Risky Benefits

Vista 401k Retirement Planning - RIsky Benefits S5E1

• Kyla Heap • Season 5 • Episode 1

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In this episode of 'Risky Benefits,' sponsored by Humana, the hosts discuss the importance of 401k planning with Jim Matthau, retirement services manager for the Vista 401k team. Jim provides an overview of Vista 401k, a supplemental retirement plan for select Florida school districts, and emphasizes the need to start investing early. He explains the tax benefits, flexibility in contribution adjustments, and the importance of diversification within a single plan. The conversation also covers the advantages of consolidating retirement funds and highlights the support available from Serity Partners, an advisory firm. The hosts and Jim underline the goal of ensuring financial well-being for a comfortable retirement.

To listen in and subscribe to more episodes, visit our website: fbmc.com/podcast.

Hey, thank you for listening in to risky benefits, a podcast that informs you on all things benefits. We've got a saying around here. Benefits isn't your main business. It's ours. Thank you to this episode's sponsor, Humana. At Humana, they know that healthy, happy people power a successful business. Their dental, vision, life, and disability plans let you construct a benefits package that sets over 50 years of experience. They design plans to address overall and financial well being, with products that offer award winning services, broad networks, and modern benefits that serve a wide range of member needs.

Rick & Kyla Video:

Well, hey everyone and thank you for listening to Risky benefits. Welcome to this week's episode. Today we're live So i'm going to read this out so that we can get the intro through but jim our guest jim Matthau. retirement services manager for vista 401k team, which is a component of fbmc Today's topic of 401k planning is important for anyone who's looking to learn and build a comfortable retirement. So, planning for retirement can often feel overwhelming. But as Jim is going to let everybody know, it it doesn't have to. and so we're going to get into this. We're going to talk through a lot of those components. But before we do, it would be really nice, Jim, if we could just get to know you. Maybe help the listeners get to know a little bit about you. so maybe just talk about yourself. I know that you've got a disclaimer that our compliance team has basically asked you to read. So maybe start there. Okay. And then we can question whether. We believe anything you say after that.

C0001:

Well, we'll see. I guess the disclaimer is that, the material that, I'm about to provide you is for informational purposes and educational purposes only and should not be construed as investment advice. And, please keep in mind that performance of funds or stocks or the market in general, past performance is no indication of future performance and And that's it.

fbmc-marketing_2_02-05-2025_140858:

Well done, sir. Well done. Um, I'm pretty sure, though, that you gave me some advice right before Did I not take that?

C0001:

No, definitely not.

Rick & Kyla Video:

It was more of a, it was more of a thought, really. Yeah. It was more thought sharing. Um, no, that's super cool. Um, Jim, super excited to have you on. I know, like, most people that are out there, everybody's working and then hopefully people are pulling a little bit out of that paycheck to, to put forward for the You know, unless you work for the government and you kind of have a pension that's preset for you, um, most of the people in the private sector and many people in public sector, um, are are operating off of 401ks. Um, we'll get into all that, but would love to learn a little bit about you just to share with the listeners out there before we get rolling. About me personally? Yeah. Oh, okay.

C0001:

Well, I, moved to Tallahassee 22 years ago I'm married, have three kids, we are about to see the last one off to, to college. So, gonna be. What college? We are waiting to find out.

Rick & Kyla Video:

Oh, exciting. Is that like your I don't want to say it because I know it's not Florida State and everybody here is from Tallahassee,

C0001:

South

fbmc-marketing_2_02-05-2025_140858:

but It's UF. It's UF. My other two graduated from UF. Well, because they graduated, he wants to If he had his choice, it would be UCF.

Rick & Kyla Video:

Okay.

C0001:

I say it jokingly. They're, they're and

Rick & Kyla Video:

it's

C0001:

insanely hard to get into these

fbmc-marketing_2_02-05-2025_140858:

days. It's gotten so difficult. It's crazy. Yeah, absolutely. So, anyway, my oldest is Mary, lives in Gainesville. Mary, My daughter. my daughter, My daughter's in, uh, in Jacksonville. She graduated a couple of years ago and, and, and my youngest we'll see, but he's, uh,

C0001:

like I said, almost out of the house. My wife grew up here. I'm from New York. Long Island originally lived my whole life there before moving down And I have been with FBMC for five and a half years as the retirement Services Manager. Okay, so I just, I'm going to ask, as somebody who lived in Long Island, York and, know, did the winter thing for years. I'm just curious, how did that feel this year going through the Tallahassee cold spell? Cause I loved it personally, but I'm just curious. Did you have like a moment of what is happening right now? It was bizarre. It was, I went out that night with, with my youngest and it was about 10 o'clock at night, we went on a walk. And I felt like I was back on Long Island. It was crazy. And the next day he built a snowman. and just to say, I live in Florida and I built a snowman In Florida. It was, it was amazing. I, And it stuck around. It was, I really enjoyed it. It It was, I think everyone did. It was pretty cool. Yeah.

Rick & Kyla Video:

I, think that actually it's like we, we went sledding. We went and bought an air Nice. And put all the kids on it and pushed them down this massive hill, which they loved. but the funnest, one of the funnest things was the street turned to pure ice Yeah. and we were like, I took the bottom out of a dog kennel, like that hard plastic. Yeah. I went flying down the street. Oh, I bet. It was amazing. I loved it. So it was fun. Well, go ahead. I know Kyle, you can get us rolling on the Yeah. So why don't you just tell us a little bit about Vista 401k and what that is and, you know, just Background on that.

C0001:

Sure. The Vista 401k is, it's a supplemental retirement plan for five different school districts in in Florida. Miami Dade, Charlotte, Madison, Monroe, and Okeechobee. It is a grandfathered in plan where no other districts are allowed to. Enter the plan, and it only exists for those five. Um, it is, let's see, the VISTA plan is an excellent option. As you know, or may know, the districts have the FRS, Florida Retirement System plan, where they have to do 3% of their income, which is great and it's a great foundation. But ours is a supplemental plan. It's optional for people who want to save more than just the 3%. And although the three percent's a terrific start I really believe you need that extra, supplemental plan. And and, we're our goal is to try and get as many people to see it that way as possible.

Rick & Kyla Video:

I guess like one of the questions I, Generally would ask is you you said that it has certain entities that are a part of it and it's not something that people can now do, right? Like the government changed legislation on 401ks within these types of it. Why? What's that all about? Like what

C0001:

the why of it? Yeah. I'm not exactly sure why they did it. It was a number of years ago. I And it's, it's interesting because they've made it so no one else can enter it and then to leave it. has its pitfalls too. It's it's expensive for the districts to leave it. Although one Pasco County used to be a part of it and they left. I don't know. I don't know the logic that went behind it. I know it's been in effect, I believe, since 1986.

Rick & Kyla Video:

So they're get there in like take Florida as an example. They're in the Florida retirement system. Yes, but they're also This is like a supplement to that. They're also being given the opportunity essentially, to put funds into that program so that they can ultimately, have both really, right. and, and maximize their retirement.

C0001:

And the 401k is my, I mean, there's other options, there's a 403b and a 457, but we offer the 401k and anyone who is doing that, who is looking to invest, I recommend you just investigate the plans, find out the expenses, find out what sort of service you get and that sort of thing. And. pick the best option. We think it's us, but I'm sure the others would put up a good argument as to why you should go with them.

Rick & Kyla Video:

I mean, so ultimately, why is this a smart move? Why, Why? Why do it? Why do you think it's us?

C0001:

It's just, you You have to, it. you have to think about the future. You have to think about retirement. You have goals and aspirations, things you wanna do when you reach that that age, and you wanna have the money there to do it. You might be under the misconception that The F. R. S. will be enough and I just, I think you need more in retirement to do the things you want and I think you need to sort of carve out enough money to do that and to invest and to do it every pay period and never stop and never, if you can avoid taking loans out or things along those lines on the plan, it's I think it's a necessity when you, when you sit down and you think about the things you want to do in retirement, you have to then sit down and say, well, how much is it going to cost and where am I going to be at that And this is just one way to, to, to secure that retirement.

Rick & Kyla Video:

Yeah, it's like Jackson, my son got in the car the other day and he said, I guess, I don't know if you heard this on YouTube or where you heard it, but he basically goes, Dad, would you take a million dollars today? Or would you take a penny? If I give you a penny a day every day and double it, would you take that over 33 days? And I, I was like, all right, I feel like, 33 day. I feel like this is a trap. It's a question. for sure. It was like, so, I'm like, I'm it, of course it pops up, and it's like, 30, you know, this equals 5 million over 33 days, and I was like, wait, so like, I'm like, it's And it's double, but it's beating. Double. Double. so the total value is getting doubled. Yes. Right? And so that's what it was. I think, like, when he communicated it to it was, like, a little different. But moral of the story, it's compounding Yes. And so it's really, really getting people to I guess, the value of the compounding interest. So, I mean, I, it stands to reason, like if you have a pension, and then you can additionally save in this other tool, that's, that's growing on compound interest, More at better, Right. Right? And, And I guess like, Nowadays, they're telling people, man You need like 3 million seems to be this magic number that you hear from a lot of people at point of retirement Do you ever just stop and think about how much money that is? Yeah. I mean the later you start you ain't, you ain't hitting that three million dollars, Right. right? Like if unless you're really really getting after it aggressively early. Yeah.

C0001:

Right, even so, you're, there's limitations with the, you can do up to, uh, 23, 500 is your max. And then if you hit 50, 50 year old or another 7, 500, some legislation just passed that allows you to do a little more than that when you hit 60. but you really want to get at it young and do as much

Rick & Kyla Video:

Yeah. So I think there's like, there's a stigma about like, I don't need to start saving for retirement yet. You know, do you have like a age suggestion when you advise people to

C0001:

Yes, the moment you start working. Because, I look at it now, I look at the, the VISTA plan in particular, and one problem we have with younger people people under 40. not investing it. They make up a very small percentage of the plan, and once they hit 40, it's like a lightbulb goes off and they go, Oh, my gosh, I don't have enough money. Oh no. And where our efforts or marketing efforts or education efforts, to webinars, marketing materials and whatnot, but to make people understand that it should be day one, when you're, when you just get outta school and, or, you know, whether it's high school or college, whether you're working as, oh, a janitor or, or, a bus driver or a teacher or a principal, whatever it is, Mm-hmm.You need to invest right away and, and you need to sit down. It's, it's hard because when you're 23 years old. you're never going to die. And you're never going to retire, but you sit down and you have to say, okay. if you say you can't afford it, you have to investigate what you're doing every week. Do you go out and get a coffee at Starbucks or I think Yeah.

Rick & Kyla Video:

Rick gets enough for everybody. I don't do soda, but. I know that most people who don't do coffee do soda. and or Coke, whichever you call it. And, and, I I do because I go sit there. I drink a coffee. I do my work um, I've seen you yeah, yeah,

C0001:

it's true, but just something, somewhere in your life do I go out to lunch every day? Well, maybe I can bring my lunch, you know, And I can just add a little bit more each time, a little bit more. and

Rick & Kyla Video:

I If you start, right, the day you start working, it's almost like you didn't even know that it's missing. You know? Right. Exactly. So, do me a favor. Sorry guys, the light keeps cutting out on my Talk to us, uh, Jim about the tax benefits of 401k.

C0001:

Well that's, that's the other benefit of it. You are, your, um, payroll deduction is coming out pre tax. so the amount of taxation, federal tax coming out of your salary is going to be less. because it's a smaller, smaller amount. that money will get invested in the 401k and you won't have to deal with the tax ramifications until you pull the money out. And you're not, you're not allowed to pull the money out until you hit 59 and a half. There's hardships and loans you can do along the way, but you have to be 59 and a half. But you don't have to pull it out 59. when you, when the government starts making you pull it out, It's at 73. And the assumption is you're going to be in a lower tax bracket at that. point. So you're saving money on taxes up front and then again in the back when you're, when you're pulling it out at a tax bracket.

Rick & Kyla Video:

So did everybody hear that? You're saving money on taxes. Yes. That's great. Yeah. Um, so do you have a certain amount that you recommend contributing?

C0001:

Well, you know, we do a newsletter every quarter. It just went out yesterday actually. And a lot of times we'll talk about personal maximums, because I said 23, 500 is your maximum. Well, that's great. It would be nice to be able to put away 23, 500, but each year, And that changes each year. The IRS comes up with different, uh, different. know, higher amounts usually each year, although the, the catchup contribution at 50 didn't go up this year, but you have to look at your own finances and say, how much can I afford? And you have to look at what you spend money on and if you can decide. Okay, maybe you need that coffee every day. You know, maybe you, but maybe you go out to eat too much. Maybe you're maybe your car is a little too fancy. Maybe you're spending too much. You just have to investigate it and take that out and put it in your 401k and choose your own maximum because every, just, everyone has a point where they bump up against it and say I can't put any more in. I got to pay it. The essentials. So I would recommend doing as much as you can answer your question.

Rick & Kyla Video:

You know, it's funny most of us if not many of us um, Live in a subscription world now, right like so Netflix is on a subscription who moves on a subscription like Peacock I Apple TV like I could probably think of a million different subscriptions your gym membership your cell phone, your apple iCloud storage and the list goes on And it's so funny because we, we, We pull this stuff out We set it up to come right out either go on a credit card or come right over our bank account. And we're doing this and you look at it and it's inconsequential because you're like, Oh, it's, you know 10 a month or less a dollar 99 for like iCloud store, whatever the storage requirement is And I think about that sometimes it's like you get so used to doing that they've now created apps that go and help you find all your subscriptions so you can save and maybe cancel some of these subscriptions. And it's like, man, that concept of pay yourself like if you, if your first subscription was your 401k subscription and you thought about it in a similar way, it's like, Which will lead me kind of to my next question, which is how easy is it to change that contribution over time? If you started with, and I know this is gonna sound stupid, a 1 of your salary contribution, you could do that, right? And then presumably, what, how frequently if I, if I, over time I was like, okay, now I wanna move to a 2%. Now I wanna move to 3%. Right now I wanna move to 4 and just keep climbing that ladder. You know, because I think like 10 percent is what people say you should strive for. Well, maybe I am not able to do that, to your point, right? Sure. But could I do 2%? And I guess like, I think about that. If you do your percent first, pay yourself first, and then, and then go pay somebody else if you want the Netflix, if you want the Starbucks, you know? Sure. So, so could you answer that though about like how frequently can I change the contribution amount?

C0001:

Yes. As far as. Opening a plan or changing it. You can do it anytime you want. It's, pretty simple process. you can, one thing we've done now is previously it was a dollar amount. If you did 25 per page, every paycheck or 50, it stayed that way for years. We're encouraging percentages because that'll grow with your salary. and more will be put, excuse me, put away. We have another process though, every year you can, on January 1st, set it up so it increases automatically. So your percent to your point goes from one to two. Maybe you don't even realize it. You don't. It's, It happens automatically on January 1st. Wow. And it's it's um,

Rick & Kyla Video:

It's like everything else goes up every year. That's right. That's right. I know, I keep getting notes Netflix telling me. Oh, hey, it's going to cost you more. I'm like aren't I getting the same videos this year that I got last year like what did I, what changed

C0001:

Or it freezes on you That makes you, Right, You know, how much are we paying for this? Yeah. I

Rick & Kyla Video:

watched the Tyson. Kinda. Did you though? I feel like I watched a buffering match is what I watched. Anyway.

C0001:

Well, you can make it anytime. I mean, you, you can increase it whenever you You get a raise in the middle of the year, you can bump it up or you just decide you have some extra. Yeah. so it's super flexible. It is flexible. And like I said, you can sign up anytime you want.

Rick & Kyla Video:

Okay. So when you do get to the point of retirement, what happens? How do you get, how do you access

C0001:

Well, if you are, once you hit the magic age 59 and a half, which I four months away from Oh! happy, happy old age. Yeah, it's a, it's 59 and a half is when you can take, take it out without penalty. If you are, let's say you're working for the school district and you leave the well you can leave the money there until you 59 and a half, or you can roll it out. But, um, if you. You are actually able to take it out and spend it if you're not 59 and a half, but there's a 10 percent penalty. You have to pay the taxes, which is, you know, roughly around 20%, percent and then a 10 percent penalty on top of that. So you want to avoid the penalty. and really to do that, it's 59 and a half. That's the magic number when you withdrawing funds without penalty.

Rick & Kyla Video:

Okay. Is there any kind of reasoning behind 59 and a half? I No, I mean, they keep changing like the art. Okay. 59. 5 is when you can start taking it out, but then there's a point, and you don't have to, but there's a point where the, where the government says, now you have to. Take out, there's a formula when you hit. It's changed, to 70 5. they just keep pushing it back, and I guess the logic, it's 73 now. People are living longer? Yeah, they're living longer. And then maybe you're, you know, cutting a little slack that you don't have to pull it out. Right. They need additional funding in there to help So it probably benefits them to have Right, right. Yeah, that's true, too. Absolutely. I mean, it's just the law of large numbers.

C0001:

Right. And so you don't have the thing about the Vista plan, though, I do want to say is when you retire, Right. You do not have to take your money elsewhere. In fact, you can stay with the Vista plan. You have access to a company called Serity Partners. We have a relationship with them and at no additional cost to the participant, you're able to access them and talk about finances and they can give you recommendations and suggestions, Not just on the VISTA plan, but other So if you stay with us, you can keep your funds here indefinitely and you have access to that. You can also roll funds into the Vista plan from other retirement plans, other qualified including your drop funds. If you have dropped money and you're going to take it out, let's say the drop money is you have to take your drop it's half a million dollars, which it could be. you'll have, if you take that all out. And put it in your bank account, for instance, or put it in an investment that is not a qualified plan, The government sees it as you made 500, 000 that you'll pay tax on. You'll pay tax as though you've just made 500, 000. 000. a year. you roll it into a 401k plan, the Vista 401k plan or other too, you are shielding it that. And then you'll take, if you, hey, I need 5, 000 this year. Well, you'll just pay taxes on that. won't get hit with the whole thing. So the idea is, Consolidation, Keeping everything in one place, because if you work several different places, your plans are sort of all over the place. So roll it into the VISTA plan, put your drop funds in there, and experience Serity Partners. they're uh, they're a registered investment advisory firm. And they're there for you.

Rick & Kyla Video:

Well, and it's interesting, It's funny, right? People think about diversification. So they think about, oh, well i've got these different plans out here operating. Must be good, right? Because that's like diversification. No, no, no, no. That's not diversification. Maximizing your dollar, meaning the more money you have, the greater the interest can earn on that mass of funds. The more disparate it is, the harder it's going to be for your money to work for you.

C0001:

Yes. And in addition to it's, you could have 10 different plans, but if they're all invested the same way, there's no diversification at all. You could have it in one plan and you can diversify And it's, they misunderstand diversification. It's not having multiple plans. Yeah. It's having all your funds, more so in one plan, spread out across a variety Fund types. Of fund types based on your risk tolerance, time horizon, that sort of thing.

Rick & Kyla Video:

Which is kind of a good, I mean it's a good little note for those that are watching and listening. You know, irrespective of whether you're in our plan or whether you're in another plan. Start day one And start putting money away because I mean look at like I sit down in front of our TV at night and um It flashes old photos as our screensaver guys I I just I can't even I look at the pictures of our kids and I can't even believe that five ten years has gone By yeah, so I mean think about like what you're if you're putting money away every year and all of a sudden you turn around You're like, where did this money come from and in my retirement account? Well, that's what happens when you Put stuff away and don't think about it, right? You know, it's what happens whether you like it or not with the kids. It's sad. I'm just watching them. I'm grateful for it, but Yeah, absolutely.

C0001:

Yeah, but I do recall everyone people saying that take advantage of the time with your kids when they're little because it's fast. And I'm like that crazy. Another 26 Right. So, yeah.

Rick & Kyla Video:

These are the 40 year olds who are like, Uh, I probably should have been putting money away for the last 20 years. Well, right. When you have three kids to send to college. And you're like, well, that's going to, I'm not going to be able to save that much this year. I've got to pay for college, Right, right. Well, I had a question here. It's not really a question. It's more of like, I feel like a statement to the people listening. Like, what are some of your retirement dreams? I mean, if you're listening to this, Think through that, right? I mean, there are things that you are going to want to do one day. You're not, yes, we all need to eat. We may still have a mortgage, most likely, at that time. Just depending on your life circumstances. So you need to pay for a place to live. You still got your car and I don't know, you may want a new car. Not drive the same car your whole life, right? You still want to drink coffee. you still want to roll up to Lucky Goat or Wherever you like to go. Um, and so there's those things, right? But then there's, hey, I was fortunate enough. To make it to this point and still have my significant other with me and we'd like to go do things together Then there's that aspect of life, right? And or my grandkids are there and I'd like to do things for them, not just for myself And I think once you get to the point where you're capable of doing those things, if you didn't have the funds, that's, I mean, it's kind of a sad thing, you know, so you really hope, hope for the best for people when it comes to those things, but, uh, I guess that's what I would say around, like, what are your dreams? Where would you like to go? What would you like to do? Um and consider, you know, we will contributing to a 401k or whatever your retirement method is get you there. right It'll definitely help absolutely. Right? Well, Jim, we save kind of a final question just for everybody who listens. and it's really what else? What else would you want listeners, uh, of risky benefits to know?

C0001:

Well, I think what I like to do is just quickly summarize what we, because you can do it all in a nutshell. It's invest early, do your maximum, continue to invest throughout. Do not stop investing. And then when you hit 59 and a half, consolidate if you have other plans elsewhere, bring, and if you have dropped funds, consolidate, bring them all in, um, diversification, like we said, is it doesn't mean you have multiple different investments. It means you have one or two investments and you've gone through the process of determining what type of investment investor you are, what's your risk tolerance, what's your time horizon. what kind of stomach do you have for the ups and downs of the market? And then once you get that all settled, you can breathe easy. And know, for instance, you can keep the money at the Vista 401k plan. You can bring other funds in. And we have professionals here to help you out with your with your investments. As you get older, as you have ideas. as your ideas change, and it should be something you revisit yearly because you change each year and you want to make sure it's in the right investment that investment that is right for you at that time in your life.

Rick & Kyla Video:

That's awesome. Um, well, Jim, I'd love to thank you for coming and spending time with us today. Thank you. I'm Super grateful for the service you provide for, many of our clients. And in addition to that, I'd just like to think the listeners. Thanks for listening today. If you have any questions about the program, please contact or look for information on our homepage at www. fbmc. fbmc. com. Jim, if you don't mind the VISTA website address. Oh, yeah.

C0001:

Uh, vista401k. com.

Rick & Kyla Video:

Okay. Perfect. Um, and remember, for all the listeners, you can find us and subscribe on any podcast app. So thank you and have a great day.