![\"\"](\"http:\/\/www.enannysource.com\/blog\/wp-content\/uploads\/2012\/07\/stephanie.jpg\" "\\"stephanie\\"")
<\/a>Recently, I had a chance to ask Stephanie Breedlove<\/a>, founder and partner of Breedlove & Associates, which is a payroll, tax & HR firm dedicated exclusively to serving the household employment industry, some questions about retirement savings for nannies. She shared with me some great insight into a new savings solution they\u2019ve discovered. Here\u2019s how our interview went.<\/p>\neNannySource:<\/strong> For years nannies have struggled to find retirement savings options. Can you tell us about what you’ve found out?<\/p>\n Stephanie: <\/strong>There are a lot of retirement savings vehicles available, but most of the tax-advantaged plans are extremely difficult to administer, are expensive, or both.\u00a0 Families don\u2019t have time to administer complex retirement plans.\u00a0 And the cost to have someone else do the administrative work for them (usually $200-$500 per year plus investment management fees) is money that should be going \u2013 directly or indirectly \u2013 into the nanny\u2019s retirement account. After a lot of research, we found a solution that we believe fits the nanny industry extremely well.\u00a0 It\u2019s a Roth IRA from Vanguard.\u00a0 Vanguard is among the most respected financial institutions in the country.\u00a0 They have created a simple retirement product that has no start-up costs, no annual administrative fees, and an investment management fee of only 0.2%, which is one-fifth the national average. The Roth IRA is owned and controlled by the employee so it\u2019s not dependent on an employer.\u00a0 It uses after-tax dollars so the employee or employer may contribute to the account \u2013 up to $5,000 per year ($6,000 per year if the employee is 50 or older).\u00a0 Then all growth is tax-free and there are no taxes upon withdrawal at retirement age. The cost, flexibility, portability, and control are all perfect for the nanny industry \u2013 giving nannies the ability to supplement their retirement income if they desire without any cost or administrative burdens.<\/p>\n eNannySource:<\/strong> Why is it important for nannies to plan for retirement?<\/p>\n Stephanie: <\/strong>Social Security and Medicare taxes (paid by employees and matched by their employers) provide a critically-important base of income and medical insurance for retirees.\u00a0 But it\u2019s really just a base.\u00a0 For most Americans, it will cover the necessities \u2013 but it won\u2019t afford the lifestyle that most people want in their golden years. That\u2019s where tax-advantaged retirement savings plans come in.\u00a0 They make it possible to amass a significant nest egg \u2013 especially if you start early.\u00a0 The compounding effect of tax-free growth over many years means you don\u2019t have to sacrifice a lot of current earnings to have significant savings 25-30 years down the road. The latest stats show that 10,000 people retire each day.\u00a0 About 9,999 wish they\u2019d saved more and started earlier!<\/p>\n eNannySource:<\/strong> How can nannies present the opportunity to families they work for?<\/p>\n Stephanie: <\/strong>Nannies can let their families know that they want to save for retirement.\u00a0 The family will understand since they\u2019re almost certainly doing the same thing.\u00a0 If they have apprehension, it will probably be in not knowing what kind of plan makes sense, how to set it up, how to administer it, how it should be handled with payroll, what happens if you leave and how much will it cost. The beauty of the Roth IRA from Vanguard is it takes all those questions\/burdens off of the family\u2019s plate.\u00a0 The employee can set up the account and manage the investments on their own with no work or cost for the family.\u00a0 If the employer wants to contribute, they can.\u00a0 But the account is not contingent upon the employer making contributions.\u00a0 The employee can take bonus dollars or any other after-tax income\/savings and do it themselves.<\/p>\n eNannySource: <\/strong>Do you think retirement contributions will become a standard benefit for nannies?<\/p>\n Stephanie: <\/strong>We think it will become more and more common.\u00a0 People are living longer and need larger retirement nest eggs.\u00a0 In addition, there will be a lot of media attention on the possibility of Social Security and Medicare benefit reductions in the future \u2013 all the discussion will raise awareness and prompt more people to take matters in their own hands and save for retirement themselves.\u00a0 Those socio-economic factors, combined with the ever-increasing professionalism of the nanny industry, will encourage more employees and employers to discuss retirement benefits as a part of the compensation package.<\/p>\n eNannySource:com:<\/strong> What else should we know about the Vanguard Roth IRA?<\/p>\n Stepahnie: <\/strong>Breedlove & Associates decided to look for a better retirement savings solution simply as a service to the nanny industry.\u00a0 We do not derive any commissions or income of any kind from Vanguard \u2013 we want to make sure all the money goes directly into each nanny\u2019s account so their golden years will be more golden.<\/p>\n If you are interested in the tax-advantaged retirement savings plans or\u00a0the Vanguard solution, please don’t hesitate to call.<\/p>\n Nannies interested in the Vanguard Roth IRA can contact Vanguard directly by visiting Vanguard Online<\/a> or by calling 800-551-8631.\u00a0<\/strong><\/p>\n Stephanie Breedlove has an undergraduate degree in Finance from the University of Texas and an MBA with a concentration in accounting.\u00a0 She developed an expertise in accounting and information technology during her 6 years with Accenture before founding Breedlove & Associates in 1992, an entrepreneurial company born from her own frustration with paying her nanny professionally.\u00a0 Over the years, Stephanie and Breedlove & Associates have helped over 22,000 families with their No-Work, No-Worry service.\u00a0 www.myBreedlove.com<\/a><\/em><\/p>\n","protected":false},"excerpt":{"rendered":" By Michelle LaRowe Editor-in-Chief Recently, I had a chance to ask Stephanie Breedlove, founder and partner of Breedlove & Associates, which is a payroll, tax & HR firm dedicated exclusively to serving the household employment industry, some questions about retirement … Continue reading