3 Facts Most People Don’t Know About 401(k)s We’re Not at Work Anymore, Toto
Go Brandless! It’s Back and Better Than Ever Companies like Warby Parker have built a powerful customer following for creating direct-to-consumer products that slash prices by cutting out the middleman. Now, Brandless is doing the same thing for small, everyday purchases. When you buy peanut butter, you’re not just buying the product — you’re also buying the brand attached to it, along with its costs of distributing and warehousing, plus retail space. By eliminating what cofounder and CEO Tina Sharkey calls a “brand tax,” she realized Brandless could significantly cut down the costs for small products that people bought every day. When Sharkey and veteran entrepreneur Ido Leffler came up with the concept of Brandless, it immediately caught fire. They raised over $16 million in November 2016, and at launch, received over $50 million in venture capital from New Enterprise Associates, Google Ventures, and others. However, their business model didn’t sustain itself forever — Sharkey stepped down as CEO in May 2019 after friction between her and lead investor SoftBank Vision Fund. By February 2020, Brandless had shut down and laid off 90% of its workforce, leaving only a few to manage open orders. When the tornado of a busy career finally slows down, and you’re on the yellow brick road heading toward retirement, the last thing you want to feel is lost — and that’s where 401(k)s come in. You must begin withdrawing from your 401(k) when you hit the age of 72, with some exceptions. Here are a few important facts about 401(k)s to keep in mind as you start preparing for your retirement. ROTH OPTIONS Like traditional 401(k)s, Roth 401(k)s also take contributions. But Roth contributions are made with after-tax dollars instead of pre-tax dollars. Since you are using after-tax dollars for your contribution, you can withdraw money in retirement tax-free. Unfortunately, only half of employers offer Roth 401(k)s. Even if you opt in for the Roth 401(k), your company match will be made pre-tax. If your employer doesn’t offer 401(k) plans, you can open a Roth IRA on your own. STABLE VALUE FUNDS When you are close to retiring, you may want your retirement money to be in a safe investment option. Many 401(k)s offer
stable value plans you can choose from. Stable value plans are beneficial because they pay higher interest rates than bank savings. They won’t fluctuate like stocks, and they shouldn’t go down in value if interest rates rise. How much you keep in a safe investment depends on how close you are to retirement and how much you will withdraw.
AGES 55–59 PENALTY EXEMPTION Most people think there will be a 10% early withdrawal penalty tax if you withdraw from your retirement account before the age of 59. But there are some exceptions to the rule. Provisions in 401(k) plans exist for those who leave their employer after they reach the age of 55 but before the age of 59. This allows you to take withdrawals that are exempt from penalty taxes. Keep these facts in mind as you prepare for retirement, and if you are beginning your career at a new business, see what types of 401(k) plans your company or preferred investment fund offer.
BRANDLESS IS THRIVING AGAIN, NEVERTHELESS.
When Brandless shut down, they cited their struggle with fierce competition and business model inviability in the direct-
to-consumer market. Part of the problem was that Brandless simply wasn’t sustainable in the way Sharkey and Leffler originally hoped.
That’s when Utah-based digital marketing exec Ryan Treft entered the picture. He’s the new CEO, and his vision has, thus far, helped make the consumer’s “quality to price valued product” daydream a reality. “It’s not about racing other brands to the bottom of being the cheapest, because that’s where people compromise on the quality, the ingredients,” Treft said. His new leadership promises to uphold Brandless’ previous commitments to keep all its products free from 400 potentially harmful ingredients, including parabens, sulfates, and synthetic dyes. For a new “brand” that attracted a lot of attention back when it was in its early stages, Brandless is certainly back to the top with its newer product lines in personal care. They’ve received great reviews and attention across platforms. Congrats for fighting your way back, Brandless!
2 | www.MayfieldHeightsCPA.com
Published by Newsletter Pro | www.NewsletterPro.com
Made with FlippingBook Ebook Creator