[INTERVIEW]

Andrew Rafal: Welcome back to a brand-new episode of Your Wealth and Beyond. And we’re jumping into 2021. Seems like last year was a lifetime ago, and I am super, super excited to have on, a recurring guest, good friend, and the Director of Corporate Development over here at Bayntree, Brian Hartstein. How are you this morning?

Brian Hartstein: I’ve done well, Andrew. Thanks for having me back. I love being on, and I really enjoy this format and just talking with you about different topics.

Andrew Rafal: Wonderful. And I think today’s topic we’re going to talk about, listeners, is going to pertain to everybody, whether you’re an individual working for a company, whether you’re a business owner that runs a company, we’re going to talk today about 401(k)’s, the ins and outs, tips and strategies. And Brian, that’s been your passion for almost 30-plus years, is the retirement planning space. Why is it so important that people understand what it is that they have? And how to best take advantage of it? What are some of the things in your career that you’ve seen that people don’t do?

Brian Hartstein: Yeah, and you’re hitting something that’s near and dear to my heart, obviously, I’ve been doing this a long, long time and grew up in this industry. And one of the things that you and I both agree on so strongly is that for many people, the 401(k) account that they are building at their employer, whether it was in the past, or they’re still doing it, is going to be one of the most important assets they have when they hit retirement, along with Social Security and any other savings or assets they build, it’ll probably be the single most important account that they have.

So, we take that extremely seriously in terms of the advice and the guidance we can provide to those participants, because we know how meaningful it will be when they get there. So, we do get a variety of questions, some are common, we get them over and over again; some are more specific to a plan, but we can kind of jump into those questions or take it wherever you want to go from here.

Andrew Rafal: Yeah, because we look at the advent of the 401(k), which was in the late 70s. And prior to that, you get people in a room and most of them raise their hand, who’s got a pension? And what do you think, it was about 85% to 90% of workers would have a pension, meaning they could rely on Social Security and then, pension from their company when they left, which would be, as you know, Brian, a guaranteed income stream. So, they had that pillar, they had what we call the three-legged stool, it was really bulletproof in regards to that, but then so, Brian, what happened in the late 70s or early 80s? It started changing that and putting more of the onus on the employee to have to save for retirement more in their hands and taking the risk away from the company itself.

Brian Hartstein: Sure, and I always kid it, this is not your grandfather’s pension anymore, like you said, the day when you retired at 65, and that check showed up every week in your mailbox, every month in your mailbox from your former employer, it usually just doesn’t exist anymore. We see that in smaller companies, but that’s not the norm. And the shift was from the employers’ funding plans to putting plans in place, like 401(k)’s and profit-sharing plans were really the investment decision, the onus was now on the employees. And it was just a shift that we saw over time, for both the cost and liability standpoint, that was going to move it in that direction.

So, one of the good things, though, is that a participant can really take control of their retirement, and they can make it as meaningful as they want it to be, or they could go on autopilot. And as long as they’re following the system and following the planning, it should do for them in the end what it was meant to do, but we always want people to be proactive, because we know how important this is. And if you can take ownership of it and understand it, we believe your accounts will be much, much bigger when you get to a point when you’re ready to retire.

Andrew Rafal: Okay, so 401(k)’s, most individuals and companies that they work for, most of them have some type of 401(k). So, one thing that you see these employees, maybe the biggest concern that you see, or some of the things that you see that maybe we can help teach the listener out there, kind of the basic, what are you seeing out there?

Brian Hartstein: Yeah, and it’s interesting, because obviously, when people move employers, you move their retirement plans, and retirement plans are all structured a little bit differently, because they’re built for that specific company or that corporate culture. So, many times, people go from plan to plan, and they confuse the specifics and the provisions of the plans, and maybe not even understand them really well. And I always go back to basics, I said you have to understand the provisions of your plan.

If you’re already eligible, you don’t need to understand eligibility. That usually is, how long you’re working at that company, or what age you have to be in the plan? It’s more about understanding, do you have an employer match? What is that? Is it a safe harbor plan? Is it not a safe harbor plan? Is there a vesting tied to maybe the profit-sharing plan piece, if you’re in a plan that does that? So, understanding your options and your basic plan provisions, I think, is mission critical and the first thing anybody needs to do when they’re eligible to be in a plan.

Andrew Rafal: Alright, so let’s talk about that match, because this is where we see the big mistake of people giving away free money. So, walk through a listener of what they should be thinking of when they hear the match and what they should be doing, if at all possible, trying to put away so they don’t lose that benefit.

Brian Hartstein: Sure, and most employers, you will find, and then COVID kind of threw things for a loop, but most employers still have an employer match. And as you and I both know, to us, that’s free money, meaning, let’s say, if you had a match that for every dollar you put into a plan from your own pay, your employer is going to match a dollar as well, up to 3% of your pay. So, if you were a $40,000-a-year employee, and you put 3% away, your employer is literally going to put $1200 a year into your plan without you doing anything. And that’s a 100% rate of return from day one without even investing.

So, we always say, understand what the matches, and if you can, put in at least as much as it takes to get your free money. We don’t see free money, keep it out too often. I like to take it with both hands when I see it.

Andrew Rafal: Why do you think people don’t utilize it? It’s just they don’t understand it, or they think that they’re not going to be able to get by on a monthly basis, if they don’t have that extra 3% or 4% or 5% that they’re putting away.

Brian Hartstein: I think that’s exactly at number one, if they haven’t used one in the past that they’re assuming there’s going to be a little bit of pain, because if I defer my own pay in my 401(k) account, I get a little bit less. So, it’s a little bit less, they might have to spend maybe going out on a Friday night, or for whatever else they want to spend their discretionary income on. However, there are some people that need every dollar they have to just support their family and run their personal life. And so, we understand that too.

But many times, it’s just that I don’t want to give up a little bit now, for something, I don’t know what it’s going to be later, but you’re just leaving so much on the table when you do that. We just feel so short sighted, unless you’re financially in a position where you just can’t afford it.

Andrew Rafal: Right. And that’s what we try to teach our clients, and a lot of clients who’ve come to us over the years, they may be in their early 60s now, and they have well over seven figures in their 401(k) or IRA accounts collectively. And a lot of them never made more than 100,000 in their working career, but it’s that key of every single month, every single year, they were putting away, they were prudent. And when you have the ability to put money away, get a tax deduction, hopefully get a company match, and buying in, and this is what we’ll talk about a little bit later, but buying in during every pay period, all of a sudden, two years, five years, seven years goes by, and it’s like, Wow, I’ve built this up and I’ve got this kind of money in there.

So, it’s that paint drying type of philosophy, which is especially in these last six months or so, I think it’s harder because a lot of these younger individuals are looking at just recently GameStop and AMC, it’s like I want to double and triple my money, but that’s not how real wealth is made. Real wealth is boring, and that’s what 401(k)’s are great at, just being boring.

Brian Hartstein: Yeah, well, yes, my wife, she might agree, because I love 401(k) so much, I might be boring as well.

Andrew Rafal: Well, that’s a whole nother conversation. I’m sure Tina’s not listening.

Brian Hartstein: I hope not, but I agree. And I think, one of the things that makes us a little different, because, hey, investments are inciting, we want to talk about investments, but to us, the investments are almost the secondary part of it. It’s the boring part that you just said, it’s the consistency and the planning which will make you successful. In the end, you could probably choose the worst investments inside your 401(k0 plan. And as long as you’re consistent, and you follow the planning to a tee, you would still be successful and have a tremendous amount of assets in your 401(k) account.

Andrew Rafal: And so, this tax deduction that a lot of people hear about, and part of what I jump into is what that means, and now with the advent of the Roth 401(k) option, which most plans have that in there, what should we be looking at? And let’s first go through, so this traditional way, the 401(k) I put money in, I get a tax deduction. What does that mean to me, as the individual at the end of the year?

Brian Hartstein: Sure. And I’d say, one of the areas we get the most questions on our plans that offer the Roth option, so participants call us and they say, hey, should I be contributing to the traditional or to the Roth? And sometimes, you have to understand their whole family planning, maybe they have a spouse that’s working, and they have those options, too. So, you try to coordinate together, but traditionally, the 401(k), if you’re using what we know as the traditional 401(k) side, you put a dollar in, it’s not taxed, it’s exempt from taxes at the state and the federal level.

So, you get to invest Uncle Sam’s money from day one, meaning if you start out with investing in euro, you have a dollar in your account, and I had to pay taxes and I have 71 cents. At the end of the year, who’s probably going to have more? It’s going to be you, you started with more. So, you get Uncle Sam’s money, that’s your tax deduction. You don’t pay taxes on the dollar that goes into the plan, and it grows tax deferred, meaning if we make a dollar in your 401(k) account, you don’t pay taxes on it either. You only pay taxes when the monies eventually, they’re coming out of a plan, or maybe they’re sitting in your IRA rollover account many years down the road, that’s when it’s taxed. So, you get two great tax advantages, not paying taxes today and tax deferral while the monies grow.

Andrew Rafal: Got it. And when we look at today’s environment, I think what you hit on just a little bit ago, is that every situation is a little bit different. When somebody comes to us and says, “Hey, should I put it in the traditional or the Roth portion,” we can’t just blink it out and say, “You should do this.” It is not even based on your age, we have to look at the fundamentals of, yes, your age is important but your overall income. What do you have, if you’re married? Is your spouse earning money? What state do you live in? Do a lot of people have this 1099 income?

So, taking a whole comprehensive look at the income, and then being able to identify and working with them, and potentially if they’re a client of Bayntree, the CPA to try to formulate a plan, so that we’re taking advantage of where taxes are today and where we think they’re going to be in the future. So, for instance, for me, even though I can’t put into a Roth IRA because of the income limits, part of our plan does allow for Roth contributions. So, I put 50% into the traditional, so I get a tax deduction, and I put 50% to the Roth.

Now that Roth, I got a little bit of pain now, because I got to pay taxes on that money that I normally, as you said, Brian, you wouldn’t have it, it’d be deducted, but now that money inside of the Roth portion is growing tax deferred, hopefully. And then down the road, we’ll never be taxed. No matter where rates are, no matter what the government does, in regards to making you take out of your IRA for required minimums, the Roth is the one of the better instruments when it comes to deferring and then having the income. So again, every situation is different. And I think it’s important and prudent for you to know what your options are, and then how to best build that into your plan.

Brian Hartstein: Right, and you hear a lot, and obviously, we love the Roth option. We think most people are going to have more assets in that pre-tax bucket than the Roth, and we are always trying to get people to build out that Roth bucket, because who knows what tax rates are going to be like in the future, but you get this general rule of thumb, that, hey, if you’re younger, you should be using the Roth. And a lot of times that applies, but like you said, you have to apply the planning, because you might have two younger people who are married with no kids in a very high tax bracket, and maybe some traditional does make sense for tax relief, maybe it doesn’t.

I always say the bottom line of any planning is whether you’re sleeping well at night. And so, if you are up stressing that you pick the wrong one doesn’t really matter what your age is, we need to go back and revisit the fundamentals of your planning and make sure whatever you’re doing emotionally, you can stand or you’re on board with so that you understand you have a great plan going forward.

Andrew Rafal: Wonderful. And I think, because we live in the weeds in this industry, and I remember back before I jumped into the financial services space back all the way in ’02, ’03, when I was working for a company that offered a 401(k), to me, it was like a foreign language, and that’s even with being a marketing and finance major, it just wasn’t what I lived in the weeds on, I wasn’t trading and things like that. So, part of these potential mistakes we see, is that people don’t really understand, not only what the plan is, but then, now it comes to, okay, I’ve got the plan, I’m going to get the free money. Now, what do I do? What do I invest it in?

I’ve got 30 different funds, and I don’t know what to do, because I don’t have an advisor, and this isn’t what I live and breathe. So, what can somebody at that end do? And then, let’s talk about a more knowledgeable investor and what they can potentially do, especially if a plan has a financial advisory team attached to it? Where does that come into play? So, let’s just talk about the basics, and then what somebody can look at if the company is tied in with a firm that’s there to help educate and provide the guidance.

Brian Hartstein: Sure. Those are two great areas really to focus on, because that’s where I think I see the biggest need for people to really dive in and understand what services are offered when they’re a participant in a 401(k), because every plan is different, but there are so many different things from either an educational level, a support level, or even some actually even offer, maybe the ability to get a will drafted at no cost. So, understand what services that you’re eligible to receive at no cost just by being a participant in your 401(k) plan.

So, if you’re a person that really doesn’t understand this part of the financial world or doesn’t want to understand it, there are so many different tools that are available to help you and we just see people that they don’t ask about those, they’re not really interested in, I think they’re just walking by such great means of support and helping them to build their accounts in a really easy manner. So, understand your plan, understand what services are being offered. If you’re using an investment platform, the platform itself is going to have a host of tools that you can use at your disposal 24 hours a day.

And then, if you’ve got an advisory firm you’re working with, that’s good, and there’s some really good firms out there. Those firms are going to be able to offer either some basic financial planning, comprehensive support, looking at different things that are going to help you as an investor, whether you just need a little help or you need a lot of help. The good advisory firms are built to handle any type of question. And those firms are really the grease between the wheels, they’re going to understand the administrative part of your 401(k), they’re going to understand the financial part of your 401(k) and all the different moving parts. And they will be able to give even the most sophisticated investor guidance and insight that they would not been able to get before. So, understand what you have at your fingertips and try to take advantage of.

Andrew Rafal: Right, and we’ll do another show that will go through the benefits of having a firm, similar to your expertise, what we do at Bayntree, and helping the trustee of the plan, help them stay out of trouble, lower the cost, just have a team, and that’s a whole benefit package that a lot of these trustees are trying to do it on their own, or they’re trying to do it low cost, low budget, and then, all of a sudden, they’ll come to us and be like, Hey, we can’t do this anymore, but when it comes down to the stuff that you see out there, because at Bayntree, one of the things prior to COVID is that we’d go into the companies that were working with us, and we do these little either coffees or lunch and learns and help each of the individuals that they had specific questions.

So, like, when you and Chris and John, like when you’re out there, what are some of these questions, like what are you getting the most of when you’re out there trying to provide this guidance, and now doing it via webinar and virtual? What are some of those, like a couple questions that maybe you see more than not?

Brian Hartstein: Sure, and I always say this will come under what we call either retirement readiness, helping you be retirement ready, or financial wellness, helping you make sure your financial health is at a premium. And a lot of those would come with just answering questions, like you mentioned. And so, one of the things obviously, in the last year, year and a half, which has been probably the most unusual we’ve seen in my lifetime, people get nervous about their investments. They watch the markets go up and down in the spring and bounce around and then rally back, and people are afraid to make mistakes, or that FOMO, I don’t want to miss out what’s going on here.

So, we get a lot of questions about the investments. And it always comes back to us, as you know, it’s not about investing, it’s about risk tolerance and it’s about time horizon. So, you might be nervous about the market, we might want to look at making changes, but has your risk tolerance changed? Well, what does that mean? Maybe I need to do some planning or go through some of our diagnostic tools to understand what my risk tolerance is, but if it hasn’t changed, and my time horizon is still the same, I’m still planning to retire in 20 years, my investment strategy should change, it won’t matter that the market is volatile.

And the market volatility actually helps us in a 401(k) because we’re going to put money in every pay period, right? So, we’re going to buy the market when it’s high, we’re going to buy it when it’s low, but 20 years from now, we know it’s going to zigzag, but we know it’ll be higher than it is today. We’ve just time and time again. So, a lot of that comes back to all those questions from different areas will all tie back to risk tolerance and time horizon.

Andrew Rafal: Right. And we saw that in March and April, where especially with 401(k)’s, much fewer people make bad decisions, meaning there’s not as much active trading or repositioning. And so, it’s more of an autopilot. And so, by buying in as the market dips, and obviously, March and April of last year was a much quicker dip and much faster recovery than we normally have, but I think when we have a normal recession, and it’s a 12-month or 18-month, where it’s up and down, up and down, staying the course and understanding that you’re buying in if the market’s going down, you’re buying in at these lower levels, it’s going to help you sustain and maintain and then have a better rate of return than if you’re trying to jump and then you’re going into a safe position and now going more aggressive. It’s that whole Murphy’s Law in regards to retail investors always makes usually bad decisions, right? They sell at the top, and they buy at the bottom.

Brian Hartstein: Absolutely. And it goes back to what you said about being boring. When you’ve got a market cycle, let’s say it’s kind of down, or it’s not doing much for 12 to 18 months, human nature is I got to get in there, I got to tinker, I got to make sure it’s better. The answer is no, you just need to be consistent. And being consistent is boring, but being consistent is what’s going to make your account more successful, and maybe have one or two or three additional percentage points on your rate of return. That’s what makes the difference in the end. Those knee-jerk reactions to the market, hey, I’m worried, making changes right away, they’re usually going to work against you as opposed to working for you.

And the other thing is we call it chasing the curve. We see this plenty of times where somebody’s doing their planning, and then they look at what an investment fund did or an ETF did in the last year, and then said that thing returned 25%, I want to put a lot of my assets in there, when we know the next year, that fund probably won’t be returning 25%, there’s probably a good chance it’s going to be low or even negative. So, you don’t want to chase performance by looking in your rearview mirror, you want to be consistent with your plan, so we can capture that performance when it hits the next time.

Andrew Rafal: And what do you think of these target-date funds? I know you do a lot of analysis, you help build a lot of plans. What are the pros? And what are the cons of a target-date fund, and maybe first just go through real briefly, what is a target-date fund?

Brian Hartstein: Sure. And just in general, a target-date fund is built with a specific time horizon in mind, meaning if you had a target-date fund that was a 2050 Fund that is built for somebody that is going to retire in 2050, 30 years from today, approximately. And so, it’s going to obviously maybe be a little more heavy on the equity, the stock side, the individual stock side or fun side, and then as we get closer to retirement, it’s going to be slowly managed for you, usually with no additional cost to become more conservative as you get to retirement.

So, it’s kind of that autopilot role, or I always look at as like a general contractor when you’re building a house, that target-date funds your general contractor, it’s going to build your house for you, and it’s going to manage it. And quite frankly, most plans now use that as the default investment, meaning if you had money put in your account and you never chose your investment strategy, most times it’s going to default to the target-date fund that’s appropriate for you, where they match your date of birth up with a normal retirement age, let’s say of 65, and put it right in that specific retirement fund.

So, if you didn’t do anything and ignored it, your money would still be going to work and being managed for you in an appropriate manner. So, we love them, for people that either want to go on autopilot, or maybe just aren’t quite sure themselves yet, they’ve got their feet wet in learning about investments and how to structure a plan, or don’t want to engage our help. We want to help everybody, and I think most advisory firms do, but you’re always going to have those people that maybe don’t want to reach out. So, I think they’re a wonderful tool for those that don’t want to do it yourself.

Andrew Rafal: But as you build up and you have more assets in the 401(k), having it all linked to a 2025 Fund or 2030 Fund, when we look at it, it may not be the best option in taking account, even March and April, a lot of people in the 2020, 2025 Fund, which is supposed to be more conservative than obviously, the 2030 or 2040, those took a pay hit. I think most 2025 funds, if I’m not mistaken, were down about 18% or so, 15 to 20%. So, that’s a little bit higher drawdown than one would think, if they were five years away from retirement. So, I mean, what do you think happened in those cases where, obviously, market volatility and an apocalypse-type situation? Well, how come they didn’t perform?

Brian Hartstein: It’s interesting, it’s going to depend on, there’s different companies that build target-date funds and some are built that are purely meant to be passive, meaning they might pull a fund in or out, but they’re not going to actively manage it, once they’ve put the investments in it. Then, as you know, there’s what’s called a tactical component, where some target-date funds have both passive and a tactical element, where the managers can move things in and out on a short-term basis. And so, it sometimes depends on the style of the funds that you’ve picked. We tend here to lean towards very, very low-cost target-date funds, because obviously, we think fund expense builds is an important factor in your rate of return over time, we found that those seem that perform better over time, but you will get volatility with those, meaning they’ll move up and down, like the markets will.

So, part of it is going to be how the fund family itself built their target-date fund, because not everyone is the same, they’re all structured a little bit differently, and you’ve got to look under the hood and see what it’s being built on to really understand why one maybe didn’t perform well, or really had a big drop when the market dropped and then came roaring back when the markets were back. And you have to be able to take that right, too, and that’s where it comes into that risk tolerance question.

Andrew Rafal: And I think the majority of participants in a 401(k) today probably don’t have a financial advisory relationship, a financial planning relationship, but those that do, a lot of times the advisor doesn’t really give any guidance on the 401(k). Well, number one, because they can’t manage it, and number two, just maybe they’re not getting paid on it. So, if I’m a participant and I’ve got a financial planner, what should I be ensuring it’s being done with my plan? And what are a couple questions that I could go back to my advisor and ask?

Brian Hartstein: That’s a great point to talk about. And so, obviously, there’s some great planning help that is out there. Now, understanding that a 401(k) plan, in general is an individual account plan, meaning nobody can make decisions about your account, but you, meaning if you want to execute a trade, you’re the one that’s going to execute it, when you want to look at your account, you’re the only one that can look at your account, you don’t want to give your password to somebody to make changes.

So, you’re the one that’s got to execute anything, but you can always use technology to help where your financial advisor or the advisory firm that’s servicing that plan may have the ability to see your data and say, Okay, let’s find out more about you. And once we do, we’ll help you optimize your account. And maybe we can look at it once every quarter or once a year, and we’ll make changes based on the way you feel or the other planning that we’re doing. That’s where sometimes we see the biggest shortfall is that clients plan in a vacuum, where if you’re working with somebody, I think that’s really good, they’re going to look at not only your plan, but they’re going to look at everything else you’re doing and say, okay, we want to try to incorporate what’s going on a plan with all of your other planning, so it’s all tied together.

And there’s some wonderful technology that lets you aggregate that data out there, that lets you do that. So, I think, you should absolutely show your 401(k) account to any planner you’re working with saying, number one, I want you to get your opinion on it, and two, tell me how it integrates into my overall plan. And if we haven’t looked at it before, let’s build a strategy to do that.

Andrew Rafal: Yep, that’s a great point. And there’s even some advisors and some technology now that allows the advisory firm to go in, not make the actual trade, but be able to provide the fiduciary guidance, sometimes even paying for it, but then reviewing it on a quarterly or every six-month basis. We have a software that a lot in our industry uses called Riskalyze. And what that enables us to really understand is how much an individual or family, how much risk they are emotionally willing to take, then we can cross reference that with what their current plan, both 401(k) and their other assets, what the type of risk is in that portfolio, and then not just withstanding based on where the market is, but looking at where they are in regards to the life cycle of when they’re going to retire, and then potentially lowering or increasing the risk and digging into the 401(k) to see what options are available beyond just the target-date fund. So, there’s those abilities, and I think with technology, now it’s going to get more and more in line with it, so that you’re not out there listening, trying to do it all on your own.

Brian Hartstein: Yeah, and again, you’re always going to have those people that want to do it themselves, and that’s great. I always think if you can educate yourself more, if you can take control, it’s only going to help you, but even for the do-it-yourselfers in the 401(k) area, if they don’t want to go seek a financial planner’s advice or work with anybody, there are some wonderful groups out there that employ technology to maybe give a level of oversight, helping you manage your plan for a very, very low fee, a flat fee to do that, maybe even on a monthly or annual basis.

So, even for a do-it-yourselfer, if they want just a little bit of help or a little bit of oversight, there are some great companies out there that have built some technology that’s just amazing, that it doesn’t matter what plan platform you’re on, they can help you make some decisions about what structure of your investments is right for you and help you manage that over time, not just today, but maybe next year, five years, then 10 years down the road.

Andrew Rafal: And so, as we ended, I had one more thing because we see it a lot and so, a lot of people now, they switch jobs, four jobs, five jobs, six jobs. It’s just different than it was 30 years ago, part of it because there’s more loyalty because you had a pension and higher benefits to stay at that firm. So, what is somebody to do who has maybe, three or four old 401(k)’s? They don’t even know where it is, what’s it invested in? Should I roll into my new 401(k)? Or should I consolidate them, and maybe build it into a rollover IRA, where I’ll have more options and flexibility? What is your recommendation there?

Brian Hartstein: Yeah, that’s interesting. The first thing I’ll tell you is if I can go back to the 22-year-old version of myself, the first thing I would say is when I moved jobs, not to cash in that small 401(k) that I had built, and then decide it was more important to maybe try to buy a car at that time than to keep my 401(k) because number one, I lost any ground that I made by saving, and two, I paid a penalty and taxes for getting out of it. So, if at all possible, when you’re moving jobs, do not cash in that 401(k) or the money you’ve been saving that account for a variety of reasons, but it will only hurt you in the future.

And I’d also say to that person start saving more and start it earlier, if possible. The times on your side, and the compounding of dollars inside your 401(k) is amazing, but for those people that have might have moved out, me might have to go back 10 years, we get questions from people that said, Hey, I had an account with an employer 10, 15 years ago, I don’t even know where it is. So, sometimes we have to do research, or a client has to do research to find those old 401(k) accounts. Once they found them, yes, then it’s a matter of saying, “Do I aggregate them all together on my employer’s 401(k) that I’m with now?”

So, you have to understand what investments are available to you, what the expenses might be of those investments, and if there’s any limitations on things you want to do?  Or do I decide to open up an IRA rollover account my name and consolidate everything there? Number one, consolidation I think, is paramount. Don’t leave five accounts hanging out there, because number one, it’s very hard to keep track of them all and to keep track of the investments in each one, unless you’re using some really cool data aggregation tools. So, try to consolidate and then understand the plan you’re in, but then understand its limitations too, so that you can make a really good choice of saying, “Do I want to keep this outside of the plan? Or do I want to try to consolidate all together in the plan?”

There’s no cookie-cutter answer, and we take those questions on a daily basis about what to do. And some of it is to understand the facts of the people, who’s the client? What do they want to accomplish, but understanding your plan is still so paramount in trying to make that right decision?

Andrew Rafal: Right. And that’s where working with a full planning firm, firms like Bayntree, is that not only can we help you manage the IRA, that’s just one piece, it’s looking at the true advice is putting it all together, helping you build your fiscal house, we call it the Bayntree retirement roadmap. And that’s taken into account everything from the investments, but also do you have asset protection in place? Are you working with a proper CPA? Are we using things like an HSA to further deduct some of your income? HSA is a whole other topic that we can talk to. And we talked about it in the past. Do I have proper life insurance, disability insurance.

So, listeners, you need to have a plan and to do it on your own versus having a firm that really focuses on all those fundamentals. We have CFPs on staff, it’s not just about the investments. When you don’t want to be working with us, “stockbroker,” you want to be working with a planner, and then, all of that fits together, markets are going to do what they do, but overall, if we can help you save on taxes and help you make sure that if these what ifs, these horror, the what ifs that somebody gets sick or passes early, that you’re going to be protected and covered.

There’s that peace of mind, and that peace of mind planning goes so far away. So, that’s really where the passion of what we do, and the benefit of a planning firm sometimes isn’t quantified because everybody’s just like, what did you do? How did you invest it? Did you beat the market, but we want to strip that down and see all of the benefits that we can bring to the table?

So, this was helpful, Brian, awesome stuff in the 401(k)’s.  You and I can wrap for another couple hours on it, but for listeners, I think we went through a lot of good nuggets. Do you have anything before we close up today?

Brian Hartstein: I love this side of the planning space, but like you said, everything goes back to understanding your plan, and then building out your planning, your 401(k) plan, but then building out your overall plan, and just making sure that things integrate properly. So, everybody’s looking for that day when everybody wants to talk about, Hey, I made this great investment, or I really did this really well, but I think what we found over time, it’s the little wins that add up over time. So, when somebody gets to the end of their working career, what got them there and what made them successful, all those little wins, all those little things that you just talked about, which maybe don’t seem exciting or that meaningful, that’s what adds up to the big win in the end. It’s not, hey, I just did this one great thing that I can write off in the sunset.

So, I’d say don’t always focus on trying to hit that home run, focus on the little wins, the little things that are going to be adding to your bottom line over time.

Andrew Rafal: That’s sound advice. And listeners, if you do have any questions pertaining to today’s show, you just want to chat with one of our advisors. Conversations don’t cost anything, we’re here for you. You can send us an email, or just call the office, and we are here. Our email is info@bayntree.com. And stay tuned for a new episode of Your Wealth and Beyond later this month. Brian, thanks for joining us today, and we’ll have you back on real soon.

Brian Hartstein: My pleasure. Thanks for having me. Looking forward to it.

Andrew Rafal: Alright. Take care. Bye-bye.

Brian Hartstein: See you.

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