by Daniel Kittell | Accounting News, News, Newsletter, Retirement, Retirement Savings
When you retire, you don’t have to move your 401(k) right away, and for many retirees, leaving it where it is could be a smart move. Employers are increasingly adding features that make staying in the plan more appealing. Why? Partly because when employees with large balances leave their money in the plan, it helps lower overall fees for both the company and participants. But before you make a decision, it’s worth understanding your options.
Most Retirees Can Leave Their 401(k) Where It Is
More than half of American workers don’t realize that most plans allow them to leave their 401(k) in place after they stop working.
The key word in that sentence is most. If your balance is under $1,000, your plan may automatically close the account and issue a check. If you don’t deposit that into another qualified retirement account, such as an IRA, it counts as a distribution and may be taxed. You could also incur a 10% early withdrawal penalty.
Additionally, if your balance is under $7,000, your employer may roll it into an IRA for you. Otherwise, your funds can stay put, and you can access it when needed, depending on your plan’s rules.
What’s Changing in 401(k) Plans?
In the past, many plans required retirees to withdraw the full balance or roll it over to an IRA. Now, according to a 2025 Vanguard study, 68% of plans allow retirees to set up installment payments from their accounts (up from 59%), and 43% allow partial, as-needed withdrawals (up from 16%).
These features give retirees more flexibility, but they’re not offered through all plans, so it’s important to check with your plan provider before making a decision to withdraw funds.
Should You Roll Over to an IRA?
Rolling your 401(k) to an IRA may get you a wider range of investment choices, and in some cases, lower fees. But with that flexibility comes responsibility. You’ll need to manage your own money or hire someone to do it for you.
Before moving your money, consider investment options in both accounts, fees (both visible and hidden), your comfort level with managing investments, and whether you anticipate needing regular withdrawals.
Annuities in 401(k)s
Some 401(k) plans now offer annuity options, either directly or through annuity-enhanced target-date funds. These are funds where you choose a target year, usually the year you plan to retire, and at first invest in higher-risk assets, such as stocks. As you get closer to your target year, the fund automatically shifts your money to safer investments, such as bonds.
Annuities offer a steady stream of income for life and peace of mind in retirement planning. On the other hand, they offer less flexibility, often include complex terms, and sometimes have added fees.
There’s No Rush
For many retirees, keeping your 401(k) where it is can be a solid choice, but you don’t need to make a move the day you retire. Take your time. Look at what your current plan offers. Compare it with your IRA options. Consult a financial advisor who can help you come up with a strategy that fits your goals, income needs, and comfort level.
by Daniel Kittell | Accounting News, Industry - Construction, News, Newsletter, Small Business
The Trump administration enacted new tariffs on lumber and kitchen cabinets, adding pressure to construction budgets. The tariffs apply a 10% duty on softwood lumber and a 25% levy on imported kitchen cabinets. By 2026, the cabinet tariff is set to double to 50%. As a result, we could be looking at higher construction costs, project delays, and a housing market ripple effect that could ultimately hit renters and homebuyers. Read on as we discuss the impact of these tariffs on the construction industry and the responsive steps to take now.
Why These Tariffs Matter
The construction industry relies heavily on imported materials. Lumber, cabinets, steel, and other staple building materials often come from global suppliers because domestic supplies fall short of meeting demand.
Canada is the top supplier of softwood lumber, making up about 40% of lumber imports. This is followed by China, Brazil, Mexico, and Germany. Tariffs on these imports raise prices for consumers.
Unfortunately, there is no quick fix. With a limited domestic production base, builders can’t just “buy American” and move on. That means higher costs get passed along the chain, from developers to consumers.
The Impact on Builders and Developers
When it comes to construction projects, a 10-25% spike in material costs can throw off budgets, delay construction timelines, or force design changes. Some of the hardest-hit sectors include multi-family housing, affordable housing projects, and areas rebuilding after natural disasters. For example, Los Angeles developers were already paying a premium for lumber after the wildfire damage. Now, added tariffs could stall rebuilding efforts and new construction.
An Industry in Flux
Developers are looking for new suppliers in countries not affected by tariffs, and they’re exploring alternatives such as engineered wood like LVP, laminate cabinets, and open shelving. But making these changes when projects are already underway can lead to longer lead times and further delays.
And while tariffs are enacted to protect U.S. industries, there is no quick way to ramp up domestic production of lumber and cabinetry. So builders are caught in the middle.
What Construction Firms Can Do
Here’s how construction businesses can respond to these tariffs:
- Review your material suppliers. If you rely heavily on imported lumber or cabinets, check lead times.
- Start having conversations with clients about possible price fluctuations.
- Make sure new bids for projects account for potential increases.
- With new projects moving forward, build in flexibility for longer timelines.
- Explore U.S.-made materials or products from countries not affected by tariffs.
Tariffs could significantly impact the construction landscape as builders and developers face higher costs, tighter timelines, and growing uncertainty. For now, and especially next year when tariffs on lumber rise further, the cost is likely to trickle down to consumers and local economies. The construction industry will need to adapt quickly, or fall behind.
by Daniel Kittell | Accounting News, News, Newsletter, Retirement Savings
When the Federal Reserve cuts interest rates, it’s good news for borrowers and consumers, but not so much for savers. The Fed’s recent quarter-point rate cut is a reminder that the annual percentage yields (APYs) on savings accounts and certificates of deposit (CDs) tend to fall soon after. This means you may need to adjust your savings strategy. Here’s how to keep your money growing when rates start dropping.
Why Savings and CD Rates Fall After a Rate Cut
When the Fed lowers interest rates, it becomes cheaper for banks to borrow money. As a result, they don’t need to be as competitive to attract deposits, so they tend to lower the interest they pay on savings accounts and CDs. That’s why you’ll often see your APY drop soon after the Fed makes a rate cut. In short, banks follow the tone set by the Fed.
Stick with a High-Yield Savings Account
Even when rates fall, high-yield savings accounts still offer better returns than traditional savings accounts. And if you want quicker access without the early withdrawal fees of CDs, a high-yield savings account is the way to go. Though these accounts have variable interest rates, you’ll want to look for one that earns at least 4% APY, has no monthly fees or minimum balance, and allows quick transfers between checking and savings.
The Fed is expected to make further cuts, so your earnings could dip slightly, but high-yield savings accounts are still safe and flexible accounts for emergency funds and short-term savings.
Lock in a CD Before Rates Drop Further
Assuming you have a robust and easily-accessible emergency fund and you’re wanting to set aside some separate funds that you don’t intend to touch for a while, consider locking in a CD now. CDs offer fixed interest rates, so if the Fed does make more rate cuts, you won’t be affected.
If you’re new to CDs, here are a few tips:
- Start small and short-term. If you’ve never used a CD, try one with a shorter maturity, like three or six months, to see how it fits your budget. A CD maturity is the date when it reaches the end of its fixed term. You have a grace period to decide if you want to renew it, withdraw the funds, or transfer them to another account without penalty.
- Watch for early withdrawal penalties. The longer the CD term, the bigger the penalty if you withdraw early. A five-year CD, for example, might cost you six months to a year of interest if you break it early.
- Avoid auto-renewals. Many banks automatically renew CDs when they mature. Set a reminder sometime before the end date so you can decide whether to reinvest or move your money elsewhere.
- Prioritize your goals first. CDs aren’t made for quick access, so they make the most sense once you’ve built a solid emergency fund.
When the Fed cuts rates, it’s natural for savings and CD earnings to slip, but you can keep your money moving in the right direction by staying flexible and adjusting your savings strategy as rates change.
by Daniel Kittell | Accounting News, Industry - Professional Services, News, Newsletter, Professional Services, Small Business
What happens when it’s time to step back from running your professional services firm? Is there a clear path for the future of your business? In this article, we’ll go over how to create a solid succession plan, whether you’re looking to sell, merge, or pass the firm on to the next generation.
What is Succession Planning?
Succession planning is more than just naming a new owner. A good plan includes legal and financial arrangements, contingency plans, and effective communication with family and staff. These elements ensure that everyone is informed and prepared so there are no surprises during the transition.
Why Succession Planning Matters
Without a clear plan, an unexpected event, like a sudden retirement or health issue, could lead to disruptions, including the loss of clients, staff, and the value of your business. Even if you’re not planning to step back anytime soon, having a plan in place keeps your business on solid footing and reassures employees and clients that the company is prepared to run smoothly, come what may.
A succession plan outlines how your business will continue in your absence. It can also help to reduce your family’s stress during the transition by managing potential financial and legal complications.
What to Cover in a Succession Plan
When creating your succession plan, there are a few key areas to cover:
- Ownership transition: Decide whether you want to sell the business, merge it with another firm, or pass it on to a family member. Each option involves different legal and financial processes. For example, if you’re selling or merging, you’ll need to have an accurate valuation of your business, and you’ll need to negotiate with potential buyers. If you’re passing the firm down, you may need financing arrangements, such as installments or loans, to facilitate the transaction.
- Business valuation: This involves assessing your firm’s revenue, profit margins, and growth potential to determine its market value. Having an up-to-date valuation is critical for setting realistic expectations and ensuring smoother negotiations.
- Leadership planning: It’s important to identify who will step into management roles when you leave. If possible, begin training and mentoring for these roles well in advance. This not only boosts employee confidence but also minimizes turnover.
- Contingency planning: Life is unpredictable, and your plan should include steps to take in case of illness, disability, or unexpected death. This prepares your firm to operate smoothly and protect its value even during challenging situations.
- Communication: A written communication plan can prevent confusion and conflict by making expectations clear for employees and family.
- Legal, financial, and tax considerations: Make sure your plan is clear about financial arrangements, buy-sell agreements, and tax implications. This should also connect with your estate plan, including wills and trusts. Consulting with attorneys and accountants can help protect your assets and avoid surprises.
Having a succession plan not only prepares your professional services firm for your eventual departure but also provides your employees with peace of mind, protects your family’s financial future, and helps maintain the value of the business you built.
by Daniel Kittell | Accounting News, Business Growth, News, Newsletter, Small Business
Small businesses are finally seeing signs of life after a rocky few years. Since January, average earnings have climbed by 75%. That’s an encouraging statistic, yet monthly revenues still lag behind the record highs of the past two years. This signals that progress is happening, but it’s not yet a full recovery. Read on as we go over what’s behind this upswing.
Tariffs: A Double-Edged Sword
Trump’s motive for implementing tariffs is to protect American manufacturing, but for small businesses that rely on imports, it’s been a mixed bag. Materials and products often cost more, which narrows already-slim margins. Some businesses have had to raise prices, cut expenses, and renegotiate supply agreements just to stay competitive.
How businesses are coping:
- Renegotiating contracts with suppliers
- Passing modest price increases to customers
- Narrowing focus to their most profitable products
While companies are being resourceful, uncertainty around future trade policy means small businesses are remaining cautious.
The One Big Beautiful Bill Offers Stability
The newly passed One Big Beautiful Bill provides some long-term stability by making small business tax cuts from the 2017 Tax Cuts and Jobs Act (TCJA) permanent. Until now, uncertainty loomed over whether those tax benefits would expire, which threw a wrench into long-term planning for small businesses.
Why the permanence of the TCJA tax cuts matters:
- Owners can plan investments with more confidence
- The law simplifies the tax code, leaving fewer surprises
- The law also reduces compliance requirements, saving time and energy
These changes won’t automatically boost sales, but they do give business owners a more stable and predictable foundation to work from.
Interest Rate Cuts Predicted
Economists expect at least one rate cut this year. If that happens, borrowing could get less expensive for small businesses. Lower rates would lower the cost of financing new equipment, pursuing expansion opportunities, or even short-term cash-flow needs during slower seasons.
If rates are cut as expected, the combined benefits of cheaper financing, permanent tax relief, and the earnings growth seen since January could help propel recovery into 2026.
Balancing Optimism with Caution
The 75% jump in earnings since January is a great sign, but small businesses still face challenges, especially with high supply costs, persistent labor shortage, and unpredictable global markets. And if inflation rises or trade tensions flare up, consumers could start spending less.
Even with tariffs and ongoing uncertainty, the 75% earnings statistic indicates the resiliency of small businesses. By staying flexible, diversifying revenue sources, and preparing to adjust as needed, many small businesses are not just navigating the recovery process but also positioning themselves for growth opportunities.
