Episode 5 | Courtenay Shipley, Founder at Retirement Planology: The Role of Retirement Plans in Estate Planning

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Episode Notes

Imagine this: you've spent years building your career, but when it comes to planning for the future, you’re not sure if you’re truly prepared. That's where retirement planning comes in, not just as a financial safety net but as a crucial part of your estate planning. Most of us assume we have plenty of time to think about our 401k or beneficiary designations, but how many of us actually revisit these critical decisions when life changes happen?

In this episode of the Buried in Work podcast, host Adam Zuckerman interviews Courtenay Shipley, the founder and planologist at Retirement Planology, to discuss how retirement plans play a crucial role in estate planning. With over 20 years of experience in the retirement planning industry, Courtenay shares her expertise on crafting retirement plans that not only benefit employees but also contribute to a smoother estate transition.

Show Links

• To discover more about Retirement Planology: Visit the Website
• Connect with Courtenay Shipley on LinkedIn

About Courtenay Shipley

Courtenay Shipley, has a diverse background in the retirement plan industry providing a unique foundation for her clients in the areas of fiduciary responsibility, investment analysis, and participant education. During her career she has provided institutional investment consulting to qualified retirement plans, developed business strategy for a boutique third party administrator and recordkeeper, conducted over 9,000 education meetings to groups and individual employees, and served the nonprofit market.

Courtenay is an enthusiastic and focused retirement plan advisor who is committed to the idea that everyone should have the luxury of deciding how they spend their time later in life, on their terms. She is passionate about her work and thinks the key to making change in a complex world is listening to people and enabling them with the tools and knowledge they need to meet their goals and retool their habits.

Courtenay is a graduate of Vanderbilt University, and is licensed as an investment advisor representative (Series 66). She holds the Accredited Investment Fiduciary™ (AIF®) designation through the Center for Fiduciary Studies, the Chartered Retirement Plan Specialist (CRPS) designation from the American College of Financial Planning, the Certified Plan Fiduciary Advisor (CPFA) from National Association of Plan Advisors, and the Certified Health Savings Advisor (CHSA) designation. Since 2015 she has been featured in the Financial Times Top 401 Retirement Plan Advisors annual list, named a Top Women Advisor All-Star by the National Association of Plan Advisors, and named a 2018 NAPA Young Gun: Top 75 under 40.

Transcript

Buried in Work Host 00:00

This is the Buried in Work podcast where we share tips and interview experts to help you simplify estate planning and end of life tasks.

Adam Zuckerman 00:10

I'm your host Adam Zuckerman and today we have a very special guest Courtney Shipley. Courtney is the founder and planologist of Retirement Planology, a consulting registered investment advisory firm that specializes in corporate sponsored retirement plans. With a wealth of experience in the retirement plan industry, not only offers her clients expertise in investment analysis, plan design, employee education, but she also helps them leverage their benefits to support their own business goals. Pretty neat. She holds multiple professional designations and is the president of the Retirement Advisor Council. Courtney, welcome.

Courtenay Shipley 00:41

Thank you. I'm excited to be here.

Adam Zuckerman 00:43

Yeah, we're glad you're here. Let's hop in.

So personal journey. Talk a little bit about how you said, I want to dedicate the majority of my life on the retirement planning industry, because that's not something that you typically hear when you ask a kid what they want to be when they grow up.

Courtenay Shipley 00:43

Yeah. Nobody really signs up to be like a super Arisa nerd, right? So what had happened was I went to college, I had a music degree, I needed a job. I did not want to move back into like my parents' basement or something. And I fell into the retirement plan space. As well as some insurance sales as well. And after a short stint, decided, you know what, I really like the retirement side and the investments and helping people like figure out how they're going to make their paycheck later and be able to not work if they don't want to work. I love that part. Don't like the insurance part. How can I just stay focused on this? So yeah. And then my career has just led me from one series. It's a series of jobs in that field. So here I am 20 years later, 20 plus years later.

Adam Zuckerman 01:43

All right, what is retirement planology?

Courtenay Shipley 01:43

We're consulting an investment advisory firm that specifically works with corporations and organizations on the plan that they offer for their employees. So think along the lines of 401k or 403b, something that has a tax code like that.

Adam Zuckerman 01:43

All right, so what are some of those components of the retirement plans that you're helping organizations consider when you're crafting their bundles?

Courtenay Shipley 02:09

Oh my gosh, so many things.

We start usually with the back office. Like, how is this thing going to run? How is this not going to put more burden on your already burdened staff? Poor HR. There's not enough human resources in the human resources, you know? So we start there. We also look at what are the needs? What's this plan supposed to do for the company? So yeah, it's supposed to allow the employees to retire someday, but there's definitely a spectrum of companies who want to just nudge their employees in that direction to those who are like, let's get them signed up. They have to opt out. So, working on what it means for their retention and recruiting aspect of things. How do they compare against their competitors? And then we move into what are the investments that are needed for this workforce?

Courtenay Shipley 02:47

A lot of workforces are very different and they're in different stages of their life. How do we construct something that makes sense for the person who's signing on when they're 21 to the person who is 64 and a half who's getting ready to retire next month? And then the last part, of course, is all the stuff with the DOL and the IRS and making sure people stay out of trouble.

Adam Zuckerman 03:03

We'll definitely get to that in a little bit. Now, how does retirement planning with these plans contribute to a smoother estate planning process for the employees of the companies?

Courtenay Shipley 03:12

All right. It is definitely part of the estate plan. So retirement plans like this, the company sponsored ones are covered by a federal law.

So they're not as state specific, which is nice. Like if it's a 401k or a 403b, we'll sort of two standards or some sort of defined contribution plan like that. You're allowed to name a beneficiary and that's going to marry up into the rest of how you have things set up, right? It's very important when a person is signing on to enroll in these types of plans that they are naming who gets this money if you're not around to receive it later.

Adam Zuckerman 03:45

Does that have to be an individual or could it be a trust or some other entity as well?

Courtenay Shipley 03:49

Yes.

Adam Zuckerman 03:49 Is it difficult to change those designations?

Courtenay Shipley 03:52

It's not, actually. Most of the time it's just going online and updating it. But you would be surprised at how many people forget about it. So we always try to do like a little, it's spring, it's springtime, let's spring clean those beneficiaries, make sure you didn't get married, divorced, have another child, you know, do an estate plan, et cetera, that you need to change your beneficiary for.

Adam Zuckerman 04:12

As major life events, we recently heard a story from someone who was married, got divorced, remarried, passed away, and never updated a beneficiary from previous job that they still had their plans through. And the ex -wife was still that designee. So fortunately, she transferred over. But how often do mistakes like that actually happen?

Adam Zuckerman 04:30

I mean, in my career, I've seen at least a handful. So, I mean, we're not having people die left and right in our retirement plans usually, but it happens often enough that it's an issue.

Adam Zuckerman 04:39

Alright, so April 16th, the day after everybody filed their taxes, they should do an annual review of all their account beneficiaries. It's tip one for today's episode. that. Yeah. If you're going through, you've got life events, you're filing your taxes, you probably already have all your materials out, you know where everything is. Just a quick way to circle back. Yep.

Adam Zuckerman 05:00

All right. So with that, let's talk a little bit about the role of those beneficiary designations and how they impact the overall estate plan. How do you choose who should be it? Should you ever say, no, I don't want to have a designee? What are the different considerations that you advise people on?

Courtenay Shipley 05:18

Let's start with, no, I don't want a designee, or I just never got around to naming anybody. If you do that, then the plan document is going to have a sequence of who gets it next.

So in other words, you are no longer deciding who will get your retirement account after you're gone. It will go in a progression that's usually spouse, next of kin, you know, goes on from there. Is that bad? No, but it definitely slows the process down quite a bit for getting to the person or people that you actually wanted it to go to, or maybe they won't get it. So that's what happens if no beneficiary is named. It puts a lot of stress on the human resources department. It's no fun for anybody and...

Yeah, just don't do it. Now, as far as who you can name, the one thing I always caution folks against is naming somebody who's a minor child because they can't access the money. And typically what ends up happening somewhere along the lines is that the court will appoint a guardian for them. And then that guardian is now the person that gets the money because the children are not old enough to receive it.

That's not usually a great option either. If you already know who the person is that's going to be taking care of your children, don't you just go ahead and put them in there for the benefit of those children. You mentioned trust earlier. You can definitely have a language there that matches everything else probably that you're putting into that trust. So that's an option as well. But typically what will happen is that your spouse is your primary beneficiary by default unless you.. Unless you get them to say, I'm OK with you naming somebody else. what happens?

Adam Zuckerman 06:56

You say primary designation or primary beneficiary there. Does that mean that you can have a secondary as well?

Courtenay Shipley 07:01

Yes, you can. So you start off with the primary. If something happens to both you and the primary, then the secondary would be where it goes next.

Adam Zuckerman 07:07

And you have the ability to designate percentages between the two or split it? Or is it an if -then?

Courtenay Shipleyv07:13

If the first person is no longer around, then you're the second person.

So in a primary secondary situation, then it would be that it goes to the primary first if the primary is not around, then it goes to the secondary. However, if you want to name multiple beneficiaries, multiple primary, multiple secondary, you could do that. And you could say, I like this kid better, so they get 45%. The other two get 30, you know, whatever. I got no dog in that fight.

Adam Zuckerman 07:39

Don't do that. Keep it even. Don't make your kids and your loved ones fight people. It's not a good idea.

Courtenay Shipley

Not good.

Adam Zuckerman 07:44

All right. So impact on them.

Adam Zuckerman 07:46

Employee engagement and retention. Do employment retirement plans actually help companies?

Adam Zuckerman 07:53

Yeah, absolutely. Any benefits package is going to help a company because in your hiring practices, you've got to say why an employee would want to come work there. And one of those things is that you offer good compensation and your benefits package is part of your compensation. So absolutely, I think it does help attract and then retain, depending on how the plan is set up, those employees because they generally are happier when they know the employer is giving them something for tomorrow, that day in the future when they don't want to have to show up anymore to get that paycheck.

Adam Zuckerman 08:22

Where do you the state of the market being? What are companies offering in their retirement plans and how are you helping them stay competitive?

Courtenay Shipley 08:29

Oh man, we're seeing all kinds of stuff right now. I would say profit sharing has become a very popular thing. So being able to not only reward your workforce with bonuses right now, but also a bonus for the future. That's one...

Making sure that your employees really understand and appreciate the plan. So that usually comes through some sort of financial education component, helping them get, you know, maybe what they didn't learn from their parents or maybe what they weren't learned poorly from their parents about their finances in order and helping them put together their financial picture. Financial literacy is a big issue in this country. And so that tends to be something that's very attractive to companies as an extra benefit, but also as a way to give back to their employees and hopefully contributes to their good culture and they stay there.

So I'd say those are the top two things right now that we're seeing.

Adam Zuckerman 09:15

One of the things that we're focused on at Buried in Work is financial literacy. We want to help people understand the state of their finances so it weighs in and influences their proper estate planning. One of the statistics that we've talked about on other episodes is that on average, women outlive their male husbands in the country by an average of 5 .8 years, which is terrible for a variety of different reasons, especially in traditional family households where there's a division of responsibilities. And obviously, this is not every household.

where the male or the partner is taking over the finances and the female side is just not involved as much. Because there's going to be such a mix of experience over the next two decades as people age out, are you seeing companies helping their employees educate spouses as well? Or is it such a high lift just to educate a primary employee that it's not something that's top of mind?

Courtenay Shipley 10:10

It's a mix of both, but what I will say is COVID changed the paradigm because prior to COVID, the default way of getting messages to employees was to have somebody come on site and do a meeting for all the employees. So the spouse was never, you know, invited. There was no way it was on company time during the day. So after COVID, that's where we've seen a huge uptick in use of the virtual medium. So hopping on Zoom or Teams or something to have those types of meetings.

and now the spouse can attend. And it's really made me happy, to be quite honest, because sometimes, like you said, it's a joint decision and you don't have the other person's input, and that's a problem. Or they feel very differently about using the plan than maybe the spouse does on the investment options or otherwise.

Adam Zuckerman 10:59

That's interesting. I didn't think that COVID in a strange way would have a positive impact on...

Courtenay Shipley 11:05

I know. It's so strange what it influenced about our industry and other things.

Adam Zuckerman 11:10

What are some of the other unexpected or unintended consequences that you've seen, not necessarily related to COVID, but just in general in the market?

Courtenay Shipley 11:17

There was a big law that was passed a couple of years ago, the Secure Act. was part one and then part two. What that did was greatly expand coverage for employees. So if you're a part -time worker now and you work 500 hours or more, two years consecutively in a row, your employer has to let you at least use the plan with your, put your own money in. So that's been really big.

I would say that there's been a renewed interest in financial wellness as well from companies who saw people struggle through COVID and also get back on their feet with all the stimulus checks that came through. But then they want to make sure that they're sustaining that going forward. So I saw a lot of that as well.

Adam Zuckerman 11:58

All right. And for listeners that are interested in learning a little bit more about the SECURE Act, that's the Setting Every Community Up for Retirement Enhancement Act.

that was signed into law in 2019. came into effect shortly after that. But we've got an article on the website and if people are interested, can point you to that in the show notes. We'll have a second conversation. We'll see. What do you think that the market will shift towards in the future? So we are where we are right now. If you look back 30 years, people had pensions. Obviously, pensions are something that younger generations now aspire to have but rarely get unless they're working for the government.

Instead, we're being encouraged to invest in our 401k's or 403b's for our kids, whatnot. Where do you see things actually going?

Courtenay Shipley 12:41

I think we're going to be in this situation for a while with the you are in charge of your own retirement. We have Social Security and believe it or not, Social Security actually works really well. It's a very, very good system and we really need lawmakers to figure that out for the longevity of it about how they're going to make changes to make it more viable. But it really does help the lower income people replace their working income. And it really does help supplement those who make more. And it's a huge part of our retirement system. So the 401k and the personal savings side of things, that's the most common way that people are saving for retirement in this country. It's also a very important part. But you have to remember...

The 401k isn't very old. Now, it really gained popularity in the 1980s, and that was at the largest of companies. And then now it's become the more primary way for saving. So I think part of the, this is the first generation, you know, the baby boomers who are actually retiring on and using the 401k plan. So I think there's still a little bit more to be seen. And I think lawmakers still have higher expectations for people being able to save in it and covering more people and things along those lines. But

I think we're here for the time being until some other major thing comes along.

Adam Zuckerman 13:53

Let's shift then to the 401k. The maximum amount an employee can contribute to the 401k plan, think, is $23 ,000 a year. Is that correct?

Courtenay Shipley 14:01

Yes. Ish. It goes up every year with inflation. And then when you're 50. if you are over the age of 50.

Adam Zuckeman 14:09

Over the age of 50, you get the catch up contributions.

If someone gets a job, let's say in their mid 20s, they graduate college or they just get hired without a college degree, which is happening plenty now, they contribute the max and there's a 5 % 7 % employee match or employer match. Is that enough for people? That's all they have to do? Or do you have to save and do things on the side as well? And what I'm trying to get at is it's difficult for people to plan and know what their actual requirement will be when they retire. How do you know if you're on track and does a 401k actually meet that requirement?

Courtenay Shipley 14:48

All right, it's a big math problem. Yeah. But the problem is we don't have all the variables. What are you going to do in retirement? What are you going to want to do in retirement? How long are you going to live? How many years of retirement are you going to be in?

This will never be an exact science. think it's always going to be your best guess. And I'm not trying to dodge your question. is the real reality of it. So it's important. This is the reality of it. I have an engineering client and it drives them bananas. You know, when I meet with their employees and they're like, I just, I don't know how long I'm going to live. If I knew that I could work backwards and figure out how much to save. And that's why, you know, the general rule of thumb is if you're saving somewhere between 10 to 15 % of your pay, then that should get you in a pretty good position to make about 80%, or to be able to pay out about 80 % of what you're currently making in retirement. Now, does it always work? No.

Do other people have different strategies? Yes. mean, business owners, they may be relying on their business that they're going to sell at some point in the future as an asset. There could be, you've got real estate that you've bought and maybe you inherited it since we're on this podcast. And so they're using that as a stream of income. So I think the most important thing when it comes to planning for retirement in your future is A, what do you want retirement to look like?

And then B, how are you going to put that paycheck together? Because the earlier that you start thinking about that second part, the more time you have to save or make decisions or do things, right?

Adam Zuckerman 16:10

There's an old sentence quote, I think, that is, the sooner you fall behind, the more time you have to catch up. So maybe that's it.

All right. Advice for employers.

You work with lot of companies. What advice would you give to the employers who are looking to improve their retirement plans for their employees?

Courtenay Shipley 16:28

The exercise where you just wipe the slate clean and start over. Think about it. If we could do anything today, what would we do? Because if you can dream a little bit, sometimes you'll come to a better answer for your workforce than maybe what you already have in place. But half the time, honestly,

this is out of sight, out of mind. They're like, somebody else takes care of that for me. And they don't have great advisors like us who are constantly saying, hey, does this really match up with what you're trying to do? Is this doing the right thing? So I think it's important to hire well when it comes to your advisors around you. And then second, just go through that exercise every few years to say, there anything that we really need to do differently here.

Adam Zuckerman 17:06

Courtney, what advice would you give to employers that are looking to improve their retirement plan offerings?

Courtenay Shipley 17:10

I have a lot of advice.

The first thing is don't ignore it. And if you could just like wipe the slate clean and say what if we were to start our plan over today, what would we want as the most ideal plan? It's worth spending the time and doing that exercise just to see where you end up. And also it can point you in the right direction for what do you want this plan to do and how can we make it better to our employees that we have now and what kind of employees are we trying to attract in. So not ignoring it and putting it on the back burner is probably the most important thing.

Adam Zuckerman 17:39

What are those two things drilled down a little?

So the first one is, if you were to start over today, how are things different than what they were five years ago or 10 years ago? Are there different options for companies to choose from, or is it just a different holistic approach?

Adam Zuckerman 17:52

So on that first point, I mean, you think about where your business was five years ago, and it's completely different probably than where it is today. So you may have a different employee base now. You also might be looking at different financial goals and different compensation packages. So if you think about how you designed your compensation package when you started, you know, and you were bootstrapping things.

versus when you got to your 25th employee or otherwise, you know, even maybe more than that, that spread of where the dollars go is probably very different today than it was back then. So that's what I mean when I say, let's just start from scratch. Like if we could just wipe this out, we don't have to think about anything. When would we make everybody eligible? What would we do for vesting? What kind of investment options do we need to have for the employees that we have today and the ones that we're trying to attract in tomorrow?

Adam Zuckerman 18:40

Let's bust some misconceptions. What are some of those myths or misconceptions that people have about retirement savings and what can they do to avoid those pitfalls?

Adam Zuckerman 17:52 18:47

From the employer standpoint, think many employers, it is the last thing on their to -do list to pay attention to the retirement plan. So the most important thing is that you hire good people around you. And the myth that goes with that is like, someone else takes care of it.

At the end of the day, you sign for it. It's still on you. You are still there to monitor what's going on. So making sure you have those regular meetings and you have evidence of how you've done the right thing in the best interest of the employees is super important. From an employee standpoint, I think the most common thing we hear is, retirement plans, that's for old people. I don't need to do that. And that's just not the truth, right? The earlier that you can get started, the better off you're going to be in the long run. I think we all know that. Time, value of money, all of that good.

stuff. yeah, and just taking an interest in it, trying to understand because plans are different as you move from different jobs and understanding the portability of it, all that kind of thing. That's good too. right.

Adam Zuckerman 19:48

So what do you hope our listeners will take away from your insights on retirement planning, employee benefits, estate planning? If you have to leave one word of wisdom, what would it be?

Courtenay Shipley 19:52

Fill out your beneficiary form. How's that?

Adam Zuckerman 19:53

Okay. Nice and simple. I love it. And if people want to find you, Courtney, how can they get in touch?

Courtenay Shipley 19:59

They can find me on LinkedIn, or they can go to our website, retirementplanology.com slash learn more. And that'll take you to all of our tools and resources.

Adam Zuckerman 20:08

Sounds good. Well, Courtney, thank you so much for your time. We enjoyed the conversation. That wraps up another Burydenwork podcast episode where we feature tips and stories from industry professionals who specialize in making estate planning, end -of -life tasks, and estate transitions more manageable. If you enjoyed the podcast, consider leaving a review.

Follow us on social media or visit us at the website, buriedinwork .com.

Don't forget, podcast listeners can save 10 % off of Buried in Work's estate preparation package and games with the code B -I -W Podcast. Courtney, thanks again. We appreciate your time.

Courtenay Shipley 20:35

Thank you.

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