Coming in 2012: Change for Retirees
March 12, 2011
Tags: Elder Law, employee, pension, Retirement Planning, small business owner, Social Security
Last month the Obama administration released their budget for the 2012 fiscal year, and included in that budget were a few things that retirees (or those close to retiring) will want to be aware of. If you own a business you may want to keep reading as well, as some of the proposals within the budget would affect not only retirees, but also small business owners. This article in the US News and World Report describes some of the proposals included in the budget, including:
Automatic workplace pensions. This would require employers (with the exception of very small businesses) that do not currently offer a retirement plan to enroll their employees in a direct-deposit IRA account. Employees would have the ability to opt-out if desired.
Tax incentives to create retirement plans. This proposal would increase the value of the tax credit to small businesses that start new retirement plans. The current maximum credit is $500/year for up to 3 years, the new proposal would increase that to $1000/year.
More Social-Security funding. Obama’s budget would allocate $12.5 billion to the Social Security Administration, up $1 billion since 2010. The primary aim of this increase would be to “reduce the backlog of disability claims and decrease Social Security fraud.”
But not all of the proposals included in the budget are beneficial to retirees. Here are a few things you may want to watch out for:
Pension insurance premium increases. “The budget proposes giving the Pension Benefit Guaranty Corporation… the authority to adjust premiums and take into account a company’s financial condition when setting premiums.” Although this is certain to result in premium increases, the increases would be gradually phased in.
Senior Community Service Employment Program funding cut. The proposed budget would reduce funding for the Senior Community Service Employment Program by 45 percent, and would transfer the program from the Department of Labor to the Department of Health and Human Services. Seniors who hope to retrain for new jobs in their retirement years may find this more difficult to do than they expected.
How To Boost Your Social Security Income: Little Known Strategies!
August 27, 2009
Approximately $10 BIllion in Social Security Benefits go unclaimed every year, primarily because married couples do not know how to optomize their social security benefits. Being wise about these spousal benefits and how they work, can result in increased social security income for a married couple. According to a recent article in AARP Magazine by Lynn Brenner, in some cases by electing a spousal benefit first, and by later electing your own benefit on your own work record, you may increase your household income substantially over time. Since you can’t get both of them at the same time, the trick is to elect these benefits consecutively and in the right order. Sometimes you can opt to claim one, and then later opt to claim the other, with the net result being increased income for the household. The article discusses little known strategies for Two-Income Couples, One-Income Couples, and Divorced Singles. Well worth reading!
Good News. . . You’ll Live Longer…
August 25, 2009
Tags: life expectancy, retirement, Retirement Planning, Social Security, US News and World Report
Planning for retirement often requires a fine-tuned equation which includes such variables as where you plan to live, how many years you’ve worked and how much social security you can expect, health care expectations, long-term care, and especially your life expectancy. Well, part of that equation is about to change, because according to U.S. News and World Report the life expectancy in the United States has increased 1.4 years since 1997.
It may seem like a small change, but the article reminds us that when planning for retirement “it’s also important to note that many people live far longer than average and life expectancy increases every year.” And time is the great equalizer, it seems. The expectancy gap between the lifespan of men and women is closing, as is the gap between Caucasians and African Americans.
What this means is that if you planned for your retirement based on an equation from 10 years ago, you may need to revisit your plan with your financial advisor. “Most financial advisers recommend budgeting for at least 20 years of retirement and preferably 30 years in case you do live into your 90s.” Planning this way means you may end up with a surplus, but “it’s better to leave something behind for your children than to use up your entire savings and have no income outside of Social Security.”
And if you do think you may have a surplus to pass on to your children and grandchildren, our firm can help you protect your retirement nest-egg right now, AND for future generations.
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