. Any economic and/or performance information cited is historical and not indicative of future results. Economic forecasts set forth may not develop as predicted.

Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly, will be profitable, equal any corresponding indicated historical performance level(s), or be suitable for a given client or portfolio.

Investing in stocks includes numerous specific risks including the fluctuation of dividend, loss of entire principal and potential illiquidity of the investment in a declining market. Bonds are subject to market and interest rate risk if sold prior to maturity. Bond and bond mutual fund values and yields will decline as interest rates rise and bonds are subject to availability and change in price.

Any questions regarding the applicability of any specific issue discussed above should be addressed with TNRA. All information, including that used to compile charts and/or tables, is obtained from sources believed to be reliable, but TNRA has not verified its accuracy and does not guarantee its reliability.

Moreover, you should not assume that any discussion or information contained in the newsletter serves as the receipt of, or as a substitute for, personalized investment advice from TNRA or from any other investment professional. To the extent that you have any questions regarding the applicability of any specific issue discussed above to your individual situation, you are encouraged to consult with TNRA or the professional advisor of your choosing. All information, including that used to compile charts, is obtained from sources believed to be reliable, but TNRA has not verified its accuracy and does not guarantee its reliability.

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Ashley M. Micciche, CEO

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