The Pension Protection Act of 2006 (PPA) turns five years old this year. As companies rush to shore up pensions or cancel underfunded plans, you need to protect yourself from common pension mistakes. PPA was designed to close loopholes in the pension system and addresses problems for the roughly 34 million Americans covered by traditional pensions known as defined-benefit plans.
PPA requires pensions be fully funded by 2015. It also prevents companies with big pension deficits to skip annual contributions and still pronounce their plans healthy. Another major goal of the bill was to shore up the health of the … Read the rest
When our generation was growing up, we were taught about Social Security, and many of us had grandparents who were reasonably comfortable with a combination of their investment income and their government checks.
Today, not so much.
Over the last few years, we have seen the market crash and burn, and Social Security is on its way toward doing the same. So, if we’re scrambling to salvage our retirement income, imagine what it will be like for your kids. If you haven’t done that already, here is some good news for you.
When we were just starting out … Read the rest
All employer plans are required to offer you an annuity payout in the form of monthly income. These payments will continue for the rest of your life (in the case of your 401(k), you can surrender the balance to an insurance company that will guarantee payments for life; the amount of monthly payment will depend on the balance in the account and your age). When considering early retirement, the annuity payouts will be smaller, because you have a longer life expectancy. The payments are taxed as ordinary income and don’t qualify for any special tax treatment for federal income … Read the rest
When should I start drawing my Social Security benefits?
I’m asked this question more often than any other by my clients who are retiring before Social Security’s normal retirement age. They all want to know if they should begin receiving benefits early with a smaller monthly amount, or wait for a larger monthly payment later they may not receive as long. In answering this question for yourself, you should take the following factors into consideration.
You could consider drawing Social Security benefits early if:
• The financial challenges facing Social Security in the future, which I discuss in more … Read the rest