What’s the Worst that Could Happen?

 Did you hear the one about how a rollover delay could cost you $76,000?

Hard to believe? Well, there’s a reason. To get to that number, the folks at PensionBee had to make not just one, but a series of worst-case assumptions. To get to $76,000, you have to assume:

• that you are waiting for a $100,000 check…
• that you get out of the market at exactly the wrong time — a low point right before an extraordinary market surge (that you miss, of course)…
• that continues unabated while you’re “out” of the market… (cause markets only go up)
  • oh, and you’re assumed to be out of the market for EIGHT WEEKS because it’s assumed that your rollover check got lost in the mail, and you had to have it reissued (during which, of course, the markets continue to rise)...
• Oh, and THEN you take that market uptick that you missed (cause, as we all know, markets NEVER go down)...
• 
  and then assume a 7% positive return thereafter on the money you missed (with fees of just 0.85%)… compound it for 30 years (because, apparently, you requested that distribution several decades ago… and voila! That rollover delay, compounded by a series of worst-case assumptions — well, at that point, it’s just math.

Now, that’s not to say it couldn’t possibly happen — but I think we can all admit it’s exaggerated for effect (clicks, anyone). In other words, it assumes the worst that could happen.

Roll ‘Plays’

Now, in fairness, at least PensionBee was honest enough to share their assumptions (and provide some alternate outcomes that were less severe). But, speaking from experience, the rollover process still…sucks. 

I actually contemplated rolling over my 401(k) accounts two different times over the years before the “finality” of retirement pushed me past my reluctance. Granted, in the 20-odd some years since I first contemplated (and struggled with) a rollover, things have improved (more on that in a minute). That said, EVERYBODY (and we’re talking three major 401(k) providers here) insisted on cutting a physical check[i] and mailing it to me (two checks, actually — Roths are distributed separately). 

Now, I don’t know about you, but mail service no longer seems to be as reliable as it once was. And the idea of checks of that size (and probably looking like checks) being dropped off in the mail — well, it gave me pause.[ii] Oh, I was “allowed” to pay a pretty significant premium for “expedited” delivery — but though we’re talking about rates in excess of what Federal Express or UPS might charge, we weren’t talking about delivery that was truly special. 

As it turned out, the checks did arrive (and yes, I paid the premium), leaving me out of the market for about a week. Mitigating that was that my chosen IRA provider allowed me to do a mobile deposit of those checks (Yay!), so at least I was spared the dilemma (and sleepless nights) of putting those in the mail…again.[iii]

Overall, I was pleasantly surprised at how much the rollover process has improved over the past 20 years. I was able to do it all without sitting on hold for interminable periods for the “next available operator” while listening to product pitches (or bad elevator music) — without talking to a single person, in fact, much less people from different firms (sending and receiving). 

I realize there is an opportunity for fraud with wire transfers — but surely no more than with the antiquated process of physically producing and dropping off checks with the United States Postal Service. And, honestly, what’s being charged for “expedited” processing (and with separate charges for Roth and non-Roth accounts) struck me as — well, excessive — certainly for what it seemed to provide (one hates to think of the non-special alternative).    

That said, the reality seems to be that our industry is (still) ever so much better at taking in money than in sending it “out.” Indeed, the cynic in me can’t help but wonder if that is deliberate. 

It may not be the worst that could happen. But there’s certainly room for improvement.

• Nevin E. Adams, JD

 

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[i] That is, unless you want to roll it over to THEIR IRA — in which case, electronic transfer was an option.

[ii] During this process, one of the insurance checks related to my mother’s estate — that looked like a check — was “misdelivered” to the wrong house. Fortunately, I have honest neighbors.

[iii] The New York Times recently profiled the experience of a participant that was not so fortunate — though his check got to him, it was the forwarded checks to his IRA provider that got stolen. See https://www.nytimes.com/2025/05/17/business/paychex-401k-rollover-checks.html?unlocked_article_code=1.KE8.bOS8.VimnT7OedYLF&smid=url-share

A Mother's Day Without Mom

  This weekend — for the first time in my life — I’ll spend Mother’s Day without Mom.

For most of my adult life I lived too far away for a trip home for Mother’s Day to be…practical. Not that I didn’t look for — and find — ways to connect with her during the year. But in my heart, Mother’s Day called for a special level of acknowledgement. That said, there’s an emptiness this year where that phone call should be. No need to time it around church or Sunday lunch — or the other calls she’d get.

Since her passing last December, these past months have been…rough. My siblings and I have, at various times, made trips to go through Mom’s house — she was a “gatherer” of family mementos across generations — much of which might, in other eyes, be characterized as “junk.” And yet, in going through the multitudinous boxes of photos and “stuff,” the elementary school awards (and grade cards), not to mention the cards and letters — so many letters — that we wrote to her over the years before things like Facetime, texts and emails took their place (Mom also printed a bunch of the emails) - it's provided lots of opportunities to remember and reflect. 

She was conscious of how many of her friends had, over the years, taken a bad fall from which they never quite recovered. Ironically, despite her caution, that was ultimately the event that led to her passing. I’ve noted before how — above pretty much everything else — Mom didn’t want to be a burden to her family. Not just on the financial front — though she’d been remarkably prescient in her preparations there. Somehow, miraculously, and even through COVID, a pacemaker and a heart valve, she managed to retain her independence. 

Indeed, generally speaking, women face many more challenges regarding retirement preparation than men. They live longer (and thus are likely to have longer retirements to fund), tend to have less saved for retirement (a result of lower incomes, as well as more workforce interruptions, both when children are young, and as their parents age). In addition to longer retirements, those longer lives mean that they are also more likely to have to fund what can be the catastrophic financial burden of long-term care expenses.  And then, among the unexpected expenses in retirement — as parents all know, are those related to your kids — because, even after they leave home and have kids (and expenses) of their own — they’re still your kids.

Sadly, because we know how much difference it can make in retirement savings, women are less likely to work for an employer that offers a retirement plan at work — to be part-time workers, and thus, less likely to be eligible to participate in those plans even when they do have access.

Oh, and like my mother, they tend to outlive their spouses — often by far more than the relatively modest variance in average life expectancy tables suggest. Mom lived on her own for nearly two decades without my Dad. So many times over the past several months she told me how she never thought she’d spend so many years… alone. 

So, if you’ve still got your mom with you this Mother’s Day, don’t wait. Don’t assume there’s time. Send the card. Make the call. Take the picture. Make the trip. Not just because you’ll want the memory someday — but because she deserves it now. And you’ll treasure it one day.

And if, like me, this year finds you standing in the soft ache of absence — know this: a mother’s love doesn’t leave. It lingers. It lives on in the habits she passed down, the values she taught, and in the many quiet ways she shaped the world around her — and you.

Happy Mother’s Day, Mom. I miss you.

- Nevin E. Adams, JD

Designated ‘Drivers’ — 4 Lessons Learned

 Your best laid plans can quickly go awry if your beneficiaries are clueless.

For the past several months, I’ve been dealing with the disposition of my late mother’s estate. In the overall scheme of things, it is neither large, nor particularly complex. As I’ve noted before, Mom did a solid job of not only managing her finances while alive, but in terms of making sure that I (as eldest perhaps, but more specifically as executor) was aware of the various insurance policies, retirement accounts and property. 

In that respect, she was doubtless “better” than many parents in discussing such matters before her passing (though none of that happened until after my father passed). Moreover, despite their modest means, they set up a living trust back when my Dad was with us — specifically to avoid the complexities of going through probate in an effort to make it easier for us. And prior to her passing, Mom made sure I had all the account numbers and phone numbers, and we set up online access to everything — allowing me to help her manage those accounts from afar well before her passing.

That said, and despite all that preparation — there were some “bumps” along the way. Here’s what I learned.   

Lesson #1 — Make sure that you share (or get) information about insurance, retirement and property with trusted individuals/families while you are still able.

Now, for all the headlines about dead people on Social Security rolls, they were “johnny on the spot” in notifying — well, everyone — about Mom’s death. Her pension stopped — immediately — as did access to her online insurance and retirement accounts. That is, of course, a good thing from a fraud standpoint. There are miscreants aplenty who troll death notices and look for opportunities to take advantage of those situations. That said, if I hadn’t already known what accounts Mom had set up — I wouldn’t have had a clue as to how to go about the process of closing and cashing them out.

Lesson #2 — Make sure that you know WHO the designated beneficiary(ies) are for each of the insurance, retirement and properties in question.

Now I had assumed — based on prior conversations that all of Mom’s holdings were set up in the name of the trust. And, armed with account numbers, I proceeded to file claims on that basis.[i] Mind you, everybody wants an original copy of the death certificate — and that means that you have to ship it to folks via a traditional delivery service (FedEx, UPS, USPS, etc.). And, as you might expect, they also want some evidence that you are legally positioned to act on behalf of the trust (though this they will accept electronically). This all takes time.

Then I started getting mail BACK from various entities that said the trust was NOT the beneficiary (this is all via mail, so weeks are passing). Of course, when I called to inquire who WAS the beneficiary — well, they wouldn’t tell me, as my legal status of trustee mattered not (nobody talks to anybody (else) until they get the aforementioned death certificates).

Fortunately, as it turned out, Mom had designated — probably back to the time before she had the trust established — her children as beneficiaries. Being one of those, I was then able to pivot — and got a response. They wouldn’t confirm the remainder of the beneficiaries — but knowing Mom, I was pretty sure that she had named each of us as beneficiaries (she had), and so I was able to proceed with my claim (though my siblings had to proceed “individually” with theirs). 

Lesson #3 — It doesn’t “pay” to wait.

With regard to the latter, my experience was that, despite the rapid (if not immediate) cessation of access to Mom’s accounts, the notification to beneficiaries was slow (and, as noted before, via USPS). Moreover, people tend to move over time, and so the beneficiary address that was provided back in 2006 might no longer be accurate. The claim forms, when they did arrive, were bulky, confusing and intimidating — with little reference as to which account was involved, or what kind of account it was. In sum, it would have been easy to see it as junk mail. 

It didn’t help matters that, over the years, consolidation in both the insurance and retirement industries meant that those massive forms came from companies whose name didn’t match the original source (and in two cases, they now bore the same name, but not that of the original companies). As noted above, and through no fault of these companies, the addresses on file were out of date (though one managed to find its way to a nephew of a different brother — in a completely different state — and we still have NO idea how THAT happened).

More than that, my well-educated siblings struggled to make heads or tails of the options.  In their defense, you had to wade through 12 pages of “explanation” to get to those options — and then even this industry “insider” found it to be a head-scratcher. Seriously, do the people who draft these forms have a clue what plain English looks like (p.s., annuity companies really make it hard to request a straightforward lump sum)?

Lesson #4 — You can count on customer service, but only during business hours.

Now, and without exception, everyone I spoke with at the various firms was kind, understanding and helpful — in spirit, if not in what they were allowed to tell me. Much of the claims filing (except for the death certificate) could be done online. Everything — eventually — worked out. 

But if you do have a need to talk to someone at the firms, know that dealing with these matters is something that’s hard to do during “regular” business hours (the one exception — Mom’s 403(b) retirement account!). Fortunately, my “retired” status helped, but for those still working a full-time job, note that most didn’t offer 24-hour — or even evening hours — customer support. Budget your time accordingly. 

And my thanks here to all of those customer service reps who were understanding, kind and patient.

• Nevin E. Adams, JD

Nearing the Summit

  Last year, we took some family to the nearby Great Smoky Mountains in search of a waterfall of note — one that the guidebooks said was “readily accessible.” 

That said, it took longer than we thought — we’d come up around a curve on the mountain trail, sure that it would be right there —– only to find (just) another curve. As we crossed folks coming back down from the falls, we’d (breathlessly) ask — “how much further is it?” — and while the responses were varied in terms of their accuracy and descriptive depth, they all added “it’s worth it.” 

And you know what? It was.  

Well, believe it or not, we’re nearing another kind of summit; a week from today we’ll be about halfway through the 2025 NAPA 401(k) Summit. It’s later than “normal” this year — and it’s been a long-time coming. Indeed, your Summit Steering committee has spent nearly a year putting this all together — leveraging YOUR input on topics, each has aligned themselves with a specific workshop — literally “owning” that session. That means fleshing out the focus, lining up speakers/panelists, developing a core list of key takeaways, conducting trial runs/practices, and ultimately making sure that all the materials are in on time — and that on “game day” everybody shows up and does their part.

As a result, I can pretty much promise that you won’t be able to attend every session you’d like. In fact, I’d be surprised if you don’t find yourself torn between multiple sessions all going on at the same time throughout the event. This year, we’ve even added a “technical track” for those who want to get “down and dirty” with the details!

In fact, we do approach our content a bit differently than most, I think. While it’s gotten to be pretty common for events to boast of the pedigree of their steering bodies, many —perhaps most — are essentially no more than figureheads to the actual agenda development. They’re a group to whom the folks doing the “real” work of planning, structuring and implementing the event keep updated, mostly for a sense of validation and the occasional course correct. Oh, and so that the event can “show off” the luminaries that have agreed to lend their name (and face) to promote its bona fides. Trust me — this steering committee doesn’t just steer — they row!

There are, of course, a myriad of ways to build and structure events. Note here that I haven’t said a word about our keynotes, or even NAPA After Dark (that has, in just a few short years, emerged as the pinnacle of industry networking events). But, aside from the practical information, valuable insights, vibrant networking — and yes, world-class entertainment — it’s worth remembering that among all the (other) things that set the NAPA 401(k) Summit apart — unlike every other advisor conference out there — your NAPA 401(k) Summit registration helps support the activities of NAPA — your advocacy, information and education organization — not the bottom line of some corporate media organization or some private equity firm. NAPA not only informs and educates — it literally is your voice with regulatory agencies and legislative bodies both here in the nation’s capital — and across the nation.

There’s a new administration — one whose goals and objectives with regard to retirement policy are still emerging. And while I know to some it seems we say this every year — there are real concerns about the influence that fiscal policy might have on retirement plans, the implications for Social Security funding and benefits, and legislative initiatives that (still) seek to undermine the private retirement system. 

So, if you’re one of the record 3,000+ arriving in Las Vegas next week — please lend your voice, support the ARA PAC, and get ready to leave full of energy, ideas, and a renewed fervor to make a difference.[i] 

While you’re there, please stop me (I’ll likely be running) and say “hey!” Make sure to thank the Summit Steering committee when you see them — and the ARA/NAPA conference staff as well — cause something this big doesn’t even get off the ground without a LOT of careful/thoughtful planning and on-site execution! 

I can promise you that the views from OUR Summit will be worth the trip — and when you’re back home, you’ll want to remember to share that with the folks that haven’t made it there yet! 

• Nevin E. Adams, JD

 

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[i] And if you haven’t (yet) applied to be part of the NAPA DC Fly-In Forum — well, today would be a good day to do so before it fills up as well!

Financial Literacy — A Skeptic’s Perspective

 It’s an odd thing to admit in Financial Literacy Month — but I’ve been a financial literacy skeptic. 

Not always, of course. Once upon a time I was one of those industry voices decrying the burden placed on employment-based retirement plans. Employers (and advisors) who — in the course of a 25-minute workshop — had to convey the range of concepts required to make knowledgeable investment decisions to an audience of adults who had never been exposed to any of that prior to that session. Considering all the (relatively) useless things that ARE mandated in school curriculums, some basic finance concepts seemed like a pretty reasonable “ask.”

State Steps

And though it’s been a long time coming, a number of states[i] now do require students to take a financial literacy course for high school graduation — and that number continues to climb. That said, what constitutes complying with that requirement — varies. And, if it’s like a lot of the classes I was required to take in high school, that knowledge may not last — at least according to research.[ii]

While the findings in those studies have some limitations — not the least of which is their determination of the outcomes measured, and the aggregation of a wide variety of scholarly work (and assumptions) — as someone who has long been one of those voices advocating for greater financial literacy — this has been a bit of an eye-opener. With this broadening exposure to personal finance in school, why aren’t these programs — why isn’t financial literacy — taking root in a meaningful way?

As I mentioned earlier, there are a number of classes I took in high school (and college) that I quickly dismissed as soon as the final exam was concluded — because I didn’t much like the subject (or the teacher), but often because I just didn’t get the point. Might that be the case with these personal finance offerings?

Literacy Lessons

But what IS financial literacy? At its core, financial literacy is supposed to be about understanding money — how to manage it, how to grow it, and how not to let it slip through your fingers by the 15th of the month. But in practice,[iii] it often gets reduced to a pop quiz on acronyms (IRA vs. 401(k), anyone?) and the occasional reminder to “live within your means,” as if that’s some kind of revelation.

True financial literacy isn’t about memorizing definitions or passing a multiple-choice test. It’s about giving people the tools and confidence to make informed financial decisions at every stage of life. It’s not just knowing what a mutual fund is — it’s understanding when and why you might want to invest in one. It’s not just grasping compound interest — it’s appreciating that there is a huge impact of starting to save in your 20s versus your 40s.  Math, while surely helpful, shouldn’t be required, certainly not at the outset (though I may get some pushback on that).

‘Know’ Hows

Over the years employers — aided by plan design — have done a lot to help those who lack the knowledge (or courage) to make savings decisions on their own. And, courtesy of developments like auto-enrollment, target-date funds, and more recently managed accounts, we’ve managed to help workers make better decisions, without their action, but often (always?) without their knowledge or understanding. 

But true financial literacy — or what these days gets labeled financial “wellness” — connects knowledge to action. Because here’s the uncomfortable truth: most people already know the basics. They know they shouldn’t be spending more than they earn. They know they should be saving for retirement. At some level they know high-interest debt is a trap, even if they can’t do the math. 

Look, we’ve spent decades pushing retirement savings, but if someone’s living paycheck to paycheck, telling them to max out their 401(k) may feel like a cruel joke. Financial literacy has to start with the foundation: how to manage daily cash flow, how to build an emergency cushion, how to understand a pay stub or a credit report. The “long-term” can wait until the basics are covered — and the basics DO need to be covered, and with any luck before they find themselves sitting in a 401(k)-enrollment meeting (which, of course, is rarer by the day).

At the end of the day, it’s not about what people know — it’s about what they do with what they know. And financial literacy, when it’s done right, turns hesitation into action. 

And “skeptics” into believers.

• Nevin E. Adams, JD

 

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[i]  See Which States Require Financial Literacy for High School Stud - Ramsey:  Alabama, California, Connecticut, Florida, Georgia, Indiana, Iowa, Kansas, Kentucky, Louisiana,  Michigan, Minnesota, Mississippi, Missouri, Nebraska, New Hampshire, North Carolina, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Utah, Virginia, West Virginia, Wisconsin

[ii] Indeed, the research on the subject of financial literacy in schools — at least pre-college — is not encouraging. According to a 2016 paper titled “High School Curriculum and Financial Outcomes: The Impact of Mandated Personal Finance and Mathematics Courses” “there is little evidence that education intended to improve financial decision-making is successful.” These authors pose the question “Can good financial behavior be taught in high school?,” only to conclude that, “It can, though not via traditional personal finance courses, which we find have no effect on financial outcomes.” Similarly, a 2014 paper by three professors reviewed 168 different papers covering some 200 studies on the topic of financial literacy and financial education — and found that what they termed “interventions to improve financial literacy” accounted for “only about 0.1 percent of the variance in the financial behaviors studied.” 

[iii] Noted academics have boiled that complicated concept down to three fairly fundamental questions —though personally I don’t see how knowing the answers to those particular questions would help anybody make a financial decision in the real world, much less a decision about saving or investing in a 401(k) plan. Which brings to mind questions not only what the personal finance curriculum covers, but what kind of contribution it is making to financial “literacy.”