Welcome to the Educated Investor,
our monthly newsletter with information that can help you with your retirement planning. Feel free to use this information and to pass it along to your friends and associates. If you are interested in additional information contact our office at 
(720)482-1917 or email scichon@householdergroup.com


Make the Most of Your 401(k)
As more Americans shoulder the responsibility of funding their own retirement, many rely increasingly on their 401(k) retirement plans to provide the means to pursue their investment goals. That’s because 401(k) plans offer a variety of attractive features that make investing for the future easy and potentially profitable.

What is a 401(K) Plan?
401(k) plan is an employee-funded savings plan for retirement. For 2018, you may contribute up to $18,500 of your salary to a special account set up by your company, although individual plans may have lower limits on the amount you can contribute. Individuals aged 50 and older can contribute an additional $6,000 in 2018, so-called “catch-up” contributions.
How are 401(K) Plans Taxed?
401(k) plans come in two varieties: traditional and Roth-style plans.
With a traditional 401(k) plan, you may defer taxes on the portion of your salary contributed to the plan until the funds are withdrawn in retirement, at which point contributions and earnings are taxed as ordinary income. In addition, because the amount of your pretax contribution is deducted directly from your paycheck, your taxable income is reduced, which in turn lowers your tax burden. 
A Roth 401(k) plan features after-tax contributions but tax-free withdrawals in retirement. Under a Roth plan, there is no immediate tax benefit. However, plan balances have the potential to grow tax free; you pay no taxes on qualified distributions.
Matching Contributions
One of the biggest advantages of a 401(k) plan is that employers may match part or all of the contributions you make to your plan. Typically, an employer will match a portion of your contributions, for example, 50% of your first 6%. Under a Roth plan, matching contributions are maintained in a separate tax-deferred account, which, like a traditional 401(k) plan, is taxable when withdrawn. Total contributions, including employee and employer portions, cannot exceed $55,000 in 2018. Note that employer contributions may require a “vesting” period before you have full claim to the money and their investment earnings.
Both traditional and Roth plans require that distributions be taken after 59½ (or age 55 if you are separating from service with the employer from whose plan the distributions are withdrawn), although there are certain exceptions for hardship withdrawals. If a distribution is not qualified, a 10% IRS additional federal tax will apply in addition to ordinary income taxes on all pretax contributions and earnings.
When You Change Jobs
When you change jobs or retire, you generally have four different options for your plan balance:

1. Keep your account in your former employer’s plan, if permitted;
2. Transfer balances to your new employer’s plan;
3. Roll over the balance into an IRA;
4. Take a cash distribution.
The first three options generally entail no immediate tax consequences; however, taking a cash distribution will usually trigger 20% withholding, a 10% additional federal tax if taken before age 59½, and ordinary income tax on pretax contributions and earnings.
Borrowing From Your Plan
One potential advantage of many 401(k) plans is that you may borrow as much as 50% of your vested account balance, up to $50,000. In most cases, if you systematically pay back the loan with interest within five years, there are no penalties assessed to you. If you leave the company, however, you may have to pay back the loan in full immediately, depending on your plan’s rules. In addition, loans not repaid to the plan within the stated time period are considered withdrawals and will be taxed and penalized accordingly.
Choosing Investments
Most plans provide you with several options in which to invest your contributions. Such options may include stocks for growth, bonds for income, or cash equivalents for protection of principal. This flexibility allows you to spread out your contributions, or diversify, among different types of investments, which can help keep your retirement portfolio from being overly susceptible to different events that could affect the markets.
A 401(k) plan can become the cornerstone of your personal retirement savings program, providing the foundation for your financial future. Consult with your plan administrator or financial advisor to help you determine how your employer’s 401(k) plan could help make your financial future more confident.

Stock investing involves risk, including loss of principal. Bonds are subject to market and interest rate risk if sold prior to maturity. Bond values will decline as interest rates rise, and bonds are subject to availability and change in price. An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund may seek to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund. Diversification and asset allocation do not ensure a profit or protect against a loss.
This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

Required Attribution:
Because of the possibility of human or mechanical error by DST Systems, Inc. or its sources, neither DST Systems, Inc. nor its sources guarantees the accuracy, adequacy, completeness or availability of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. In no event shall DST Systems, Inc. be liable for any indirect, special or consequential damages in connection with subscriber’s or others’ use of the content.
© 2018 DST Systems, Inc. Reproduction in whole or in part prohibited, except by permission. All rights reserved. Not responsible for any errors or omissions.
Retirement Expectations Versus Reality: Communication Opportunities
at the Crossroads  
When expectation and reality differ, the results can be tough to take — especially when the subject is retirement. By communicating with employees in a way that recognizes both the perceptions and the realities, employers can smooth the transition from worker to retiree.
With this disconnect in mind, it’s important for employers to pay attention to key areas where worker expectations and retirement reality part ways. They may then be able to direct their communication efforts where they could truly make a difference
When, Where, and How Much?
Important points where worker perception can be different than retirement reality include when to retire, and how much income will be needed and from what source. Those were among the areas explored recently by the Employee Benefits Research Institute. These topics, along with the basics of managing a household budget, can form the basis of an effective communication program to guide employees into retirement. Half of the workers who answered a survey expressed confidence that they know how much income they will need in retirement; half also believe they know how to withdraw income from their savings and investments. A higher number (two-thirds) of retirees say such withdrawals are relatively easy.
Just one-third of workers expect Social Security to play a major role in their retirement income. In fact, 50% said it will be a minor source of their retirement income, and 13% don’t consider it a source at all. Contrast that with the response among retirees, where two-thirds say Social Security is a major source of their income.
On Time, Early, or Late
The timing of the initial Social Security claim is something employees think about, and they seem to believe that earlier is better. Many fail to take full advantage of the program by delaying their claim until they are able to receive their highest possible benefit. About half of employees say they think about the timing of their retirement and how it will impact them financially. But they still plan to claim their Social Security benefits at a median age of 65. Just 23% of workers said they chose the age at which they plan to claim benefits with their maximum available benefit in mind.

Read more about retirement confidence from workers and retirees in the Employee Benefit Research Institute’s latest survey, at https://tinyurl.com/EBRI-RCS-2018 .
For plan sponsor use only, not for use with participants or the general public. This information is not intended as authoritative guidance or tax or legal advice. You should consult with your attorney or tax advisor for guidance on your specific situation. Kmotion, Inc., 412 Beavercreek Road, Suite 611, Oregon City, OR 97045; www.kmotion.com © 2019 Kmotion, Inc. This newsletter is a publication of Kmotion, Inc., whose role is solely that of publisher. The articles and opinions in this publication are for general information only and are not intended to provide tax or legal advice or recommendations for any particular situation or type of retirement plan. Nothing in this publication should be construed as legal or tax guidance; nor as the sole authority on any regulation, law or ruling as it applies to a specific plan or situation. Plan sponsors should consult the plan’s legal counsel or tax advisor for advice regarding plan-specific issues.
Origins of Valentine's Day
The history of Valentine’s Day is a bit murky. In the late fifth century, it replaced a Roman fertility festival on the same date. The Roman Catholic Church recognizes at least three saints named Valentine or Valentinus, all of whom were martyred.
One famous legend has it that Valentine was a Roman priest in the third century. When Emperor Claudius II decided that single men made better soldiers, he outlawed marriage for young, unattached men. Valentine continued to perform marriages in secret. When his defiance was discovered, he was put to death.
According to another legend, a martyred Valentine might have sent the first valentine greeting. In that version, Valentine fell in love while in prison with a girl who visited him. Before his death, he sent her a letter signed “from your Valentine”, an expression that has been carried down through the ages.
In 496, Pope Gelasius I set aside Feb. 14 to honor St. Valentine. By the Middle Ages, Valentine was one of the most popular saints in Europe. Lovers were exchanging homemade cards as early as the 15th century, copying verses from books of valentine poems.
Valentine Customs around the World
During the Middle Ages, young men and women drew names from a bowl to see who their valentine would be. They would wear the name on their sleeve for one week, perhaps the origin of the expression “wearing your heart on your sleeve”.
In Wales, wooden love spoons were carved and given as gifts on Feb. 14. Hearts, keys and keyholes were common motifs on the spoons, meaning “you unlock my heart.” 1  
Although Valentine’s Day is a relatively new holiday in Denmark, the country has embraced February 14th with a Danish twist. Rather than roses, friends and sweethearts exchange pressed white flowers called snowdrops.
Italian Valentine’s Day tradition was for young, unmarried girls to wake up before dawn to spot their future husbands. The belief was that the first man a woman saw on Valentine’s Day was the man she would marry within a year. Or he’d at least strongly resemble the man she would marry.
With Carnival held sometime in February or March each year, Brazilians skip the February 14th celebration and instead celebrate Dia dos Namorados, or “Lovers’ Day”, on June 12th. In addition to the usual exchanges of chocolates, flowers and cards, music festivals and performances are held throughout the country. Gift giving isn’t limited to couples, either. In Brazil, people celebrate this day of love by exchanging gifts and sharing dinner with friends and relatives, too.
Like many parts of the world, South Africa celebrates Valentine’s Day with festivals, flowers and other tokens of love. It’s also customary for women in South Africa to wear their hearts on their sleeves on February 14th; women pin the names of their love interest on their shirtsleeves, an ancient Roman tradition known as Lupercalia. In some cases, this is how South African men learn of their secret admirers.
While Valentine’s Day celebrations in the Philippines are similar to celebrations in Western countries, one tradition has swept the country and led to thousands of couples sharing a wedding day on February 14th. Mass wedding ceremonies have gained popularity in the Philippines in recent years, leading hundreds of couples to gather at malls or other public areas around the country to get married or renew their vows en masse. 2  
Finland and Estonia slow things right down on Valentine’s Day, opting for a friendlier celebration called Ystävän Päivä in Finnish and Sõbrapäev in Estonian instead. Here, February 14 is all about celebrating friendship, and people exchange presents and cards with the greeting ‘Happy Friends Day’. 3  
Origins of Valentine's Day
Want to show someone how much you care this Valentine’s Day? What better way than strawberry heart cupcakes!
6 jumbo Cupcakes
Total Time:
60 minutes
1 1/2 teaspoons baking powder
1/2 teaspoon salt
1 stick unsalted butter, at room temperature
For the cupcakes:
1 1/2 cups all-purpose flour
3/4 cup granulated sugar
2 large eggs, at room temperature
1 teaspoon vanilla extract
1/2 cup strawberry-flavored milk, at room temperature
6 strawberries, hulled
For the frosting and topping:
2 cups confectioners’ sugar
1/2 cup unsweetened cocoa powder
1 stick unsalted butter, at room temperature
1/2 cup heavy cream
3 strawberries, hulled and halved lengthwise
1. Make the cupcakes: Preheat the oven to 350 degrees F. Line a 6-cup jumbo muffin pan with paper liners. Whisk the flour, baking powder and salt in a bowl.
2. Beat the butter and granulated sugar in a large bowl with a mixer on medium-high speed until light and fluffy, about 3 minutes. Beat in the eggs, one at a time, then beat in the vanilla. Reduce the mixer speed to low; beat in the flour mixture in 3 batches, alternat­ing with the strawberry milk, beginning and ending with flour, until just combined.
3. Divide the batter evenly among the prepared muffin cups. Bake until a toothpick comes out clean, 25 to 30 minutes. Let cool 5 minutes in the pan, then remove to a rack to cool completely.
4. Using a paring knife, cut a cone-shaped piece of cake out of the top of each cupcake (about the same size as the strawberries), stopping about 1/2 inch from the bottom. Stuff with the strawberries, then cover with a small piece of the removed cake.
5. Make the frosting: Sift the confectioners’ sugar and cocoa powder into a medium bowl. Transfer half of the sugar-cocoa mixture to a large bowl; add the butter and 1/4 cup cream and beat with a mixer on medium-high speed until smooth. Add the remaining sugar-cocoa mixture and 1/4 cup cream and beat until fluffy. Transfer to a pastry bag fitted with a star tip and pipe onto the cupcakes. Top each with a strawberry half. 
Householder Group Estate and Retirement Specialists LLC. Advisors are Registered Representatives with and securities offered through LPL Financial, Member FINRA / SIPC . Investment advice offered through Householder Group Estate and Retirement Specialists LLC., a Registered Investment Advisor and separate entity from LPL Financial.