Retirement savings accounts FAQs

Retirement Savings Account FAQs for Troupe Beauty Scouts

 

We are so excited to have you join our Troupe platform and start your journey towards holistic beauty – physical, mental and financial health and sustainability. Let’s get your retirement savings jump started! Through our partnership with Beacon Pointe Wealth Advisors, each Troupe Scout (you!) has the ability to setup a retirement account that is all your own. [AHW1]

 

Troupe has employed you as a 1099 independent contractor. This means Troupe is not able to directly fund your retirement account; however, Troupe can provide each Scout with a “Savings Bonus” [AHW2] based on commission structures that Scouts, on their own volition, can invest/put toward their retirement account. Bear in mind that you (not Troupe) have to open your retirement account independently which can be done in a few easy steps.

 

For many of you, this might be your first interaction with a financial advisor and potentially your first savings/investment account. That’s great! Below are all the Frequently Asked Questions (FAQ’s) we often get from Scouts about setting up a retirement savings account and how you as a Scout will be able to use it. We recommend going through each FAQ Section in chronological order – you’ll be a retirement saving whiz by doing so!

 

FAQ Sections:

  1.     Overview
  2.     Getting Started
  3.     Opening My Retirement Savings Account
  4.     Interacting with the Investment Platform & Money Movements
  5.     Advisory Services Info, etc.
  6.  

What should I expect?

 

Now that you are a Scout with Troupe Beauty, you have the opportunity to open a retirement savings account to support your financial future. Troupe was founded on the principle that beauty and wellness is incomplete without financial empowerment and aptitude.

 

Troupe Scouts have a unique code from Beacon Pointe (provided in FAQ Section 3) that you will use to help open your personal retirement account. Your retirement savings account portfolio is managed by Beacon Pointe Wealth Advisors through the Charles Schwab Intelligent Portfolio technological platform.

 

Once you log in, you will be asked to complete a short questionnaire called a risk assessment that tells us about your financial goals, risk tolerance and timeline. When you eventually have saved up to $5,000 within your retirement savings account on the platform, your hard earned $$$ will automatically be invested into the portfolio that best aligns with your answers for risk/return appetite (more on this later).  

 

What’s a risk assessment?

 

A risk assessment is the name of a short questionnaire that determines your comfort of investing in something that has the potential for loss. Assessing your tolerance for risk is an important step in determining how your portfolio should be allocated so you can stay invested even when the market declines. Typically, young investors are comfortable taking on risk since they have a longer time horizon to recover from volatile market environments (potential losses) as compared to someone older where a sudden market decline could affect their ability to retire.

 

When you setup your retirement account with Beacon Pointe via the Charles Schwab Intelligent Portfolio Platform, you will fill out a questionnaire that will determine your risk tolerance based on your financial situation and goals.

 

What’s a market cycle?

 

A full market cycle must include the market going up (bull) and going down (bear). Usually a full market cycle is approximately 3-7 years, however, in recent times (as of 2020) we have seen the longest bull market in history. Throughout the market cycle, there can be periods of volatility, which is uncertainty in future market movements and often results in the market going up and down over short periods of time. Remember, when investing in the stock market, it’s a long-term game!

 

What is the role of a financial advisor?

 

A financial advisor is a professional who helps individuals manage their finances by providing advice on money issues, such as budgeting, investments, insurance, debt, college savings, estate planning, taxes, retirement planning, etc. A financial advisor is there to guide you as you make financial decisions. The cool thing? You don’t need a lot of money to have one.

 

What’s a custodian?

 

A custodian is a financial institution that holds customers’ securities (stocks and bonds) for safekeeping from fraudsters. Charles Schwab is the custodian that holds, monitors and insures your funds.

 

Who all is involved?

 

Charles Schwab and Beacon Pointe Advisors work hand-in-hand to create a positive service experience for you. Your financial advisor is Beacon Pointe Advisors – an incredible and talented wealth advisory firm that takes a holistic approach to financial planning with a dedicated focus to serving women and next-generation investors. You can learn more about them at www.BeaconPointe.com. Through Beacon Pointe you are able to setup up your retirement savings account and invest your $$$, but your money is being securely stored and protected through the custodian Charles Schwab. Charles Schwab provides the software around Beacon Pointe’s carefully selected and monitored money managers and strategies that make up your custom investment portfolio that are accessible to you through your affiliation with Troupe.

 

What’s Beacon Pointe Advisors and Troupe Beauty’s relationship?

 

Troupe Beauty’s mission, values and vision resonate deeply with the advisors of Beacon Pointe. The idea to teach and empower young women about beauty and financial education should be fun, approachable and inspiring – everyone should be financially confident to achieve their best selves – a vision shared by Beacon Pointe. Together, our partnership allows the Scouts of Troupe to kick-off their retirement savings early with Beacon Pointe.  

 

How is my portfolio setup?

 

Your portfolio is divided into asset classes including stocks, bonds, potentially alternatives, and cash equivalents. The risk assessment you fill out when setting up your retirement account will identify the proper portfolio allocation relative to your appetite for risk. From there, it is up to you whether you wish to invest in a Traditional Investment Portfolio or Socially Responsible Investing (SRI) Portfolio.

 

What does SRI mean?

 

SRI stands for Socially Responsible Investing. SRI actively eliminates or selects investments according to specific motives such as personal values, and political or religious beliefs. The goal of SRI is to allow an investor to invest in companies that positively impact society and the world at large (and avoiding things like guns, tobacco, oil, etc.). Keep in mind if you engage in SRI, making a profit is still important, however, investment options are more limited.

 

Does Troupe Beauty make money off of my retirement fund?

 

Nope. Troupe is actually working with you to make sure retirement can become a reality. In no way does Troupe control or profit off of your retirement savings account. Also, Troupe can’t view your account balance or how it is allocated. That’s your business!

 

What type of retirement savings account can/should I open?  

 

If you are uncertain about retirement savings plans, this Beacon Pointe overview video will help fix that!

 

The Beacon Pointe investment platform allows you to open all kinds of investment accounts – both retirement and non-retirement. Regarding retirement accounts, below are your options. All data points are current as of 2020.

 

Traditional IRA (Individual Retirement Account)

 

  • Maximum Annual Contribution Limit: 100% of earnings (including bonuses) up to a maximum of $6,000.
  •  
  • Age You Can Access Funds without Pre-Mature Withdrawal Penalty (without meeting any exception): 59½.
  •  
  • Benefits: You can invest pre-tax dollars, but pay taxes when money is taken out (a viable option if you think you are making more money now than you will be in the future).
  •  
  • Other Considerations:
  •  
    • Potential exceptions to the withdrawal penalty include age, death, disability, qualified first-time homebuyers up to $10,000, qualified higher education expenses, and medical.
    • Must make less than $65,000 (single) or $104,000 (married) if you have a 401(k) plan through your employer in order for contributions to be tax deductible.
    •  

Roth IRA

 

  • Maximum Annual Contribution Limit: $6,000
  •  
  • Age You Can Access Funds without Pre-Mature Withdrawal Penalty: You can withdraw your original contributions from your Roth IRA at any age without taxes or penalties. However, if you withdraw the investment gain from your Roth IRA before you’ve had the Roth IRA for five years and without one of the qualified exceptions, taxes and a 10% penalty will apply.
  •  
  • Benefits: Your contributions can be withdrawn tax-free at any time and distributions of earnings might also be tax free when you hit the age of 59½, or if one of the qualified exceptions apply.
  •  
  • Other Considerations:
  •  
  • Potential exceptions to the withdrawal penalty include age, death, disability, qualified first-time homebuyers up to $10,000, qualified higher education expenses, and medical.
    • Must make less than $122,000 (single) or $193,000 (married) if you have a 401(k) plan through your employer in order for contributions to be tax deductible.

 

SEP-IRA (for self-employed individuals, including 1099 Contractors)

  •  
  • Maximum Annual Contribution Limit: $57,000 or up to 20% or 25% of an employee’s compensation, depending on business entity.
  •  
  • Age You Can Access Funds w/out Pre-Mature Funds Withdrawal Penalty: 59 ½.
  •  
  • Benefits: You can invest pre-tax dollars, but pay taxes when money is taken out (a viable option if you think you are making more money now than you will be in the future).
  •  
  • Other Considerations:
    •  
    • Convenient for small businesses because they are low cost and simple to maintain.
    • To be eligible for a SEP-IRA you must be 21 years of age, have been employed at least three years and have $600 minimum of compensation.

 

SIMPLE IRA (for self-employed individuals, including 1099 Contractors)

  •  
  • Maximum Annual Contribution Limit: $13,500
  •  
  • Age You Can Access Funds without Pre-Mature Withdrawal Penalty: 59½.
  •  
  • Benefits: You can invest pre-tax dollars, but pay taxes when money is taken out (a viable option if you think you are making more money now than you will be in the future).
  •  
  • Other Considerations:
    •  
    • Convenient for small businesses because they are low cost and simple to maintain.
    • To be eligible for a SIMPLE IRA, employees are expected to receive at least $5,000 in compensation this year.

 

To learn more about:

 

If I have an existing retirement account, can I transfer funds?

 

Most likely. As long as you are no longer working with your previous employer, you have ability to transfer existing retirement funds (like a previous 401(k)) to a Rollover IRA account. To do this, please call Beacon Pointe at 949-718-1600 for specific instructions.

 

If I am under the age of 18, can I open a retirement savings account?

 

Unfortunately, you cannot open a retirement account under the age of 18. However, there are two types of investment accounts available to minors: a UTMA or a UGMA. To learn more about a UTMA, click here. To learn amore about a UGMA, click here.

 

Should I invest in my retirement or pay off my debt first?

 

The number one priority for anyone is paying off bad debts first like credit card debt, followed by establishing an adequate emergency fund, and then saving for retirement. If you think about it, say your monthly credit card debt interest in 9%, and your portfolio is making 8%…you’re losing 1%. It is best to pay off bad (high interest) debt before anything else. Once you have paid off your debt and created your emergency fund, then you can start saving for retirement and begin to make sense of account types, tax implications, employer contributions etc.

 

Any other tips for me as a first-time investor?

 

You can check on your Beacon Pointe retirement savings account portfolio at any time on any device via the mobile/tablet app. As good as 24-7-365 access is, we strongly recommend that you only check on your portfolio about once a quarter. If you find yourself checking your portfolio every day it is easy to become overwhelmed or frustrated because you haven’t hit your goal, or your investment is not doing as well as you hoped.

 

Take yourself off the emotional investing rollercoaster and let your money work for you. Remember, the dollars you invest today for retirement are in it for the long haul – the market will go up and down many times throughout market cycles, but compounding interest plus your continual (large or small) contributions to your savings, over time, will work in your favor and build up that retirement nest egg. Keep the faith!

 

GETTING STARTED

 

What information do you need for me to open a retirement account?

 

In order to open and setup your retirement account, you will need to provide some personal information – the following will be needed to complete your registration and build your investor profile.

  •  
  •       Name
  •       Email Address
  •       Social Security Number
  •       Date of Birth
  •       Legal/Residence Address
  •       Phone Number
  •       Beacon Pointe Advisors Identifier Program Code: Y4C9

 

Be prepared to create a Login ID and password that contains at least 8 characters, including 1 number and 1 letter. You will also be required to choose a security question. You will also need to provide your employment status and general financial details including your annual income and liquid net worth (approximate what you own less what you owe). You will then be asked a series of disclosure ‘yes or no’ questions in order to determine if you are affiliated with the stock exchange, FINRA or municipal securities, etc. It will also ask if you would like to add a trust contact person. Finally, you will be asked to verify your identity.

 

For additional information, visit https://beaconpointe.com/troupe-beauty-open-an-account/ a step-by-step Account Setup Instruction Guide, click here[AHW4] .

 

Is my information secure?

 

Absolutely. When you create your retirement savings account, you are the only one who controls passwords, logins, and all money movement to, from and within the account.

 

What are Troupe’s terms for opening a retirement fund?

 

There are no terms mandated by Troupe or Beacon Pointe – creating your retirement account and investing for your long-term financial future is 100% up to you. As part of its ethos for holistic beauty, Troupe strongly recommends that Scouts open a retirement account upon joining the Troupe Beauty brand. The goal is for Scouts to begin investing in themselves by starting to save for retirement early. Troupe has partnered with Beacon Pointe to provide their Scouts the opportunity to open an investment portfolio in which Scouts can direct their bonus money toward to begin saving for retirement. This isn’t required, but it is a smart move, especially at a young age by kicking off your financial saving early!

 

How much should I invest? How much money do I need to open my account?

 

In order for your portfolio to be invested, you need to have a minimum of $5,000 in the account. However, you can open your retirement savings account with less. Ultimately, it is up to you how much you decide to invest and most likely you will build your way up to $5,000. Just know that your money will not be invested until you reach $5,000. Until then, we recommend you work up to that $5,000 starting point by adding in your earnings you get from Troupe and any other funds you feel comfortable putting away for saving for retirement!

 

Check out this Beacon Pointe video on the 50-30-20 Savings Rule of Thumb.

 

Can I contribute funds outside of my commissions from Troupe Beauty?

 

Yes! Even though Troupe is helping kick-start your road to retirement, your Troupe “Savings Bonuses” do not have to be the only funds you contribute. If you have other sources of earned income (like wages or 1099 miscellaneous income) and want to direct a portion of these to your retirement fund (staying within retirement plan contribution limits), then by all means go for it! The sooner you hit the $5,000 minimum account size, the sooner your portfolio will get invested and go to work on your behalf.

 

Can I use these retirement funds if I am no longer a Troupe Scout?

 

Yes, if you leave Troupe for any reason, the retirement account is yours forever. Troupe has no ownership over your retirement account. However, you cannot use or access retirement account funds until age 59½ without being penalized by the IRS (some exceptions apply).

 

To learn more about retirement account early withdrawal penalties and/or exceptions, visit https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-tax-on-early-distributions.

 

Can I invite a friend to open a retirement fund? What if my friend is not a Scout?

 

Absolutely! Whether or not your friends are Scouts, all they need is the following link to setup their retirement account with Beacon Pointe: Y4CP

 

OPENING YOUR RETIREMENT SAVINGS ACCOUNT

 

Ok, I am ready to go! How do I open my account?

 

Go to https://beaconpointe.com/troupe-beauty-open-an-account/ and follow this super easy step-by-step Account Setup Instruction Guide, click here[AHW5] …And be sure to use the Beacon Pointe Advisors Identifier Program Code: Y4C9

 

One last important note: even if you do not currently have $5,000 to put in your new retirement savings account, when prompted for how much money you would like to invest, you’ll need to put $5,000 as your minimum amount or the setup system will not let you proceed. Upon the completion of your account setup, you can transfer as much or as little money above or below $5,000 as you wish. Your cash will sit in your retirement savings account until you hit the $5,000 minimum when, at that point, it will automatically invest. Should you immediately meet the $5,000 minimum, your portfolio will invest right away.

 

What happens after I make a deposit into my retirement savings account?

 

As you begin to deposit money, it will sit safely in your account until you reach the $5,000 minimum. The cash in the account will be invested in CDs and other cash-like instruments so it won’t be sitting completely idle. In fact, the money will be earning and adding to the account value, just not as much as when the portfolio is invested. Until then, your goal should be to regularly deposit your Scout “Savings Bonuses” from Troupe Beauty so you can reach the $5,000 investable minimum sooner. You can also of course deposit non-Troupe Beauty money if you wish to invest additional funds in your retirement account, so invest more as you see fit (so long as you follow the mandated IRA contribution limits).

 

What are the minimum contributions to my account?

 

There is no minimum, you can make a contribution as small as $1 or as big as you want (following contribution limits, assuming the contribution is to a retirement account).

INTERACTING WITH THE INVESTMENT PLATFORM & MONEY MOVEMENTS

 

How do I access my online portal?

 

You can access your online account from any device as long as you have Wi-Fi or cell service. You can either log on via the Schwab Intelligent Portfolio website, or you can download the Schwab Intelligent Portfolio app on your smartphone.

How do funds get transferred to my account? Can I link my bank account to my retirement fund? Can I set up reoccurring contributions?

 

Troupe distributes a “Commission” that is automatically deposited into your personal bank account via ACH transfer. From there, you can link your bank to your investment account and setup ACH (automatic) transfers. You can setup one-time or automatically recurring transfers.

 

ADVISORY SERVICES INFO, ETC.

 

What fees can I expect to pay for my retirement fund? And how do I pay them?

 

The advisory fee for the management of your portfolio is a ½ of one percent, in other words 50 basis points (bps). So, in English, this means… if your portfolio is $10,000 Beacon Pointe’s fee would be: $50.

 

Fees are billed quarterly in advance and are automatically deducted from the account so there is nothing you have to do!

 

By partnering with Beacon Pointe, you get the benefit of access to a personal wealth advisor and custom-built portfolios (including Socially Responsible portfolio options) that are monitored on your behalf.

 

Can I adjust my portfolio settings?

 

When you first set-up your account, you take the Investor Profile Questionnaire to determine your financial goals, risk tolerance to market volatility and your time horizon. These, of course, over time may (most likely) change. At any time, you may revisit that same profile questionnaire to change/adjust the way you are approaching your investments. With that said, Beacon Pointe doesn’t suggest doing this very often (every 5-10 years or if a major life event occurs) as each time you do this, your portfolio has to rebalance and it becomes inefficient and elevates exposure to additional market risk if done too often.


Can I specifically choose what investments I would like to be involved in?

 

That is Beacon Pointe’s job! You select the type of portfolio you wish to invest in (traditional or SRI), but Beacon Pointe selects the proper funds and strategies that make up your portfolio’s asset allocation, all designed to align with your financial goals, tolerance for market volatility (risk), etc.

 

How are my retirement savings portfolio projections determined?

 

Your retirement savings portfolio projections are determined by a super high-tech algorithm based from your risk assessment investor profile questionnaire. The entire investment process is automated so the portfolio will rebalance and make adjustments based on this information. Beacon Pointe regularly monitors the portfolio allocations and the investments (the funds and strategies) within your portfolio. It’s not all robots and code – by partnering with Beacon Pointe, you get the benefits of access to a rea-life human wealth advisor and custom-built portfolios (SRI portfolio options, too!).

 

What is rebalancing and what does it do?

 

Once your retirement savings account has hit the $5,000 mark, it will automatically begin investing your portfolio for you. Rebalancing is a process in which the assets within your portfolio are bought or sold to maintain your original desired level of asset allocation (your mix of investments). This process is done automatically so you will not have to lift a finger!

 

Will you submit any tax documents to me?  

 

Upon contributing to your retirement account, you could potentially receive a Tax Form (potentially a 5498 but can vary depending on the type of retirement account) from Charles Schwab documenting your contribution that you can submit to the IRS for a tax break. For more information or specific tax advice, please speak with a CPA or visit https://www.irs.gov/forms-pubs/about-form-5498.

 

Important Disclosure: Beacon Pointe Advisors does not offer legal or tax advice. Please consult with the appropriate tax or legal professional regarding your circumstances. The information set forth herein is for illustrative and informational purposes only and is solely for use only in connection with the purposes for which it is presented. Beacon Pointe has exercised all reasonable professional care in preparing this information. The information has been obtained from sources we believe to be reliable; however, Beacon Pointe has not independently verified, or attested to, the accuracy or authenticity of the information. Nothing contained herein should be construed or relied upon as tax, legal, fiduciary or investment advice. All investments involve risks, including the loss of principal. An investor should consult with their financial professional(s) before making any investment decisions.