Tony Villamil is a nationally recognized business economist, with over thirty-five years of successful career as a senior economist, university Dean and high-level policymaker for both federal and state governments. He has served as US Undersecretary of Commerce for Economic Affairs appointed by President George H.W. Bush with full US Senate confirmation. He is the founder of a successful economic consulting practice, The Washington Economics Group, Inc. (WEG), now in its 21st year of operations. From August 2008 to December 2013, Tony served as Dean and Professor of Economics at the School of Business of St. Thomas University, while continuing to serve as Principal Economic Advisor to the clients of WEG.

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Saving for retirement is a lot more enjoyable when the market goes up. This year, checking your 401k account balance has evoked feelings similar to finding a lump of coal in your stocking. If this feeling strikes you as all too familiar, it’s not your imagination.

According to data from Morningstar, 2015 enjoys the dubious distinction of marking the lowest rolling 15-year average annual rate of return (3.96%) for the U.S. stock market in the last 80 years.

Given the recent lack of support from the markets, it’s no wonder that some are feeling frustrated with their progress toward their retirement saving goals. Let’s take a minute to remember why a 401k program is such a powerful tool to help you overcome challenging markets and accumulate wealth for retirement.

Here are my top 10 reasons to participate in your employer’s 401k plan.

  1. Free money: Most 401k plans offer employer matching contributions. A 50% match is a 50% return on the money you invest that year. Not participating, at least up to the amount of your employer’s matching contribution, is like walking past $20 bills on the sidewalk.
  2. Convenience: Automatic payroll deduction is psychologically the most painless way to save money because of the adage: If you don’t see it, you don’t miss it.
  3. Fantastic tax shelter: Regardless of your income level, a Roth 401k account allows tax-free accumulation of investment earnings for as long as you care to keep your savings in the plan. The younger you are, the more powerful the benefit of tax-free compounding of investment earnings can become.
  4. Up front tax savings: If you are currently in a high tax bracket, money you save in a traditional 401k account reduces the amount of taxable income you report to the IRS. This tax saving should allow you to save more.
  5. Protection from creditors: Federal law makes 401k assets off limits to creditors in case of bankruptcy or liability claim. This is not the case in all states for IRAs. Of course, two creditors that represent an important exception to this rule are an ex-spouse and the IRS.
  6. Lower cost investing: The larger the company, the more likely its 401k plan offers institutional shares of funds with expense ratios that average one-half that of the average retail mutual fund. Even for index investing, an index fund that costs 0.08% to a retail investor is often available within large 401k plans at 0.04%.
  7. Dollar cost averaging: Investing equal amounts every month throughout all market environments is a disciplined investment strategy that counteracts the temptation to buy high and sell low and lowers your average cost, thereby boosting returns.
  8. Auto features: Automatic enrollment, automatic escalation, and automatic investment and rebalancing can make it almost effortless to keep your retirement planning on track.
  9. Estate planning: A Roth 401k account allows you to leave wealth to your heirs income tax-free, and if rolled into a Roth IRA, avoid IRS-required minimum distributions from your retirement savings. Splitting your retirement savings between a traditional and a Roth 401k account allows you to control the amount of taxable retirement income you receive in retirement, which can affect your eligibility for tax-free Social Security benefits.
  10. Lifetime income solutions: The prospect of converting a lifetime of savings into retirement income is a daunting task. Increasingly, 401k plans are offering solutions that provide a simple and cost effective way to turn some or all of your accumulated savings into a monthly check that you cannot outlive.

As difficult as recent market results have made building wealth for retirement, your employer’s 401k plan offers numerous advantages that will help you achieve your goals. Now is good a time to investigate if you are taking full advantage of all the benefits your plan has to offer.

You might also be interested to know that after the two other previous lows in the 15-year rolling period average annual rate of return, 1942 and 1974, the average annual rate of return from the stock market in the subsequent 15 years was well above 10% per year. It is too easy to assume what has transpired recently will continue. History has often proved that assumption wrong.

 

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America and Three Dog Night Come to Lakeland’s Joker Marchant Stadium on Saturday, April 2, 2016 Tickets on Sale Friday, January 22 at 10 a.m. Lakeland, Fla. (January 20, 2016) – Multi-platinum iconic bands America and Three Dog Night come to Joker Marchant Stadium in Lakeland, FL on Saturday, April 2 at 7 p.m. Tickets go on sale Friday, January 22 at 10 a.m.

The year 2015 marks the 45th Anniversary of perennial classic-rock favorite, America. Their best-known tunes, which also include “I Need You,” “Ventura Highway,” “Don’t Cross The River,” “Tin Man,” “Lonely People,” and “Sister Golden Hair” were cornerstones of 1970s Top 40 and FM rock radio.

Enjoying massive success early in their career, America earned their stripes as musical soldiers on the battlefield amidst the excess, craziness and chaos of the 70s. The trio won the Grammy® for Best New Artist in 1972 and began working with George Martin and Geoff Emerick in 1974. This successful team went on to record seven albums and several Top Ten hits, including “Tin Man” and “Sister Golden Hair”.

Boasting chart and sales records that are virtually unmatched in popular music, Three Dog Night had 21 consecutive Top 40 hits, including three No.1 singles, 11 Top 10’s, 18 straight Top 20’s, seven million-selling singles and 12 straight RIAA Certified Gold LPs. Their hits appeared on best-selling charts across all genres including pop, rock and country.

Three Dog Night’s hits wind through the fabric of pop culture today, whether on the radio where they are heard day in and day out, in TV commercials or in major motion pictures — songs like “Mama Told Me (Not To Come),” “Joy to the World,” “Black and White,” “Shambala” and “One” serve to heighten our emotions and crystallize Three Dog Night’s continuing popularity.

Three Dog Night maintains an aggressive, year-round touring schedule of over 70 dates a year. The hit filled concerts are performed for generation-spanning audiences Danny Hutton (founder/lead vocalist), Michael Allsup (guitar), Paul Kingery (bass/vocals), Pat Bautz (drums), Eddie Reasoner (keyboards), and David Morgan (vocalist). The band’s now-famous name refers to native Australian hunters in the outback who huddled with their dogs for warmth on cold nights; the coldest being a “three dog night”.

Tickets cost $69, $55 & $35*; all seats are reserved and available at all Tickets.com outlets online or at the box office: 1-863-686-8075. Doors open one-hour prior to show start time. *Additional fees may apply.

Brian Wesbury is Chief Economist at First Trust Advisors L.P., a financial services firm based in Wheaton, Illinois.

Mr. Wesbury was a member of the Academic Advisory Council of the Federal Reserve Bank of Chicago from 1999-2007 and has been a regular attendee of the Economist Roundtable Luncheon at the Chicago Fed since 2007. In 2012, he was named a Fellow of the George W. Bush Presidential Center in Dallas, TX where he worked closely with its 4%-Growth Project. His writing appears in various magazines, newspapers and blogs, and he appears regularly on Fox, Bloomberg, CNBC and BNN Canada TV.

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