News

Why the Future is Now Brighter for Small-Balance Retirement Accounts

RCH's Tom Hawkins, writing in 401k Specialist, describes the "brighter future" emerging for small-balance retirement savings accounts. Hawkins maintains that these accounts, which he associates with an increased incidence of sub-optimal participant outcomes, will fare much better in the future due to "large-scale, industry-led action on auto portability, and more recently, proactive steps being taken by leading providers to consolidate legacy small-balance IRAs."

Previously featured in RCH's Consolidation Corner

Addressing Cash-Outs May Help Improve Retirement Readiness

Writing in 401kTV.com, Fred Barstein, Founder & Editor-in-Chief, cites a recent Employee Benefit News opinion piece authored by RCH President & CEO Spencer Williams. Barstein writes that Williams' article "spotlight[s] recent research from the Sauder School of Business that found that 41.4% of employees chose to cash out their 401(k) accounts when they left their employers" while adding that "auto-portability is a viable solution to improve retirement readiness in America and help retain assets in the nation’s retirement system." Barstein closes by imploring employers to "consider auto-portability options to make it easier for employees to take their 401(k) accounts with them when switching jobs."

Increasing Retirement Security with Neal Ringquist and Spencer Williams

In their ongoing WealthTech on Deck podcast, LifeYield's Jack Sharry interviews RCH's Spencer Williams, President and CEO, and Neal Ringquist, Chief Revenue Officer, about increasing retirement security and ensuring that previous 401K plan balances don’t get left behind. Sharry's interview focuses on auto portability, which he characterizes as "a convenient choice for both employees and advisors because it preserves retirement savings automatically." In the episode, Williams and Ringquist address how auto portability benefits retirees and advisors alike, the four major hurdles of auto portability, and the future of preserving retirement savings.

The Impact Of SECURE 2.0 On Americans’ Retirement Readiness

Writing in Private Wealth Magazine, noted private wealth expert Russ Alan Prince interviews Neal Ringquist, RCH's EVP and Chief Revenue Officer, about which SECURE 2.0 provisions Ringquist feels will impact retirement savings most, and what advice advisors should give their clients regarding these provisions. In the interview, Ringquist draws attention to SECURE 2.0 provisions that codify auto portability, as well as the related provision that increases the limit on 401(k) account balances that can be automatically cashed out by sponsors and recordkeepers and transferred to default IRAs, from $5,000 to $7,000. Ringquist offers Prince a compelling primer on why these provisions will reduce cashout leakage, benefitting plan sponsors, participants and the advisors who serve them.

Factors to Consider Before Cashing Out a 401(k)

Rachel Hartman, writing for U.S. News, examines the options when participants are faced with a job loss with a 401(k) through a previous employer. Individuals often consider cashing it out; however, careful evaluation is essential before making this decision. Hartman quotes RCH's Spencer Pringle on how cashing out has financial consequences. Exploring other ways to access cash and using only the required portion of the 401(k) balance for emergencies while keeping the rest invested should be considered. Seeking advice from a financial advisor is advisable to make well-informed choices.

Vanguard, Retirement Clearinghouse Set Sights on IRAs

Napa Net's Ted Godbout covers the announcement of Vanguard and Retirement Clearinghouse (RCH) expanding their collaboration to include services for individual retirement account (IRA) holders. The aim is to reconnect IRA holders with forgotten or lost retirement funds, especially those left behind when employees change jobs, to preserve and maximize their assets. The initiative builds on their existing relationship, which was focused on an auto-portability service for 401(k) plans. By extending the partnership to forgotten IRA accounts, both companies aim to improve retirement outcomes for under-saved and underserved participants by consolidating stranded or forgotten accounts.

The new urgency for mitigating 401(k) account cash-outs

Findings in a recent study by the Sauder School of Business at the University of British Columbia (UBC) underscore that, despite all of the media articles offering tips for how to save more for retirement, many Americans still make the self-destructive decision to cash out their savings following a job separation. RCH’s Spencer Williams, writing in Employee Benefit News, reminds readers that “there are solutions in place for 401(k) plan sponsors and recordkeepers to help participants avoid the all-too-easy decision to cash out their savings” including auto portability, which is also supported by substantial research demonstrating its efficacy in preventing cashout leakage.

Vanguard Expands Retirement Clearinghouse Eligibility to IRA Account Holders

Writing in PlanAdviser, Alex Ortolani reports on Vanguard's expanded partnership with Retirement Clearinghouse to include services for their individual retirement account (IRA) holders. This collaboration aims to reconnect IRA holders with forgotten or lost retirement savings that may have occurred during job changes. The expanded partnership will involve transferring lost IRA accounts to Retirement Clearinghouse, helping account holders preserve their retirement assets.