David Moir/Reuters
FA Insights is a daily newsletter from Business Insider that delivers the top news and commentary for financial advisors.
There are a bunch of ways companies can mess up 401(k) plans (InvestmentNews)
“There are a lot of people poking around the 401(k) world administering plans who really don’t know what they’re doing,” Anthony Domino, Jr., managing principal at Associated Benefit Consultants told InvestmentNews.
In fact, plan advisers shared a few common operational mistakes in 401(k) plans including: late deposits of employee contributions, failure to update safe harbor notice annually, not adhering to annual salary compensation limits, deficient loan servicing, and failure to file a timely Form 5500.
A powerful chart shows how big of a difference it makes when investors start saving early (Business Insider)
"In its 2016 Guide to Retirement, JPMorgan Asset Management included a powerful illustration of how compounding returns lead to huge differences between investors who start out young and those who wait until later in their careers before seriously saving," reports Business Insider's Andy Kiersz.
The chart below shows outcomes for four hypothetical investors who invest $10,000 per year at a 6.5% annual rate of return over different periods of their lives. "Chloe," who invested over her entire career, ends up retiring with nearly $1.9 million.
David Moir/Reuters
Muni bonds aren't totally tax free (Charles Schwab)
"Although municipal bonds pay interest that is generally exempt from federal and state income taxes, it's not always free from all taxes," write Cooper J. Howard and Rob Williams.
As such, the duo identified seven types of taxes that could apply if you buy muni bonds: alternative minimum tax, capital gains tax, de minimis tax, state income tax, increase in taxation of Social Security benefits, increase in Medicare premiums, taxable municipal bonds.
4 things pre-retirees can do to plan for a healthy retirement (ThinkAdvisor)
Health care is one of the hardest things to plan when it comes to retirement. But ThinkAdvisor's Danielle Andrus identified four things that retirees can do to prepare: 1) start saving early, 2) build healthy habits such as getting regular check-ups, staying active, and eating well, 3) plan for a longer retirement, 4) consider how needs may change going forward.
Millennials are less bad than you think (Reuters)
A new survey released by Sallie Mae on how college students manage their finances found that 77% are paying their bills on time, and 73% are doing this on their own, reports Beth Pinsker. Additionally, over half save money every month.
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