Is Value Investing Dead?

Is Value Investing Dead?

 

LUTZ BUSINESS INSIGHTS

 

is value investing dead?

Josh Jenkins, cfa, senior portfolio manager & head of research

 

Value investing has been around for nearly a century, developing a devout group of followers over time. Some of the world’s most prominent investors employ a variation of the strategy, including Omaha’s Warren Buffett. It’s not just the practitioners filling the ranks of the believers, the approach is also supported by academic research. Value investing has a strong track record with sound economic rationale to back why it has worked in the past, and why it should work in the future.

None of this changes the fact that recently the relative performance of value investing has stunk (please excuse the technical jargon). For over a decade it has lagged behind the broad market, causing some investors and pundits to lose the faith. Here at Lutz, however, we still believe. To understand why, let’s explore what value investing is, how it has performed in the past, and why we are optimistic about its future.

What is Value?

“Long ago, Ben Graham taught me that ‘Price is what you pay, value is what you get.’ Whether we’re talking about socks or stocks, I like buying quality merchandise when it is marked down.” – Warren Buffett, 2008 Berkshire Hathaway Shareholder Letter

The above quote illustrates an important distinction that is confusing to many investors. How can you tell if a stock, or a broad market index like the S&P 500, is cheap or expensive? The obvious answer would be to look at its price. This approach feels natural, as many of us do it on a daily basis as we walk through a store or click around Amazon, but it can be misleading. The chart below illustrates the price index for the S&P 500 going back to 1928. If you tried to evaluate its merits based solely on price, you might reasonably conclude it was extremely cheap from the late 1920’s to the 1970’s. Aside from a few painful drawdowns in the 1990’s and 2000’s, the market appears to become more expensive year after year. The question is: If prices are always going higher, can stocks ever be cheap again?

S&P 500 Price Index

Source: MorningstarDirect. The S&P 500 is represented by the S&P 500 PR Index, using monthly data from 1/1/1928 to 6/30/2019. 

This is where Buffett’s quote comes into play. It is evident we have paid more for stocks over time, but has anything changed in what we receive for our money? The answer, of course, is “yes”. Decades of companies reinvesting their profits to expand and develop new technologies has resulted in businesses that are larger, more efficient, and more profitable than ever.

There are many variations of the value approach employed by the investment community. A simple one seeks to evaluate how many dollars you must pay to purchase one dollar of some fundamental metric of a company or market index. Commonly used metrics include sales, earnings (think of earnings as profits), cash flow, or book value. The value approach is centered on making sure the price you pay is reasonable relative to what you get in return. When it comes to buying stocks, what you ultimately get is an ownership stake in a company (the book value), and the right to participate in its operations (its sales, profits, and cash flows). The intuition behind using earnings (profits) as an example, is that returns will increase as you decrease the price paid for the same level of profits.

From here on “value stocks”, or simply just “value”, will refer to the subset of companies where the price paid per unit of the above fundamentals is low, relative to other stocks. If value stocks are those with the lowest price, the flip side of the coin would be growth stocks, or just “growth”. While it may seem counterintuitive to intentionally purchase the most expensive companies available, it’s actually a very popular strategy. The high flying “FANG” stocks (Facebook, Amazon, Netflix and Google), fall into this category. As their name implies, these firms are typically growing at a much faster rate than their value counterparts, and investors are willing to pay more for that future growth. The price may appear high today, but it could ultimately become a cheap purchase if the expected growth comes to fruition. The problem is investors tend to overestimate growth.

The Performance of Value

“In Theory there is no difference between theory and practice. In practice there is.” – Yogi Berra

The idea behind value investing is simple enough, but has it actually worked? To find out, we can compare the historical returns of value versus growth. Using data going back 91 years, the results clearly favor value, which outperformed the more expensive growth stocks by an average of 3.10% per year. While value has delivered higher returns over the long term, it has struggled notably in recent years. Over the last decade, the leadership has reversed with growth outperforming value by 3.44% per year. It is impossible to say precisely what has caused this change, but the massive returns from a small subset of firms (including the FANG stocks) have certainly contributed.

Historical Performance of Value vs Growth

Source: The Kenneth French Data Library; https://mba.tuck.dartmouth.edu/pages/faculty/ken.french/data_library.html. Value is represented by the Fama/French US Value Research Index, growth is represented by the Fama/French US Growth Research Index. The indices are not available for direct investment, do not include costs/fees, and are not representative of actual portfolios. Returns are annualized, based on monthly data from 1/1/1927 – 5/31/1927.  

After an extended period of underperformance investors will invariably begin to question whether things have changed to the point the strategy is obsolete. While no one can say for certain if or when value will make its comeback, it is important to recognize the current bout of poor relative performance is not unprecedented. There have been several other notable periods where value has struggled.

Looking at the chart below, value has outperformed on a ten year basis during the majority of the evaluation period, as evidenced by the green line fluctuating above the grey bar marking 0.0%. When the line is blue and below the grey bar (as it is today), it signifies growth has outperformed value. The aftermath of the Great Depression (1930’s), and the run-up of the internet boom (late 1990’s) provide two stark examples of past rough patches for value.

10 Year Rolling Performance - Valus vs Growth

Source: The Kenneth French Data Library; https://mba.tuck.dartmouth.edu/pages/faculty/ken.french/data_library.html. Value is represented by the Fama/French US Value Research Index, growth is represented by the Fama/French US Growth Research Index. The indices are not available for direct investment, do not include costs/fees, and are not representative of actual portfolios. Returns are annualized, based on monthly data from 1/1/1927 – 5/31/1927.  

Alas, no strategy works all the time. Value investing, like many other phenomena in the markets, is cyclical. Investors may shun certain companies for extended periods of time. This in turn makes them cheaper, and may set them up to perform better in the future. Conversely, people can get overly excited about the prospects of certain companies. As more investors buy into the ever-rising growth expectations, the price could rise too far, setting the company up to underperform. Even a wonderfully successful company can be a subpar investment by merely delivering great results when the market was expecting perfection.

 

Value Going Forward

“There is no way that we can predict the weather six months ahead beyond giving the seasonal average.” – Stephen Hawking, Black Holes and Baby Universes

Despite its struggles, there is a good reason to expect brighter days ahead for value. Given how well growth has done recently (particularly FANG stocks discussed above), the discount paid for value stocks is currently larger than normal. The chart below illustrates the discount for value companies (large and small) relative to the broad market. The middle grey bar in each section represents the average cost historically, while the green lines represent the current cost over time. The lower the green line moves, the cheaper value stocks are relative to the rest of the market.

Large and Small Cap Values

Source: Morningstar Direct. Valuations are based on an equally weighted composite of price/book value, price/earnings, price/sales, and price/cash flow of each value index relative to the broad market. Large cap value is represented by the S&P 500 Value Index, while small cap value is represented by the S&P 600 Value Index. The broad market was represented by the Russell 3000 index. Data from 1/2001 to 6/2019.

As you can see from the chart, not only are value companies trading at a larger discount than average relative to the rest of the market, they are the cheapest they have been since the early 2000’s! Unfortunately being a better deal than usual is not a guarantee that value stocks are poised to outperform in the near, or even intermediate term. Over time, however, the price paid has been shown to be one of the best predictors of future returns. Generally speaking the cheaper you can purchase stocks, the higher the returns you can reasonably expect (all else equal).

Wrapping Up

While the critics continue to debate whether or not value investing is dead, we believe those investors who are patient will be rewarded. The strategy has weathered many market cycles over the decades and endured other periods of extended underperformance. The opportunity to buy these already cheap companies at a larger than normal discount gives us a good reason for optimism.

ABOUT THE AUTHOR

402.763.2967

jjenkins@lutz.us

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JOSH JENKINS, CFA + SENIOR PORTFOLIO MANAGER & HEAD OF RESEARCH

Josh Jenkins is a Senior Portfolio Manager & Head of Research at Lutz Financial with over eight years of investment experience. He is responsible for assisting clients in the construction, selection, and risk assessment of their investment portfolios. In addition, Josh will provide on-going research and trade support.

AREAS OF FOCUS
  • Asset Allocation & Portfolio Management
  • Investment & Market Research
  • Trading
AFFILIATIONS AND CREDENTIALS
  • Chartered Financial Analyst (CFA)
  • Chartered Financial Analyst Institute, Member
  • Chartered Financial Analyst Society of Nebraska, Member
EDUCATIONAL BACKGROUND
  • BSBA, University of Nebraska, Lincoln, NE

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VIEW MODIFIED SUMMER HOURS HERE

OMAHA

13616 California Street, Suite 300

Omaha, NE 68154

P: 402.496.8800

HASTINGS

747 N Burlington Avenue, Suite 401

Hastings, NE 68901

P: 402.462.4154

LINCOLN 

601 P Street, Suite 103

Lincoln, NE 68508

P: 531.500.2000

GRAND ISLAND

3320 James Road, Suite 100

Grand Island, NE 68803

P: 308.382.7850

August Retirement Plan Newsletter 2019

August Retirement Plan Newsletter 2019

 

LUTZ BUSINESS INSIGHTS

 

august RETIREMENT PLAN NEWSLETTER

FOUR REASONS TO INTEGRATE HEALTH SAVINGS INTO YOUR RETIREMENT PLAN

As Americans look into the future and towards retirement, many understand that maintaining their health will be an important part of their overall quality of life after they stop working. However, uncertainty around healthcare costs – both now and in retirement – is a major financial worry among Americans preparing for retirement. So how can you help your workers reduce financial anxiety about retirement preparedness and increase the likelihood that they will be able to meet their healthcare costs in retirement?

Health savings accounts (HSAs) present retirement plan sponsors a unique opportunity to address both the wealth and health of employees planning for retirement. HSAs are a popular way for individuals to save for medical expenses while reducing their taxable income – in effect, using their

HSA as a long-term investment vehicle. And though HSAs typically are introduced to employees as part of their high deductible healthcare plans (these are the only plan types which currently offer HSAs), many recordkeepers are beginning to offer them in an integrated platform where that can be reviewed alongside retirement savings.

Here are four reasons to integrate HSAs into your retirement plan offering:

1. Health Savings Accounts Address Concerns About Future Costs

In today’s retirement plan marketplace, holistic approaches increasingly feature a multi-faceted program that offers numerous features, all aimed at improving retirement readiness. While in the past it was sufficient to offer employees a straight-forward savings vehicle and trust that they would responsibly go about making contributions, today’s plan sponsors have seen that the introduction of sophisticated plan design features such as automatic enrollment, automatic escalation and financial wellness consultation go a long way towards boosting outcomes for their employees. With healthcare being such an important factor in quality of life, we see HSAs as one more tool you can wield in improving overall plan health.

HSAs are designed to assist individuals in paying for healthcare expenses both now and in the future. Today, a healthy 65-year-old male retiree can expect to pay $144,000 to cover healthcare expenses during retirement, and many studies show that we can expect health costs to rise at a rate that outpaces inflation, meaning this number will only grow over time. As HSAs are designed to provide a savings vehicle dedicated to covering qualified healthcare expenses, their ability to grow contributions tax-free helps defray the effect of future cost increases.

 

2. Health Savings are Triple Tax-Free Now and in Retirement

HSAs are unique in that they are designed specifically for healthcare expenses yet act more like an individual retirement account (IRA). HSAs are the only triple-tax advantaged savings vehicle of its kind. Participants with an HSA make contributions with pre-tax income, earnings and interest grow tax-free, and withdrawals are tax-free when used to pay for qualified medical expenses. Once in retirement, HSAs include no minimum required distributions and no Social Security or Medicare tax on contributions.

 

3. HSAs Can be Easily Integrated into an Existing Plan

You may be concerned about the administrative burden of incorporating an HSA into an existing plan, but in reality it can be done with little added administrative effort. In fact, it is possible for you to reduce administrative complexities with a single platform for both defined contribution plans and HSAs (as mentioned previously, many major recordkeepers offer their own HSA programs). With one portal that handles enrollment, retirement plan management, financial wellness programs, and HSA management, participants and sponsors can enjoy the added benefits of having these additional features seamlessly incorporated into their existing accounts. To improve the overall implementation of HSAs into a plan, we also encourage plan sponsors to incorporate HSA education into the front end of employee training, alongside other educational efforts for defined contribution plans and healthcare benefits.

 

4. Health Savings Accounts can Boost Employee Recruiting and Retention

If American workers are as anxious about medical expenses in retirement (and financial wellness in general) as surveys indicate, then a holistic retirement plan offering can be leveraged for marketing to potential new hires. A retirement plan that alleviates an employee’s concerns about the future will help employers retain existing workers and help attract new talent. By integrating an HSA into a robust retirement plan, your company signals that it understands the challenges to retirement preparedness and is ready to offer benefits that do the most to prepare them. The HSA account also rolls over in the same way a retirement account does, even if they choose to change jobs later on, making the benefit to the employee portable.

 

Conclusion

With the ultimate goal of providing a holistic retirement plan that prepares participants for financial security in retirement, you may want to consider adding HSAs to your plan offering. As a unique vehicle designed to reward savers with triple-tax benefits, HSAs can be seamlessly integrated into existing retirement plans while helping employee recruitment and retention. With healthcare costs continuing to increase with each passing year, HSAs provide a welcome sense of financial preparedness for Americans planning for their retirements.

For more information on HSAs, please contact your plan advisor.

 

About the Author, Kameron Jones

Kameron provides extensive knowledge of the provider marketplace to help reduce plan-related costs and improve plan-related services. He has assisted hundreds of mid- to large-market 401(k), 403(b), 457(b), 401(a), NQDC, Cash Balance, and DB plans. Kameron was also voted as a National Association of Plan Advisors (NAPA) top advisor under 40. Kameron graduated from the University of Pennsylvania with a Bachelor of Arts in philosophy, political science and economics and played outside linebacker on UPenn’s football team.

ANTHEM SETTLEMENT AWARDS PARTICIPANTS MORE THAN $23M

Recently the Bell vs. ATH Holding Company, LLC (a subsidiary of Anthem, Inc.) lawsuit settled. This is frequently referred to as the “Anthem Settlement” (the “Settlement”). The Settlement received quite a bit of attention from both the industry and mainstream press for a number of reasons, not the least of which include the size of the 401(k) plan ($5.1 billion), the size of the monetary settlement ($23,650,000), as well as inclusion of somewhat unusual non-monetary terms.

The Anthem 401(k) is considered a “jumbo” plan with over $5.1 billion in plan assets.  All but two of the plan’s investments were Vanguard mutual funds.  Vanguard mutual funds have a reputation for being low-cost investment alternatives.

Plaintiffs made the following allegations:

  • The plan’s fiduciaries breached their duties to the plan by using more expensive share classes of investments than was necessary. For example, the plan offered the Vanguard Institutional Index Fund with an expense ratio of 0.04%, but a lower share class was available at 0.02%.
  • Less expensive vehicles should have been explored for the same investment strategies, for example utilization of collective investment trusts (CITs) or separate accounts (SAs).
  • The plan should have offered a stable value investment instead of a low-yielding money market fund.

In discussing the Settlement it is important to remember that the case has not actually been adjudicated.  In other words, no court has ruled on the merits of the allegations made against, nor the actions taken by, the plan’s fiduciaries.  Also, it would be incorrect to state that any inferences can be made about the prudence, or lack thereof, of the fiduciaries’ actions or inactions in regards to any of the allegations.  Rather, what may be gleaned from the Settlement are concepts that fiduciaries should understand to best protect themselves from similarly targeted lawsuits.

Settlement Terms

The following are monetary, and some of the more interesting non-monetary, settlement terms:

  • $23,650,000 – split amongst two classes of participants. One class contains participants with account balances greater than $1,000 as of a certain date.  The other class contains participants who would have experienced a reduction of their account at a rate of $35/year due to revenue sharing for a certain period of years.
  • The plan’s committee will provide a targeted communication to participants invested in the money market that includes a fund fact sheet (or something similar that explains the risks of the money market fund), the historical returns of the money market over the past 10 years, and the benefits of diversification.
  • The plan’s fiduciaries must conduct an RFP for recordkeeping services within 18 months of the Settlement period. The RFP must explicitly request a fee proposal based on total fixed fee and on a per participant basis.
  • The fiduciaries must engage an independent investment consultant, review said consultant’s recommendations, and make decisions based on those recommendations, taking into account the lowest-class share class available, whether or not revenue sharing rebates are available, and alternative investment vehicle (CIT or SA) availability. 

Takeaways

Fiduciaries should take away the following concepts from the Settlement:

  • Plaintiff’s counsel seems to have a preference for per participant fee structures. This is not legally required, and in fact may not always be the most cost efficient fee design. Plaintiff’s counsel’s actions are a sober reminder that fiduciaries should, at a minimum, educate themselves regarding available fee structures and choose prudently among them.
  • Pushing for the lowest share class seems to be a recurring theme in lawsuits and settlements. Again, this is not a requirement under the law.
  • The desire to see more plans use investment vehicles that may be less expensive than their mutual fund counterparts is increasing. CITs and SAs are designed for institutional use, such as qualified retirement plans. Fiduciaries need to be educated on their availability and when it may be prudent to offer them in their plans.

As always, we will keep you abreast of significant industry developments and provide you with practical applications for your roles as a plan sponsor and fiduciary.

HEY JOEL!

Welcome to Hey Joel! This forum answers plan sponsor questions from all over the country by our in-house former practicing ERISA attorney.

Hey Joel,

Is it ok to use the same company for my plan’s recordkeeping, 3(38) advisory services, and administration? – Consolidating in California

Dear Consolidating,

It may seem logical to bundle all of your retirement plan’s services with one provider – recordkeeping, 3(38) advisory services, and administration. How easy would it be to have a one-stop-shop for everything? However, this might not be as good of an idea as you would think.

Having an independent 3(38) or 3(21) adviser is critical in monitoring the providers that are working on your plan. Without an independent expert on your side, how will you know whether, 1) mistakes are being identified, and 2) if mistakes are identified, are they being properly dealt with? An independent adviser will ensure providers are taking proper actions even if it costs them money.

You wouldn’t want the fox guarding the hen house, would you?

 

Expanding Horizons,

Joel Shapiro

 

About Joel Shapiro, JD, LLM

As a former practicing ERISA attorney Joel works to ensure that plan sponsors stay fully informed on all legislative and regulatory matters. Joel earned his Bachelor of Arts from Tufts University and his Juris Doctor from Washington College of Law at the American University.

PARTICIPANT CORNER: WHAT'S AN HSA AND IS IT RIGHT FOR YOU?

This month’s employee memo gives participants answers to common questions on HSAs. Download the memo from your Fiduciary Briefcase at fiduciarybriefcase.com and distribute to your participants. Please see an excerpt below.

Health savings accounts (HSAs) have grown tremendously in popularity over the past few years. You’ve probably heard of them or maybe your employer offers one. This memo will uncover answers to common questions you may have about HSAs.

What’s an HSA?

A type of savings account that allows you to set aside money on a pre-tax basis to pay for qualified medical expenses.

 

Can anyone get an HSA?

In order to open an HSA, an individual must first enroll in a qualified high deductible health plan (HDHP).

 

I’ve heard HSAs have triple-tax advantages, what are they?

  1. Contributions are tax free.
  2. Contributions can be invested and grow tax free.
  3. Withdrawals aren’t taxed, if used for qualified medical expenses.

If I change employers, what happens to my HSA?

HSAs are completely portable for employees, meaning you may take it with you if you change employers.

 

Do I lose my HSA funds at the end of the year?

No. The balance can grow and carry from year to year and can also be invested.

 

What can I pay for with my HSA?

Generally HSA funds can be used to pay for anything that your insurance plan considers a “covered charge,” including charges not paid by your health insurance because they were subject to a co-pay, deductible or coinsurance.

DISCLOSURE INFORMATION

Please remember that past performance may not be indicative of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Lutz Financial (“Lutz”), or any non-investment related content, made reference to directly or indirectly in this newsletter will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.  Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this newsletter serves as the receipt of, or as a substitute for, personalized investment advice from Lutz.  To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing.  Lutz is neither a law firm nor a certified public accounting firm and no portion of the newsletter content should be construed as legal or accounting advice.  A copy of the Lutz’s current written disclosure Brochure discussing our advisory services and fees is available upon request. Please Note: If you are a Lutz client, please remember to contact Lutz, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. Lutz shall continue to rely on the accuracy of information that you have provided.

For more important disclosure information, click here.

RECENT LUTZ FINANCIAL POSTS

Is Value Investing Dead?

Value investing has been around for nearly a century, developing a devout group of followers over time. Some of the world’s most prominent investors employ a variation of the strategy, including Omaha’s…

read more

Toll-Free: 866.577.0780  |  Privacy Policy

All content © Lutz & Company, PC

VIEW MODIFIED SUMMER HOURS HERE

OMAHA

13616 California Street, Suite 300

Omaha, NE 68154

P: 402.496.8800

HASTINGS

747 N Burlington Avenue, Suite 401

Hastings, NE 68901

P: 402.462.4154

LINCOLN 

601 P Street, Suite 103

Lincoln, NE 68508

P: 531.500.2000

GRAND ISLAND

3320 James Road, Suite 100

Grand Island, NE 68803

P: 308.382.7850

July Retirement Plan Newsletter 2019

July Retirement Plan Newsletter 2019

 

LUTZ BUSINESS INSIGHTS

 

JULY RETIREMENT PLAN NEWSLETTER

SUMMER HOMEWORK FOR FIDUCIARIES

As you bask in the glory of summer over the next couple of months, don’t forget the three Fs that define this cherished season — fun, Fourth of July, and fiduciary! While you’re enjoying the fruits of summer, don’t forget your fiduciary responsibilities! Ask yourself the following questions to make sure you are on top of your responsibilities and liabilities.

  1.  Are you practicing procedural prudence when making plan management decisions?
  2. Do you clearly understand the DOL’s TIPS on selecting and monitoring your QDIA in order to obtain fiduciary protection?
  3. Are you documenting each plan management decision and its support?
  4. Are you familiar with current trends in fiduciary litigation?
  5. Are you certain that your plan is being administered in accordance with your plan document provisions?
  6. What fiduciary liability mitigation strategies are you following? (Fiduciaries are personally financially responsible for any fiduciary breaches that disadvantage participants.)
  7. Are you kept abreast of regulatory changes?
  8. Are you appropriately determining reasonableness of plan fees, services and investment opportunities?
  9. How do you define “success” for your plan and what metrics do you use to track progress?
  10. Is your current plan design communicating the appropriate messaging to encourage success for your participants and plan fiduciaries?
  11. Is your menu efficiently designed for benefit of participants and plan fiduciaries?
  12. Are you certain you are providing all required communications and distributions to plan participants (including former participants with account balances)?
  13. Are you handling missing participants appropriately?
  14. Are you appropriately monitoring and documenting your fiduciary activities and those of your service providers?
  15. Are you maintaining plan records appropriately?

Many fiduciaries are unaware of their fiduciary responsibilities or do not understand them. As you contemplate these important questions while staying cool this summer, if you need help uncovering the answers to any of these important questions, do not hesitate to ask your plan advisor.

 

About the Author, Morgan Davis

Morgan is responsible for guiding plan sponsors through the intricacies of investment analysis and innovative plan design and making it easy to understand. Blending employer and employee objectives, Morgan encourages plan design initiatives to create optimal retirement plan outcomes for participants. Morgan is a graduate of Michigan State University where she earned a Bachelor of Arts in marketing.

THE SECURE ACT

LEGISLATION TO HELP AMERICANS SAVE MORE FOR RETIREMENT

It’s no secret that Americans are not saving enough for retirement. The U.S. Government Accountability Office (GAO) recently reported that 48 percent of households aged 55 and over have no retirement savings.

To address this issue, a new retirement-related bill is making its way through Congress, The Setting Every Community Up for Retirement Enhancement (SECURE) Act. Its purpose is to help Americans save more for retirement by creating new rules to expand and preserve retirement savings, improve the administration of retirement plans, provide additional benefits and create revenue provisions. Highlights of the Act include:

Increase Auto Enrollment Safe Harbor Cap

Qualified automatic enrollment arrangements (QACAs) would be able to auto increase employee deferrals up to 15 percent instead of the currently required 10 percent cap.

Pooled Employer Plans (aka Open MEPs)

The legislation will allow for a new type of plan whereby unrelated employers could pool their resources to optimize buying power in a new type of plan called a “pooled employer plan” (PEP). By and large, the PEP is what was previously referred to as an open multiple employer plan (open MEP). Open MEPs were an issue that PEPs are designed to remedy. PEPs would be treated as a single plan under ERISA. The legislation also purports to eliminate the “one bad apple” rule whereby the qualification issue of one adopting employer would not taint the qualified status if the entire PEP for the remaining adopting employers.

 

Increase Credit Limit for Small Employer Plan Start-Up Costs

To make it more affordable for small businesses to implement retirement plans, the legislation will increase the credit for small businesses by changing the calculation of the flat dollar amount limit on the credit to the greater of (1) $500 or (2) the lesser of (a) $250 multiplied by the number of non-highly compensated employees of the eligible employer who are eligible to participate in the plan or (b) $5,000. The credit applies for up to three years.

 

Child Birth or Adoption Withdrawals

The SECURE Act would allow participants to take up to $5,000 from their plan or IRA for birth, or adoption, related expenses incurred within a year of the action. These could be taken on a penalty-free basis.

 

Small Employer Automatic Enrollment Credit

The legislation will create a new tax credit of up to $500 per year to small employers to provide for startup costs for new 401(k) plans and SIMPLE IRA plans that include automatic enrollment.

 

Allowing Long-Term and Part-Time Workers to Participate In 401(k) Plans

Under current law, employers are not required to include part-time employees (those working less than 1,000 hours per year) in their defined contribution plan. The legislation will require employers maintaining a 401(k) plan to have at least a dual eligibility requirement under which an employee must complete either one year of service (with the 1,000-hour rule) or three consecutive years of service where the employee completes at least 500 hours of service, except in the case of collectively bargained plans. For employees that are eligible based solely on the second new rule, employers may exclude those employees from testing under the nondiscrimination and coverage rules and from the application of top-heavy rules. In addition, those employees that are eligible based solely on the second new rule may be excluded from employer contributions.

 

Other Changes

Other changes such as increased filing failure penalties, PBGC premiums, 529 plans, some tax implications to certain identified individuals, and church plans are also included in the legislation.

 

It’s important to note that the SECURE Act is not yet finalized and has not been signed into law. As always, we will stay abreast of the legislation and will inform you when any significant changes are made.

HEY JOEL!

Welcome to Hey Joel! This forum answers plan sponsor questions from all over the country by our in-house former practicing ERISA attorney.

Hey Joel,

One of my current employees recently received a notice from Social Security saying that they might be entitled to a retirement benefit. Is it my responsibility to track this money down? – Investigating in Illinois

 

Dear Investigating,

Employers are required to file Form 8955-SSA with the IRS each year to report former participants with balances remaining in the plan. The information is provided to the Social Security Administration, which in turn notifies retirees of benefits.

While the form does allow employers to “un-report” these participants once they take distributions, it is common practice to only list newly terminated employees without ever removing those who have received their benefits.

I suspect that the employee in question here recently filed a claim for Social Security benefits and that the Social Security Administration (SSA) sent them a letter stating that they MAY be entitled to pension benefits under the plan. But, I also suspect that the plan paid the employee their account balance back when they terminated employment. But, without clear records showing that the employee already received their benefits, it may be difficult for the employer to convince the employee that the letter they received from the SSA is incorrect.

So, what is an employer to do? Here are my general thoughts.

  1. Check and see if someone at the employer has kept Form 1099Rs for plan distributions.
  2. Check with the prior recordkeepers and see if they still have any participant records for the plan that would show distributions.
  3. I don’t think the Form SSA is available to look up online, and as noted earlier, most employers do not “un-report” participants after they have received their benefits. But, if the employer does have past Form SSAs they can access, it would not hurt to at least take a look and see if the form lists previously reported participants who have received their benefits.
  4. If the employer cannot come up with any records that show the employee previously received their benefits from the plan, the employer could advise the employee that a) the employer has no records showing that the employee is owed money from the plan, b) they may have been listed on a Form SSA way back in 2003 showing that they had an account balance under the plan, and c) the employee likely previously received their benefit from the plan sometime following termination of employment. The employer should include a copy of the plan’s SPD along with the following note: “Attached is a copy of the plan’s Summary Plan Description, which includes a description of the plan’s claims procedure. The claims procedure outlines what the plan requires for you to file a claim and information on where to file, what to file, and who to contact if you have questions.”
  5. Going forward, the employer should put in place a system to retain all participant distribution forms and Form 1099Rs.

 

Dispelling Scrutinizing,

Joel Shapiro

 

About Joel Shapiro, JD, LLM

As a former practicing ERISA attorney Joel works to ensure that plan sponsors stay fully informed on all legislative and regulatory matters. Joel earned his Bachelor of Arts from Tufts University and his Juris Doctor from Washington College of Law at the American University.

PARTICIPANT CORNER: SUMMER HOMEWORK FOR PARTICIPANTS

This month’s employee memo gives participants “Summer Homework” encouraging them to do routine checks on their plan details to ensure that everything is in line. Download the memo from your Fiduciary Briefcase at fiduciarybriefcase.com and distribute to your participants. Please see an excerpt below.

Summer can serve as a preview of your retirement — long days in the sun and spending time with your loved ones!  So, what better time to do a routine check-up on your retirement plan! Protect your loved ones and ensure you are keeping up to date with your retirement plan with our summer homework assignments!

 

Update/Assign Beneficiaries

Did you experience a major life change this year, such as marriage, divorce, birth or death? It’s important to consider updating your beneficiaries when you go through a major life change.

 

Review cyber Security Best Practices

Retirement plans are a major target for cyber attacks. Retirement plan participants often have weak passwords and can unknowingly fall for phishing schemes. It’s important to educate yourself on cyber security best practices to ensure you are keeping your information and assets safe.

 

Increase Contribution

Raise your contributions once a year by an amount that’s easy to handle, on a date that’s easy to remember – for example, 2 percent every Fourth of July. Thanks to the power of compounding (the earnings on your earnings), even small, regular increases in your plan contributions can make a big difference over time.

 

Revisit Asset Allocation

Rebalance your portfolio back to the original asset allocation that took into account your risk tolerance and time horizon, this ensures you adhere to your investment strategy. You rebalance by selling assets that make up too much of your portfolio and use the proceeds to buy back those that now make up too little of your portfolio.

 

Remember Sunscreen!

Wearing sunscreen reduces your risk of developing skin cancer, it keeps your skin looking younger and protects you from UVB rays. What other reasons do you need to wear it?

DISCLOSURE INFORMATION

Please remember that past performance may not be indicative of future results.  Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Lutz Financial (“Lutz”), or any non-investment related content, made reference to directly or indirectly in this newsletter will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful.  Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this newsletter serves as the receipt of, or as a substitute for, personalized investment advice from Lutz.  To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing.  Lutz is neither a law firm nor a certified public accounting firm and no portion of the newsletter content should be construed as legal or accounting advice.  A copy of the Lutz’s current written disclosure Brochure discussing our advisory services and fees is available upon request. Please Note: If you are a Lutz client, please remember to contact Lutz, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. Lutz shall continue to rely on the accuracy of information that you have provided.

For more important disclosure information, click here.

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VIEW MODIFIED SUMMER HOURS HERE

OMAHA

13616 California Street, Suite 300

Omaha, NE 68154

P: 402.496.8800

HASTINGS

747 N Burlington Avenue, Suite 401

Hastings, NE 68901

P: 402.462.4154

LINCOLN 

601 P Street, Suite 103

Lincoln, NE 68508

P: 531.500.2000

GRAND ISLAND

3320 James Road, Suite 100

Grand Island, NE 68803

P: 308.382.7850

Being Mindful of the Social Security Tax Torpedo & Medicare Surcharges

Being Mindful of the Social Security Tax Torpedo & Medicare Surcharges

 

LUTZ BUSINESS INSIGHTS

 

being mindful of the social security tax torpedo & medicare surcharges

nick hall, investment adviser

 

Social Security and Medicare are programs often at the forefront of retirees’ minds. The claiming strategies and rules can be very confusing for the average person. To complicate matters, timing decisions on claiming Social Security retirement benefits coupled with the withdrawal strategy decisions from an investment portfolio impact the amount of Social Security benefits that are taxed. In a related manner, higher income households need to be mindful of Medicare surcharges on Part B and Part D when going about determining withdrawal strategies in retirement.

Taxation of Social Security Benefits

The Social Security system is such a generous program that they tax people twice– pay/benefits are taxed on the way in (wages) and taxed upon receipt later in life. Jokes aside, under current law as little as 0% of retirees’ benefits are taxable but as much as 85% of retiree benefits are taxable for higher income households. However, a large portion of people fall somewhere in between in which some of their Social Security benefits are taxed but not the entire 85%. There is a calculation called provisional income which is used to calculate the amount or percentage of Social Security benefits that are taxable. Other income sources such as interest, dividends from investments, capital gains, rental income, pensions, IRA distributions, etc. affect this provisional income number.

It is in this range where William Reichenstein and William Meyer, head of research and CEO of Social Security Solutions, respectively, say people need to have an awareness of the self-coined phrase “tax torpedo”. The “tax torpedo” refers to the sharp rise and fall in marginal tax rates caused by taxation of Social Security benefits. I will highlight the “tax torpedo” in action in a hypothetical example below:

Sam and Sally Smith: Born in 1953 (Turn 66 this year), $50,000 of combined Social Security benefits, $15,000 of dividends from taxable investments, Sally $5,000 of pension income, and $30,000 of capital gains.

With the additional 50,000 of income and using the provisional income calculation, only $21,500 or 43% of Sam and Sally’s $50,000 annual Social Security retirement benefits are taxable. Assuming they filed the standard deduction, they would have an approximate taxable income of only $45,000 which places them in the middle of the 12% marginal Federal tax bracket. Even though they had $100,000 of income from Social Security and other sources, less than half of Social Security benefits would be subject to Uncle Sam. In fact, Sam and Sally could have up to $92,000 of other income (assuming the same $50,000 of annual Social Security) before the full 85% of Social Security benefits are taxable.

The Tax Torpedo in Action

People can get into trouble with respect to the “tax torpedo” when it comes to their withdrawal strategy from the investment portfolio during the distribution phase in retirement. In the above example, Sam and Sally might think it is a good idea to leak some money out of their traditional rollover IRA that came from an old employer’s 401(k) plan. On the surface, it appears they can take another $30,000+ out of the IRA each year and stay in the 12% Federal income tax bracket. However, what people fail to realize is that adding additional income from other sources inadvertently causes more of Social Security benefits to be taxable and increases the marginal tax rate of the transaction.

In Sam and Sally’s example, an extra $30,000 IRA distribution would cause $15,000 more of Social Security benefit taxation or a total of $36,500 to be taxable in that year. Sam and Sally’s new taxable income would be virtually doubled at approximately $90,000. More importantly, this creates about $12,500 in income that is now taxed at the 22% Federal bracket versus the much lower 12% Federal bracket. Assuming Sam and Sally are Nebraska residents and using a 6% Nebraska state tax, they added roughly $9,350 of additional income tax by innocently trying to leak out $30,000 from their pre-tax IRA while they were in a low tax bracket. Further, the tax torpedo doesn’t additionally adversely affect those whose high income already places them in a situation in which the maximum 85% of Social Security benefits are taxable.

Medicare Surcharges

For higher-income households in retirement, the acceptance of the full 85% of Social Security benefits being subject to tax is simply the reality. Another important concern begins to creep in for people who are over 65 and on Medicare. This concern relates to the income limits associated with Medicare Part B and Part D. A majority of the population will pay $135.50 per month for Medicare Part B premiums. However, high income households with modified adjusted gross income (MAGI) of over $170,000 for married filers ($85,000 for single filers) must begin paying an Income Related Monthly Adjustment Amount (IRMAA) or Medicare premium monthly surcharge. For Medicare purposes, income from two years prior affects the current years’ Medicare Part B premiums. The chart below details the Medicare Part B premiums based on income:

 

If your yearly income in 2017 (for what you pay in 2019) was You pay each month (in 2019)
File individual tax return File joint tax return File married & separate tax return
$85,000 or less $170,000 or less $85,000 or less $135.50
above $85,000 up to $107,000 above $170,000 up to $214,000 Not applicable $189.60
above $107,000 up to $133,500 above $214,000 up to $267,000 Not applicable $270.90
above $133,500 up to $160,000 above $267,000 up to $320,000 Not applicable $352.20
above $160,000 and less than $500,000 above $320,000 and less than $750,000 above $85,000 and less than $415,000 $433.40
$500,000 or above $750,000 and above $415,000 and above $460.50

Source: https://www.medicare.gov/your-medicare-costs/part-b-costs

 

As you can see, the highest income households end up paying $325/month more per individual for Medicare premiums. This equals $7,800 annually per married couple. Even the first jump represents a $1,296 increase in Medicare Part B premiums for a married couple. Unlike Social Security, Medicare surcharges are a cliff and the surcharges will be charged even if you exceed the MAGI threshold by $1. In addition to Medicare Part B, Medicare Part D (or Prescription Drug Coverage) includes a monthly surcharge as seen in the chart below:

 

If your filing status and yearly income in 2017 was
File individual tax return File joint tax return File married & separate tax return You pay each month (in 2019)
$85,000 or less $170,000 or less $85,000 or less your plan premium
above $85,000 up to $107,000 above $170,000 up to $214,000 not applicable $12.40 + your plan premium
above $107,000 up to $133,500 above $214,000 up to $267,000 not applicable $31.90 + your plan premium
above $133,500 up to $160,000 above $267,000 up to $320,000 not applicable $51.40 + your plan premium
above $160,000 and less than $500,000 above $320,000 and less than $750,000 above $85,000 and less than $415,000 $70.90 + your plan premium
$500,000 or above $750,000 and above $415,000 and above $77.40 + your plan premium

Source: https://www.medicare.gov/drug-coverage-part-d/costs-for-medicare-drug-coverage/monthly-premium-for-drug-plans

Two-Year Lookback and Request for Reconsideration of IRMAA Charges

The two-year lookback with respect to income can cause many people to pay high Medicare surcharges when initially going onto Medicare or certain times during retirement. However, the Social Security Administration is surprisingly forgiving when it comes to appealing these higher rates if there has been a significant life event that happened to give cause to an income spike or a reduction of income going forward like a sale of a business, inheritance, employer stock grants or deferred compensation, retirement, death of a spouse, etc. If you have had one of these major life events and now have a much lower income, it is most likely worth filing a request for reconsideration.

Planning for Tax Torpedo and Medicare Surcharges

An important tax planning strategy that we recommend to clients is Roth IRA conversions, the act of purposely moving money from Traditional IRAs to Roth IRAs. A great opportunity to do this is when people are in the first few years of retirement or what I call the “retirement income gap”, the time period before taking Social Security benefits or being required to take minimum distributions from pre-tax IRAs. The effectiveness of this strategy depends on delaying Social Security benefits and before RMDs happen at age 70 ½ to maximize lower tax brackets while not having to worry about the tax torpedo.

Because the Medicare surcharges are implemented on a cliff schedule, it becomes critically important to plan around this when possible during the distribution phase or determining a portfolio withdrawal strategy. Those with large pre-tax IRAs and big RMDs at age 70 ½, very large taxable accounts, pensions, rental income, or other higher ordinary income can be pushed into Medicare surcharge areas. Utilizing Roth IRA conversions and other tax strategies to accelerate income while people are in low tax brackets is a great solution to lower future income and manage Medicare surcharge cliffs. This can not only protect them against future tax rate increases but it can help minimize taxes at age 70 ½ and lower RMDs which kick off income that may adversely affect tax rates or Medicare premium surcharges.

The presence of the tax torpedo of Social Security benefits and Medicare premium surcharges add an extra layer of complexity for people in retirement. Developing a disciplined retirement withdrawal strategy and advanced planning can lower overall taxes during retirement by lessening the impact of the tax torpedo or helping avoid Medicare premium surcharges. As always, please consult with your CPA about any complex tax related question regarding these topics.

ABOUT THE AUTHOR

402.827.2300

nhall@lutz.us

LINKEDIN

NICK HALL, CFP® + INVESTMENT ADVISER

Nick Hall is an Investment Adviser at Lutz Financial with over eight years of industry experience. He specializes in comprehensive financial planning and investment advisory management services.

AREAS OF FOCUS
  • Financial Planning
  • Investment Advisory Services
  • Retirement Planning
  • Income Tax Planning
  • Social Security and Medicare Planning
  • Education Planning
  • Investment Product Research
  • Small Business Owners
  • High Net Worth Families in Transition
AFFILIATIONS AND CREDENTIALS
  • Financial Planning Association of Nebraska, Member
  • Certified Financial Planner
EDUCATIONAL BACKGROUND
  • BSBA in Finance and Business Management, Eller College of Management - University of Arizona, Tuscon, AZ
COMMUNITY SERVICE
  • Mount Michael Benedictine, Alumni Board President-Elect
  • Lutz Gives Back, Committee member
  • United Way, Volunteer
  • Salvation Army, Volunteer
  • Omaha Home For Boys, Volunteer
  • Susan G. Koman Race for the Cure, Volunteer

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VIEW MODIFIED SUMMER HOURS HERE

OMAHA

13616 California Street, Suite 300

Omaha, NE 68154

P: 402.496.8800

HASTINGS

747 N Burlington Avenue, Suite 401

Hastings, NE 68901

P: 402.462.4154

LINCOLN 

601 P Street, Suite 103

Lincoln, NE 68508

P: 531.500.2000

GRAND ISLAND

3320 James Road, Suite 100

Grand Island, NE 68803

P: 308.382.7850

Lutz Financial adds Joe Carlson

Lutz Financial adds Joe Carlson

 

LUTZ BUSINESS INSIGHTS

 

Lutz Financial adds Joe Carlson

Lutz, a Nebraska-based business solutions firm, welcomes Joe Carlson to its Omaha office’s financial division.

Joe joins Lutz Financial as a Financial Planner. He is responsible for assisting Lutz Financials’ advisers in the preparation of financial plans, as well as managing daily service requests from clients. Carlson received his Bachelor’s degree in business administration with a focus in finance from the University of Nebraska at Lincoln.

 

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Toll-Free: 866.577.0780  |  Privacy Policy

All content © Lutz & Company, PC

VIEW MODIFIED SUMMER HOURS HERE

OMAHA

13616 California Street, Suite 300

Omaha, NE 68154

P: 402.496.8800

HASTINGS

747 N Burlington Avenue, Suite 401

Hastings, NE 68901

P: 402.462.4154

LINCOLN 

601 P Street, Suite 103

Lincoln, NE 68508

P: 531.500.2000

GRAND ISLAND

3320 James Road, Suite 100

Grand Island, NE 68803

P: 308.382.7850

Socially Responsible and Environmentally Sustainable Portfolios

Socially Responsible and Environmentally Sustainable Portfolios

 

LUTZ BUSINESS INSIGHTS

 

socially responsible and environmentally sustainable portfolios

jim boulay, lutz financial investment adviser & managing member

 

An increasing number of investors are looking for ways to align investment decisions with their own values and philosophies. As a citizen, you can express your political preferences around sustainability and other social issues through the ballot box. As an investor, you can express your preferences through participation in global capital markets. Socially Responsible Investing or “SRI,” is an investment strategy that allocates your dollars consistent with your beliefs and ideals.

SRI considers investors’ tastes and preferences about social issues in the design of an investment portfolio. There are a few different types of SRI investments, those that are environmentally conscious, those that are socially responsible and those that are may be consistent with religious beliefs. While some of these philosophies can be isolated, many are now combined into a general investment category called “ESG” investing. This combines social, environment and governance investing into one.

 

Who Practices SRI/ESG?

Several trends have driven SRI/ESG over the past decade. These include rising institutional and investor demand, legislative mandates for public funds, regulatory developments, the rise in environmentally themed offerings, increased shareholder advocacy, and the growth of community investing.

SRI/ESG is an investment approach available to anyone who wants to align their principles and beliefs with their financial future. If you seek a financial gain coupled with the opportunity to leave a positive mark on the environment or valued organizations, this strategy will suit your investing needs. With many financial institutions globally beginning to offer these services, it’s becoming a widely acceptable and even preferred way for investors to manage their money.

 

How Does Lutz Financial Offer SRI/ESG Services?

At Lutz Financial, we partner with Dimensional Fund Advisors to offer two types of portfolio styles to accommodate investor preference. The first are Social Core Equity portfolios, both domestically and internationally. These portfolios offer broadly diversified equity market portfolios that exclude companies that have a certain percentage of business in the following:

  • Abortion
  • Adult Entertainment
  • Alcohol
  • Child Labor
  • Contraceptives
  • Gambling
  • Stem Cell
  • Tobacco
  • Landmines
  • Companies with Businesses in Sudan

Even with the exclusions, these funds offer a broadly diversified portfolio amongst many different types and sizes of equities. As of June 2019, the US Social Core Equity 2 Portfolio (DFUEX) offered more than 2,300 domestic equities within its holdings. The DFA International Social Core Equity Portfolio (DSCLX) contained more than 4,500 globally diversified stocks within its portfolio. These social portfolios even extend into Emerging Markets via the DFA Emerging Markets Social Core Portfolio (DFESX). This fund contains more than 4,200 holdings as of June 2019. Lutz Financial combines these offerings to build clients’ global portfolios cost-effectively and diversified with more than 11,000 different companies.

Those investors looking for environmental impact investing are served using the DFA Sustainability portfolios. Lutz Financial’s use of the DFA sustainability strategies allows for systematic evaluation across industries on key issues, such as concerns of high greenhouse gas emissions or potential emissions from reserves of fossil fuels such as coal, oil, and natural gas.  In addition, the portfolios consider other factors important to those investors seeking to invest in sustainable companies such as:

  • Land use
  • Biodiversity
  • Involvement in Toxic Spills or Releases
  • Operational Waste
  • Water Management
  • Factory Farming
  • Cluster Munitions
  • Child Labor

Lutz Financial does not regard SRI or ESG portfolios as separate asset classes, but as an alternative framework for investing in conventional asset classes.  With this framework in mind, our approach centers on structuring portfolios to capture dimensions of higher expected returns. This is done in a cost-efficient, diversified way, all while applying a meaningful screening methodology that reflects a broad set of investors’ social and/or environmental concerns.

 

In short, bringing a positive change the organizations important to you through investments is becoming an increasingly popular way for people to support their values without having to sacrifice diversification or adequate returns. If you would like to learn more about the SRI or ESG offerings through Lutz Financial, please contact us or learn more here.

ABOUT THE AUTHOR

402.827.2300

jboulay@lutzfinancial.com

LINKEDIN

JIM BOULAY, CPA/PFS, CFP®, CAP® + INVESTMENT ADVISER, MANAGING MEMBER

Jim Boulay founded Lutz Financial in 2001 and has over 29 years of experience in financial consulting and accounting. His responsibilities include both comprehensive financial planning and investment advisory services.

AREAS OF FOCUS
  • Financial Planning
  • Investment Advisory Services
  • Business Owners & Families in Transition
AFFILIATIONS AND CREDENTIALS
  • American Institute of Certified Public Accountants, Member
  • Financial Planning Association, Member
  • Certified Public Accountant
  • Personal Financial Specialist
  • Certified Financial Planner™
  • Chartered Advisor in Philanthropy
EDUCATIONAL BACKGROUND
  • BSBA in Accounting, University of St. Thomas, St. Paul, MN
COMMUNITY SERVICE
  • Catholic Charities Endowment Committee, Treasurer
  • Christ Child Society, Past President
  • Omaha Estate Planning Council, Member

SIGN UP FOR OUR NEWSLETTERS!

We tap into the vast knowledge and experience within our organization to provide you with monthly content on topics and ideas that drive and challenge your company every day.

Toll-Free: 866.577.0780  |  Privacy Policy

All content © Lutz & Company, PC

VIEW MODIFIED SUMMER HOURS HERE

OMAHA

13616 California Street, Suite 300

Omaha, NE 68154

P: 402.496.8800

HASTINGS

747 N Burlington Avenue, Suite 401

Hastings, NE 68901

P: 402.462.4154

LINCOLN 

601 P Street, Suite 103

Lincoln, NE 68508

P: 531.500.2000

GRAND ISLAND

3320 James Road, Suite 100

Grand Island, NE 68803

P: 308.382.7850