In dollar cost averaging, the following must be made clear:
�?�         (a) The investor will incur a loss under such a plan if he liquidates his account when the market value of his accumulated shares is less than his cost.
�?�         (b) He is investing in securities subject to market fluctuations, and the method involves continuous investment in such shares at regular intervals regardless of price levels.
�?�         (c) He must consider his financial ability to continue the plan through periods of low prices.
�?�         (d) Such investment plans do not assure a profit or protect against loss in declining markets. See FINRA Conduct Rule 2210(d)(2)(1).

Evaluate the options available to you today based on their value today. Consider the following criteria for your investment decisions:

�?� Time Frame- Number of years until the money is needed
�?� Inventory- List of investments you currently own
�?� Options- List of investments currently available
�?� Look Forward- Best returns likely for the next five years.

Following my blurted response there was dead silence for what seemed like forever. I then asked my client three questions:
1. Are interest rates low or high right now?
2. Over the next two years do you think interest rates are going to go up or down?
3. Why would you commit to locking your money up at a low rate for five years when you think the rates are going to increase soon?

This is could have been a classic case of making a poor decision for the upcoming five years based on the past five years. See �??OBJECTS ARE CLOSER THAN THEY APPEAR.�??

To protect individual�??s right to keep their insurance benefits COBRA regulations require employers to allow employees to extend insurance coverage past the end of their employment. Failure to correctly comply with COBRA can be very expensive to an employer. There are two potential high costs to the failure to correctly comply or administrate COBRA benefits.

1. Financial penalties the government assesses to enforce compliance.
2. The potential to �??buying a heart�?? if COBRA isn�??t administrated correctly.

The greater risk comes from attempting to comply with COBRA but not doing it correctly. To date, I have yet to find an employer doing COBRA administration themselves internally that is doing it correctly. Thinking they have COBRA handled they expose themselves to �??buying a heart.�?? Financial penalties for non-compliance can be severe, as addressed in �??A Dollar Saved �?? Thousands Spent.�??  But that isn�??t the biggest risk to an employer.

The greater risk is having a terminated employee of dependent that didn�??t get proper notification of their COBRA rights come up with a major medical expense. COBRA provides that the individual has 60 days to elect continuation of their medical benefits. If the COBRA guidelines for notification are not followed then their 60 days doesn�??t start. If that individual then comes down with a condition requiring expensive medical care seeks coverage the employer may be on the hook to pay for the expenses. If the normal period has passed to extend the coverage the insurance carrier will deny adding the individual to the insurance plan. Then the employer can end up being liable for the medical expenses.

All this risk can be minimized by administering COBRA correctly. Reviewing your COBRA practices and outsourcing COBRA administration to a company that specializes is the best approach. Use the three questions in �??Playing with Snakes�?? to start. You don�??t want to buy a heart.

It is good business to control costs. So I am not surprised when employers are proud to say that they don�??t have to pay anything for administration and record keeping on their retirement plan. Zero or nothing sounds like a really good deal. If an employer does not have to write a check for administration and/or record keeping it doesn�??t mean they are getting a great deal.

The biggest difference between the employers that write a check and those that don�??t is that the check writers know exactly how much they are paying for these services and the others do not. Experience has taught that if you don�??t know how much the true cost is then you are likely paying too much. It is hard to think that some employers believe that the insurance companies, investment companies, banks, trust companies, and other providers of retirement plans doe the work for free. How much does free cost? If you don�??t know you should. There is a cost to providing all of the following services for a retirement plan:

·        Administration

·        Record Keeping

·        Custody of assets

·        Education Materials

·        Investment Advice

·        Investment Management

Employers and their employees can be paying several thousand dollars more through hidden charges than they should. It pays to know how much free is costing you.

Today the scariest snake I deal with is COBRA. The COBRA in business isn�??t really a snake, but an acronym. An acronym for the legislation that provides employees and their rights to continue employer sponsored benefits when they no longer work for the employer. It always surprises me the number of employers that are playing with this dangerous snake without recognizing the risk.

The key to COBRA is recognition and respect. Recognizing when COBRA applies and what benefits it covers. Respecting how complex the guidelines are and the substantial costs that can be incurred if the guidelines are not followed.

Employers need to answer three primary questions to determine proper recognition and respect for COBRA:
1. Does COBRA apply to us?
2. What does COBRA require us to do?
3. Do we administer COBRA internally or outsource it?

Not knowing the answers to the above questions is like playing with snakes. You may never get bit. But, if you do the consequences range from painful to fatal. See �??Who wants to buy a heart?�??

What wasn�??t different was who showed up. Every time we do a service project I can almost predict who will and who will not show up. Even to the point that I can give you names of who will arrive late and/or leave early!

Maybe it�??s just personalities or maybe it�??s more. I can�??t say that I�??ve always been one to stop and volunteer. In fact, I think I spent much of my life so busy that I missed out on and had an excuse for every opportunity to give of my time. I am trying to reverse that now. Sorry to be so mushy around the holidays, it�??s just that I had so much fun this last year meeting new people, cheering on my friends, and helping those unable to help themselves. Hopefully I�??ll see you out there again next year as well!