How To Improve Employee Education As a Small Business Owner

Being a business owner ourselves, we feel that financial education and empowerment of everyone, including your staff, is extremely important. As a small business owner, do you ever feel that there’s more you can be doing to better and further the financial education of your employees? Creating a work environment where your employees are given the proper resources to understand the full scope of their benefits and become financially literate is key to creating a team that can make sensible and educated decisions regarding their financial futures.

It’s easy to let your finances get away from you, especially when you are busy with day-to-day life and feel that you have the basics taken care of. However, as a business owner, we encourage you to help your staff see beyond that financial comfortability and challenge them to set themselves up for financial success by contributing to their 401(k) for retirement, seeking financial advice, and asking questions about all the benefits you may offer. We know that you are most likely too busy and pre-occupied to answer financial wellness and financial benefit questions from your staff, which is why we created a service to alleviate this weight from your shoulders. 

We’ve found that companies who offer financial wellness programs have less anxiety-ridden and financially stressed employees. According to a nationwide survey from Bank of America, “91% of employers see higher employee satisfaction when they offer resources to manage overall wellbeing.” This finding reinforces the need for stronger financial education, especially when it comes to retirement and setting financial goals in our country as well as within our firms. Reducing the financial anxiety of your employees should not only increase their workplace satisfaction but efficiency and work product.

As a business owner and entrepreneur, it is easy to get sidetracked with miscellaneous tasks and other aspects of keeping your company running, but it’s important to not only make sure your employees are happy, but are on the road to financial success. If you find yourself too overwhelmed or don’t feel you have the necessary expertise to educate your employees regarding their finances, consider hiring a financial planner or 401(K) consultant as a guide. At Sherman Wealth, we specialize in 401(k) education and can also serve as a financial fitness coach for your company. If you feel that your staff needs more financial empowerment, coaching and guidance, contact us at or schedule a complimentary 30-minute consultation to discuss your company’s financial needs here.


What To Know On The Secure Act 2.0 Provision

At the beginning of the year, we posted a blog discussing the ways that the Secure Act 2.0 promised to provide changes to help many Americans’ retirement plans, including over 90 updated retirement plan provisions. More recently, a provision was passed expanding fee-for service planning opportunities for small business clients and their employees. So, let’s take a look at what this means for you.

When Congress passed the Secure Act 2.0, they increased the incentives for small businesses to create new retirement plans, particularly for businesses with 50 or fewer employees. “Beginning in 2023, an eligible employer with 50 or fewer employees may claim up to 100% of its qualified startup costs for adopting and maintaining a new SEP, SIMPLE IRA, or qualified plan (like a 401(k) plan), and the credit may be claimed for three years. Employers with 51 to 100 employees are subject to the limits specified in the original Secure Act.”

Under the Secure Act, qualified startup costs for retirement plans are defined as the ordinary and necessary expenses paid or taken on by a small business to establish a qualifying retirement plan, and educate employees regarding the plan. How these retirement plan admin fees are paid is either by the participant or the sponsor, depending on the set-up and structure of the plan. Many retirement plan fees are paid by plan participants and are not eligible expenses that can be claimed under the qualified start-up cost tax credit, which is why you want to be careful when analyzing what method is best to pay for the plan admin and education expenses. One method that is very attractive is a fee-for-service engagement with a financial planner.

A fee-for-service engagement allows businesses to qualify for the qualified start up cost tax credit. “Under a fee-for-service engagement, costs paid by the employer to establish, administer, and provide employee education for a new retirement plan all qualify as eligible expenses that the business can claim on its tax return.” Companies with 50 or less employees are able to claim 100% of eligible expenses, up to a maximum of $5,000, for each of the first three years from the start of the new retirement plan, deeming as a very attractive incentive for not only the employer but also the plan participants.

If you own a small business and are thinking about implementing a new retirement plan for your company, let us know as we are here and happy to help establish the plan and educate your employees on the plan details and financial literacy. This tax credit is a great benefit for employers to take advantage of, and we are happy to help you understand it further. If you have any questions, email or schedule a complimentary 30-minute call here.

Here’s What You Need to Know About the Updated PPP Package

The popular Paycheck Protection Program (PPP), which provides forgivable loans to small businesses to keep them afloat during the pandemic, will reopen with a few changes as the federal government attempts to better target the money to the underserved, smaller businesses that need it most. 

Below you will find some key facts from the updated stimulus package. Check here for further information and details. 

  • The PPP was re-upped by the $900 billion stimulus package President Trump signed just after Christmas. 


  • The Small Business Administration will restrict lending the first two days of the program, to community-based lenders like CDFIs making loans to first-time borrowers. 


  • That restriction follows criticism that businesses with strong banking relationships and more resources were more easily able to access money from the first round of the program than were their smaller, less-resourced peers. 


  • Then the program will open up to second-time borrowers that can demonstrate losses of at least 25% between 2019 and 2020 and that have 300 employees or fewer. 


  • The SBA said that larger lenders will be able to begin making loans under the updated program “shortly” after Wednesday, January 13, but did not specify an exact date. 


  • This new round of the PPP will be open through March 31, 2021.


  • The new stimulus bill set aside $284 billion for the current tranche of the PPP.

As we learn more about the details and regulations of this PPP package, we will share with you. Please reach out with any questions or if this new stimulus may impact you in any way. You can book a free 30-minute consultation on our site here.

The CARES Act’s New $300 Charitable Contribution Deduction for 2020

The holidays are a great time to give back to people in need, especially if you are in a position to do so. If you are thinking about giving back this holiday season, you’re in luck, you can now get a tax deduction for it. 

The CARES Act, which was signed into law this spring, included a “partial above the line deduction for charitable contributions. This allows people who take the standard deduction — which is $12,400 for single filers and $24,800 for married-filing-jointly in 2020 — to claim a deduction of up to $300 in donations. You’d claim this tax break when you file your 2020 return next spring”, according to the IRS

Accordingly, fewer people also claimed a tax break for donations: 14.8 million returns claimed a charitable deduction in 2018, down from 37.9 million in 2017.

So what do you do once you donate? If you expect to take a write-off for the cash you’re giving to your favorite charity, make sure to keep the receipts for your records. According to the IRS website, You typically can write off a donation of $250 or more  if you have a written receipt or email of proof. 

At Sherman Wealth, we are very passionate about giving back to the community and supporting our local charities, especially around the holidays when we are appreciating all we are thankful for. We encourage those who are in a position to give back to find local charities to support and do as much as they can. If you have any questions about charitable contribution deductions or your portfolio, please contact us at or set up a free 30-minute consultation here

Below are some local charities we are passionate about: 

Nourish Now, No Kid Hungry, Manna Food Center, Jewish Federation of Greater Washington, So What Else, Montgomery County Coalition for the Homeless, JCC, and A Wider Circle 


Small Businesses Agonize Over PPP Loan Forgiveness

The Paycheck Protection Program (PPP loan) pumped $525 billion in forgivable loans to small businesses from early April through early August. The program has been praised for saving jobs and buoying struggling businesses but criticized for its clumsy rollout, fraud, and for favoring companies with established banking relationships over underbanked ventures. 

In a recent report, the Government Accountability Office urged the Small Business Administration to identify and respond to multiple PPP risks among other recommendations for other agencies to improve the government’s response to the pandemic.

One reason the PPP was so attractive to borrowers was the potential to turn loans into grants. For that to happen, each borrower needed to complete a forgiveness application and submit it to their lender, who would work with them to make it stronger. In a study reported by Politico on September 19th, the agency had received “96,000 forgiveness applications– representing fewer than 2 percent of the total loans– but has not approved or denied any of them.” 

Because of the PPP’s changing rules, there’s confusion around the forgiveness process, says Brian Pifer, vice president of entrepreneurship at advocacy group Small Business Majority, which has about 65,000 members in its network. Multiple trade groups are supporting two bipartisan bills that would forgive PPP loans under $150,000 once the borrower completes a one-page form, according to the American Bankers Association. There’s also broad support to relaunch PPP, though the Brookings Institution is suggesting tax credits would be more effective, Bloomberg News reported

What should a business owner keep in mind about the forgiveness process?  We spoke to Chris Levy, a senior vice president at Pursuit, a community development financial institution which has funded over 7,000 PPP loans totaling nearly $500 million to businesses in New York, New Jersey, and Pennsylvania. Its median loan size was about $20,000. Levy says his institution got money to “the smallest of the small businesses out there–the ones that were really struggling.” 

Levy listed a few pieces of advice for small business owners to keep in mind: 

  1. You Have Some Time. Borrowers understandably are eager to complete the forgiveness application and put the PPP loan behind them, says Levy. You can apply for loan forgiveness as soon as your lender starts accepting forgiveness applications. But you should wait because Congress will likely pass legislation that will make the forgiveness process easier, he says, including automatic forgiveness for PPP loans of $150,000 or less.

While some lenders are accepting applications, Pursuit and many others aren’t yet. “The main reason we’re waiting is because we don’t feel like it’s appropriate not only for us to waste our time but for our borrowers to waste their time going through a super detailed forgiveness application that is only going to get easier,” says Levy. 

  1. Review the rules and basics. You can get loan forgiveness on what you spend on payroll, rent, and other eligible expenses during the so-called covered period—the 24-week period beginning the day you receive the funds from your PPP loan. The rules have changed significantly as PPP has evolved: The minimum amount that must be spent on payroll is 60% (originally it was 75%). You can spend up to 40% on non-payroll costs such as rent, utilities and mortgage interest. The loan maturity is now five years; it used to be two years.


Once the 24-week period ends, you have 10 months to submit your forgiveness application to your lender, according to this FAQ from the SBA. You don’t need to make any payments until the SBA makes a decision. If only a portion of the loan is forgiven, or if the forgiveness application is denied, the balance due on the loan must be repaid by the borrower on or before the maturity date of the loan.


  1. Chew on this scenario. A business owner who received a PPP loan in April is allowed to wait until December to apply through their lender for forgiveness. The SBA might not make a determination until February. The borrower would not make any payments during that 10-month period. “The deferment period is essentially undefined and will not be defined until the SBA makes a determination,” says Levy. “It allows borrowers more time.”
  2. Stay Calm.  “The one thing we’ve found throughout this whole process—the more patience you have, the better the rules get for you,” says Levy. Keep payroll records as you normally do and communicate regularly with your lender, he says. He urges business owners not to drive themselves crazy. The 3508 EZ form simplifies the rules and should work for almost everyone, Levy says. “It’s really made it that much easier for everyone to obtain full forgiveness. The forgiveness documentation is the same documentation that they had to use when they initially applied, he says. “If they got the loan in the first place, they’ll be able to get forgiveness.

While the coronavirus has put a detrimental strain on many businesses, small businesses have been struggling a great deal. For any small business owners out there, stay calm, educate yourself on the situation and remain positive. The PPP loan has helped so many small businesses stay afloat during this economic crisis. If you have any questions on your small business or its financial situation, we’d be happy to chat. Please reach out to us at and refer to our other blogs for further resources.

Are Your Employees Stressed At Work?

Implementing a Financial Wellness Program for Your Employees: A Guide

Over the past few months as we have all been living through the pandemic, anxieties are at an all time high, especially those relating to finances. There have also been notable impacts on employee productivity and engagement. As an employee, your career should be a source of financial relief and security, not of worry and additional stress. 

Given these unprecedented circumstances and the uncertainty that comes with COVID-19, ensuring that your employees feel a sense of financial stability is more important than ever. Implementing a financial wellness program within your company is a great way to ease anxieties and improve workplace satisfaction amongst your employees.  

What Is a Financial Wellness Program? 

Financial wellness programs are designed to alleviate the financial worries of your employees. They go beyond mere financial understanding; they promote a healthy relationship with money by offering the appropriate tools and guidance. These programs combine employee-centric education and application to yield better results. 

How to Implement a Program 

There’s no perfect financial wellness program; the best program for you depends on the nature of your business and the needs of your employees. There are many ways you can go about it: do you want to use a platform specially designed for financial wellness programs, or do you want it to be more of a program customized in-house? What do you want the focus to be? What would best benefit your employees?

Here at Sherman Wealth, we offer financial wellness services for employees and work with many local small businesses in establishing and implementing the right financial wellness program for their firm. We strive to develop a well-being strategy that will empower employees to learn, plan and make real changes to reach their goal of financial stability and success. If your company is in need of a financial wellness program, reach out to us and we will be happy to help you implement a unique program that is right for your team. Please let us know if you have any questions and contact us to get started!


Who is responsible for 401(k) participation?

If someone were to ask the famous Nobel Prize winner Richard Thaler this question, I think his answer would clearly be “managers and executives”. And to be honest, he makes a pretty compelling point.

As a man who has spent his career studying human behavior, Thaler draws the conclusion that humans are predictably irrational and consistently make choices which are not in their best interest. While this seems very simple on the outside, the findings are quite complex. Here’s a great example: only 50% of US workers participate in a workplace retirement plan. While some don’t have access to this type of benefit, many do have access, and simply don’t take advantage of it. Yet, we know that saving for retirement (and taking every advantage) is the optimal route to take.

Most of us would say we make wise decisions for ourselves and our families, but the data does not back up this sentiment. Thaler has also found that people only save money if it’s automatic. Thus, he feels to most important aspects of a 401(k) offering are:

  • Automatic enrollment
  • Automatic escalation
  • Good default low-cost investment options
  • Helping individuals roll their 401(k) into an IRA when they change jobs

Again, this seems like a very easy concept for CEOs and managers to adopt, but that doesn’t seem to be the case. Thaler proclaims, “If the employees at your firm are not saving enough for retirement, realize that it is your fault. And that is because we know how to make saving for retirement much easier and more successful.” But since so many workers aren’t saving, he places the blame on the managers themselves.

But why should you care? Because the financial wellness of your employees will affect the bottom line of your business. A report released by Gallup on the Economics of Well-being tells us that having a low sense of financial stability can lead to “stress, anxiety, insomnia, headaches, and depression”. All of these emotions lead to reduced productivity and output. And worse? Employee retention also tends to spike.

Step one: HR managers and senior executives should make 401(k) participation an “opt-out” decision. This creates a wall to prevent individuals from harming themselves by passing on automatic retirement savings. Second, escalating the amount of these contributions -over time – will allow your employees to increase their savings rate. Most studies have shown that your monthly savings rate is the number one statistic that will decide whether you will be able to retire on time or not.

Third, it is imperative that these retirement plans have low-cost investment options for employees to choose from. Simple index funds really will get the job done. In much of his work, Thaler points to the fact that humans are consistently irrational, so nudging them towards smart investment choices is important.

The key to checking off these boxes is most likely automation. Managers and CEOs have the authority to make these decisions. In theory, the financial stability of your employees (and the ability for them to feel that stability) is largely dependent these types of executives. However, when said managers do indeed take these steps, it’s really a win-win situation for everyone involved. Your employees’ minds aren’t elsewhere, worrying about paying the mortgage or whether they have enough saved to cover a medical emergency. Employees come to work with a clear head. They feel happier and therefore you get more production out of your employees.

If you are a small business owner and feel that you may be spending too much on 401(k) plan costs or that your employees are bringing non-related stress into the workplace, please feel free to reach out to us. We work with multiple small business and their employees in the DC Metro to help bring a sense of peace and stability to personal financial planning issues.