Mission Square Financial Wellness Presentation - Oct 22, 2025

Danny Kirath, a local representative from Mission Square (formerly ICMA RC), delivered an educational presentation on the City of Marietta's retirement benefits during Financial Wellness Week. The session focused on the 401A supplemental social security account, the optional 457 deferred compensation plan, Roth IRAs, investment strategies, beneficiary management, and retirement withdrawal options. The presentation concluded with a Q&A session and a contest giveaway.

Consent Calendar

• Routine approvals and unanimous actions were not explicitly documented in this presentation transcript; the session consisted of educational content and Q&A only.

Public Comments & Testimony

Audience Questions and Positions

• Target Date Fund Emails: An attendee questioned whether target date funds generate trade notification emails; Kirath clarified that target date funds do not trigger trade alerts for participants, whereas Managed Accounts do.
• Managed Account Fees: An attendee inquired about the fee structure for Managed Accounts; Kirath confirmed the fee is 0.5% on the first $100,000, decreasing by 0.1% for every additional $100,000.
• Legacy 401(k) Transfers: An attendee asked about moving funds from a previous employer (including defunct ones) to the City's account; Kirath expressed full support for rolling over these funds to consolidate assets, noting that transfers are non-taxable events.
• Vested Rights: An attendee asked if moving a vested 401(k) from a past employer was advisable; Kirath confirmed full support, stating that vested amounts are owned 100% by the employee and can be transferred without financial loss.
• Roth IRA Taxation: An attendee asked about tax implications for withdrawals from Roth IRAs; Kirath clarified that contributions are tax-free upon withdrawal, while non-qualified earnings withdrawals incur federal and state taxes.
• 457 Plan Provider: An attendee asked if the City's 457 plan is the same as the "Nationwide" plan; Kirath clarified that while the City administers the 401A through Mission Square, participants have a choice regarding the 457 provider (Nationwide or Mission Square).
• Asset Consolidation: An attendee previously worked with Kirath on asset consolidation, expressing full support and ease regarding the debt reduction and simplified management achieved.

Discussion Items

Retirement Income Sources and Goals

• The speaker emphasized that a "happy retiree" typically has between two and five sources of income, including pension, the 401A (supplemental social security), 457, IRAs, part-time work, and insurance cash value.
• Key financial goals discussed included avoiding financial burdens on family, funding future education, covering rising medical expenses, and mitigating the risk of outliving savings.
• Kirath noted that medical expenses are often the most underlooked and significant negative change in retirement.

401A and 457 Plan Mechanics

• 401A Account: Described as a supplemental social security account where the City contributes 6.13% of gross pay after one year of employment. Employees cannot change contribution amounts or stop contributions while employed, only investment selections and beneficiaries.
• 457 Account: An optional retirement plan where employees contribute from their own paychecks. Participants have full control over contribution amounts (faucet handle analogy), investment choices, and can pause/restart contributions at any time.
• Contribution Limits (2026): The speaker provided 2026 limits: $24,500 for those under 50, $32,500 for those over 50 (including catch-up), and $49,000 for those utilizing the "pre-retirement catch-up" provision on lump-sum payments (e.g., vacation pay).

Investment Options and Strategies

• Target Date Funds: The default option for 401A participants, based on the attendee's age when turning 65. These funds automatically rebalance from aggressive equity-heavy portfolios to conservative bond-heavy portfolios (approx. 65-75% bonds) as the target date approaches.
• Managed Accounts: A service where a dedicated consultant manages the portfolio with discretionary trading authority to mitigate market losses (citing a recent example of portfolio reallocation during market volatility). Fees are covered by the City.
• Self-Directed Portfolios: Attendees retain the ability to build their own portfolios if they are comfortable with fund selection.

Roth IRA Specifics

• Described as a post-tax savings tool. Contributions can be withdrawn tax-free and penalty-free at any time. Earnings can be withdrawn tax-free if the account is open for five years and the participant is over 59½, or for specific exceptions like qualified education expenses and first-time home purchases (up to $10,000).
• 2026 contribution limits are projected to be $7,500 for under-50s and $8,600 for over-50s (including catch-up).
• Unlike 401A/457, Roth IRAs can be funded via direct deposit from a bank account without payroll involvement, even after leaving employment.

Beneficiary Management

• The speaker strongly advocated for updating beneficiaries, noting that the City does not automate this process.
• Benefits of designating beneficiaries include avoiding probate, protecting assets from creditors, and ensuring tax efficiency for heirs (e.g., spouses have special rules, while non-spouse heirs have a 10-year window to withdraw inherited funds).
• Minors can be named but require legal guardian oversight.

Withdrawal Strategies

• Withdrawals from 401A and 457 are flexible, allowing single payments, installment payments, or time-limited distributions.
• A Cost of Living Adjustment (COLA) option is available to increase withdrawals slightly based on inflation.
• Required Minimum Distributions (RMDs) must begin at age 73 (potentially rising to 75 in coming years) for pre-tax accounts.
• Rolling over all funds at once is discouraged due to the risk of triggering a high tax bracket.

Financial Planning Services

• The City provides free access to Certified Financial Planners (CFPs) via Mission Square.
• Free social security analyzer sessions are available to all, while full financial plans are offered to participants with $100,000 or more in assets under management.

Key Outcomes

• The City of Marietta provides a City contribution of 6.13% to the 401A supplemental social security account after one year of employment.
• The City offers two 457 plan providers (Nationwide and Mission Square) for employee choice.
• Attendees are encouraged to utilize the 457 and Roth IRA to supplement the 401A, aiming for a total retirement savings rate of 10-15% of income.
• Free financial planning services (including Social Security analysis and portfolio management) are available to attendees through Mission Square's assigned CFP, Brian Filak.
• A $100 prize was awarded to an attendee (Katrina Dooley) at the conclusion of the meeting.