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Success Stories

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Technology Firm Makes Minor Changes to Achieve Massive Results

A technology company in Tennessee had a problem. Their employee base consisted mostly of younger employees who were compensated well but didn’t see the value of the 401(k). Because of this, participation and contribution rates were low from this group of employees.

Because the rates were low, the company was having trouble passing annual testing, and to make matters worse, their highly compensated and key employees were extremely limited in their ability to contribute to the 401(k) plan. This situation also made recruiting and retention of highly compensated employees much more difficult. They considered a safe harbor match to eliminate the need for testing, but determined it was not something they could add to their current budget.

The company partnered with Ellis Retirement Services to do a comprehensive review of their 401(k) program, and to design and implement solutions in an effort to optimize the plan for both non-highly and highly compensated employees.

Plan Basics

  • Technology industry
  • 225 employees
  • No match
  • Low participation and contribution rates

After a thorough review and analysis of their plan, the Ellis Retirement Services team recommended two primary changes to their current 401(k) program. First, we recommended that the company add what is sometimes called a “stretch match.”

The company couldn’t afford to implement a full safe-harbor match, but they felt they could do something. After analyzing their budget, they determined that they could match up to 2% of compensation. Traditionally, when this is the case, the company might add a match formula of something like “dollar for dollar up to 2% of pay.”

In this situation, however, we needed to encourage employees to contribute a higher percentage of pay, so we decided to “stretch” the match with a different formula. The formula we implemented was $.25 of every dollar up to 8% of pay. Not only would this formula limit the company’s financial exposure to 2% of pay, but it would encourage employees to contribute 8% of their salary to take full advantage of the match. 

In addition to the match, our team stressed the importance of implementing a full financial education and wellness program for the employees. A 401(k) plan can be structured in amazing ways, but if the employees don’t understand how it works or how it provides value to their lives, they will often be hesitant to participate.

Based on the demographics of the employee base, it was determined that a full education program using multiple methods and mediums would need to be employed. The Ellis Retirement Services team designed an educational program that delivered education via webinars, virtual office hours, email newsletters, short-form videos, and one-on-one meetings to all employees. In addition, the educational program was designed to help employees with all aspects of personal finance, not just the 401(k). 

Six months after implementing the stretch match and educational programs, 401(k) participation rates were up 48%. In addition, highly compensated employees were now able to defer 6% of pay as opposed to their previous limit of 2% of pay. Most importantly, though, employees were surveyed, and they conveyed that they were must less stressed about finances in general since the addition of the new 401(k) educational programs.

If you would like us to take a look at your 401(k) program, please reach out to schedule a meeting. We’d love to learn more about your company and see if we might be able to help.

Couple With Adult Special Needs Child Prepare For Retirement


Jim and Nancy were worried about their future, but also the future of their adult special needs son. Jim was already retired and trying to navigate the complexities of social security and the next phase of life. Nancy was working, but worried about her future retirement plans, and whether or not she would be able to retire anytime soon.

Retirement Planning Individual

Most importantly to them, however, was the plan for taking care of their adult special needs son, who was and would continue to be in their full-time care. The team at Ellis Retirement Services started with a thorough review of their entire financial situation, but also spent much of their time making sure they fully understood the goals, objectives, and concerns that Jim and Nancy had.

After gaining an understanding of the big picture, the Ellis Retirement team began to develop a plan that would adjust and evolve over time. First, they needed to address the building blocks of Jim and Nancy’s situation. That meant doing a deep dive in their estate plan, which wasn’t in place, and coordinating with an estate planning attorney to ensure they had the proper setup to protect themselves and their family.

For Jim and Nancy, that meant setting up effective living wills and coordinating those wills with a living revocable trust. The trust would allow them to protect their assets while they are living, but also ensure their assets and directives were clearly organized for their family members when they pass away. A special needs trust was evaluated, but it was determined that it wouldn’t accomplish what they wanted based on their situation.

After the estate planning process was completed, including retitling of necessary assets, their investment portfolios were consolidated, organized, and reallocated to align with their future goals and objectives. They had both tax-deferred and taxable investments, so the strategy needed to not only account for their risk tolerance, timeline, and goals, but also be positioned to minimize their tax exposure both now and in the future. The plan also included realigning outside investment accounts such as 401(k)’s held at their place of employment.

That process led to a full review of their recent tax returns. Though Ellis Retirement doesn’t prepare tax returns, they review all aspects of previous tax returns to develop and implement a sound tax mitigation strategy for the future. This includes tax-sensitive investments, Roth conversions, income analysis, and charitable giving.

Finally, a plan was developed to allow Nancy to determine a specific age she can retire should she choose to do so. The plan included specific dollar amounts that they would be able to live off monthly in retirement for the rest of their lives. This monthly “paycheck” was determined after analyzing all of their accounts, as well as social security issues, and pairing that with their ongoing monthly needs.

Once the initial recommendations were presented and implemented, the plan was then adjusted over time as the circumstances of the family changed. After going through the entire planning and implementation process, Jim and Nancy said they “felt like a weight was lifted off their shoulders” and that they “no longer worry that they will be able to take care of their family and prepare them for the future.”

If you would like us to learn more about your retirement planning needs and see if we can help, please reach out to us directly to schedule a call or meeting!

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