Summer 2014 Newsletter: 401(k) and IRA Rule Changes

2014 Summer Newsletter (Download PDF)

As the top 401(k) consultants in Columbus, Ohio, Beacon Hill Investment Advisory offers quarterly updates packed with up-to-date information to keep you–and your retirement–on track. Below are the top insights for the summer.

The Markets

After a rocky start, the quarter eventually made up for domestic equities’ earlier losses. As winter weather finally lost its chokehold on the U.S. economy, investors also grew increasingly comfortable with the Federal Reserve’s slow-and-steady approach to unwinding quantitative easing. As a result, they were willing to take on risk again, handing the Dow and S&P their 11th and 22nd all-time record closes of the year … (Read more).

Quarterly Economic Perspective

• The end of winter weather brought greater relief than usual this spring, especially after gross domestic product was shown to have contracted strongly in Q1.
• The U.S. economy finally regained all of the jobs lost since the recession officially began in late 2007, and total employment was higher than when it previously peaked in January 2008.Have The Rules for 401(k) In-Plan Roth Conversions Changed?
• By the end of the quarter, the housing market had begun to rebound from its winter slowdown as more homes came onto the market.
• U.S. manufacturing also showed signs of strength. Industrial production rose for three months out of four, according to the Federal Reserve.
• By quarter’s end, consumer inflation had risen at the fastest monthly pace (0.4%) in more than a year.
• The Federal Reserve’s monetary policy committee continued to unwind its economic support by cutting $10 billion worth of bond purchases each month.
• To stimulate lending, the European Central Bank’s key interest rate was cut to -.01%; it’s now essentially charging banks to hold their funds rather than paying interest on deposits.
• The Chinese economy showed signs of slowing. (Read more)

Eye on the Month Ahead

The Fed will be watching the housing market this summer as it considers the timing of future interest rate increases. Also, the second week of July marks the unofficial start of the Q2 corporate earnings season. After the dismal Q1 GDP final reading, those reports may assume even greater significance than usual, as will the Bureau of Economic Analysis’s initial estimate of Q2 economic growth.Have The Rules for 401(k) In-Plan Roth Conversions Changed?

Have The Rules for 401(k) In-Plan Roth Conversions Changed?

Thanks to the American Taxpayer Relief Act of 2012, the rules for making 401(k) in-plan Roth conversions have gotten substantially easier … (Read more)

Is There A New One-Rollover-Per-Year Rule for IRAs?

The IRS has adopted a stricter interpretation of the one-rollover-per-year rule, starting in 2015 … (Read more)

Thousands of 401(k)s Fail Nondiscrimination Test

Nearly 60,000 401(k) plans failed their most recent nondiscrimination tests, according to research by Judy Diamond Associates … (Read more)

12 common 401(k) compliance errors

According to the IRS, the most common errors in connection with qualified plans, and specifically a 401(k) defined contribution plan … (Read more)