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Just How Accurate Is Your Social Security Benefit Estimate?

Just How Accurate Is Your Social Security Benefit Estimate?

Each year the Social Security Administration (SSA) mails about 15 million benefit estimate Statements to persons age 60 or older who are not receiving Social Security benefits and do not have an online Social Security account. The Statement is also available online to individuals age 18 or older. Among other things, the Statement provides workers with their earnings record and a personalized estimate of their future Social Security retirement benefits. But just how accurate are those benefit estimates? A recent…

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Did You Know? Crimes Committed By Your Spouse May Be Detrimental to Your Pension

Did You Know? Crimes Committed By Your Spouse May Be Detrimental to Your Pension

Our intuition suggests this cannot be the case. After all, YOU did not commit the crime. However, at least in Texas (and possibly some other states) our intuition would be wrong if the retirement savings were jointly possessed during the marriage. A recent Fifth Circuit Court of Appeals decision makes this point abundantly clear. United States v. Berry, No. 19-20050, 2020 U.S. App. LEXIS 6260 (Feb. 28, 2020) In the Berry case, Gwendolyn Berry was convicted of wire fraud, mail…

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Decreasing Fertility and Increasing Life Expectancy Threaten the Solvency of Our Nation’s Social Security Retirement Program

Decreasing Fertility and Increasing Life Expectancy Threaten the Solvency of Our Nation’s Social Security Retirement Program

On November 4, 2019, the Social Security Administration issued a report addressing the funded status of the Social Security retirement program. “Social Security: Demographic Trends and the Funding Shortfall” (Report). The Report’s findings and conclusions should be of great concern to anyone who is, or may be, dependent on Social Security benefits for a comfortable retirement. The Social Security program pays benefits to retired or disabled workers and their families and to family members of deceased workers. It was set…

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Pension Plans May Count Service Different Ways for Different Things

Pension Plans May Count Service Different Ways for Different Things

I frequently receive calls from pension plan participants who are confused about their plan’s rules for counting service for vesting, participation, and determining the amount of the pension. I explain that plans may legally count service differently for each of these things, and that most plans do. A recent case illustrates the point and participants’ confusion. Miller v. Ret. Program Plan, No. 18-6314 (Aug. 22, 2019). Consolidated Nuclear Security LLC (CNS) sponsored a retirement plan for its employees (the Plan)….

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The Secure Act- What Would It Mean To Retirement?

The Secure Act- What Would It Mean To Retirement?

The House of Representatives passed the Setting Every Community Up for Retirement Enhancement Act of 2019 (the “SECURE Act”). The SECURE Act is now in the hands of the Senate. If the Senate and President approve, the following are some of the key provisions that could impact individuals and businesses when it comes to retirement planning: · After the death of a participant in a retirement plan or owner of an IRA (or Roth IRA), distributions of the entire account…

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It’s Not Always True That You Must Start Taking Pension Distributions By April 1 of the Year Following the Year You Turn Age 70½

It’s Not Always True That You Must Start Taking Pension Distributions By April 1 of the Year Following the Year You Turn Age 70½

Under the Internal Revenue Code (IRC), participants in tax-qualified pension plans [most pension plans ARE tax qualified] MUST start taking “required minimum distributions” (RMDs) of their pension by April 1 of the year following the year they turn age 70½. This is referred to as the “required beginning date” (RBD), and it is very important because the penalty for failing to take an RMD by the deadline is an onerous 50% tax penalty. Ditto if you fail to take your…

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What Is the Better Strategy For Achieving Retirement Security? Working Longer? Or Saving More?

What Is the Better Strategy For Achieving Retirement Security? Working Longer? Or Saving More?

The National Bureau of Economic Research recently published a working paper that purports to answer this question. [See “The Power of Working Longer,” by Gila Bronshtein, Jason Scott, John B. Shoven, and Sita N. Slavov]. With exhausting technical analysis, the authors demonstrate that working longer is a much more powerful strategy for achieving retirement security than saving more. For example, the authors show that delaying retirement by just one year results in an 8% increase in the standard of living,…

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Does It Make Sense to Delay Collecting Social Security Retirement Benefits in Order to Receive a Higher Monthly Benefit?

Does It Make Sense to Delay Collecting Social Security Retirement Benefits in Order to Receive a Higher Monthly Benefit?

Callers sometimes ask me this question, and I tell them the answer depends on a number of factors unique to them. But, here are a few things to consider. First, if you qualify for Social Security retirement benefits (SS benefits), you may choose to start receiving them between age 62 and age 70. However, if you start your SS benefits before your full retirement age (FRA), they will be reduced; if you wait until age 70, they will be increased….

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Latest Social Security Trust Fund Report Is Not Good News for Retirees

Latest Social Security Trust Fund Report Is Not Good News for Retirees

Each year, Social Security’s trustees report on the current and projected financial status of the Social Security trust fund. Their 2018 annual report is worrisome. In a nutshell, the trustees conclude that the Social Security trust fund faces insolvency and resultant benefit cuts by 2034 if changes are not soon made to the program. BackgroundSocial Security actually has two trust funds: the Old-Age and Survivors Insurance (OASI) Trust Fund, which pays retirement benefits and survivors benefits; and the Disability Insurance…

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One More Thing to Worry About in Retirement: the Solvency of Medicare’s Hospital Insurance Trust Fund [Medicare Part A]

One More Thing to Worry About in Retirement: the Solvency of Medicare’s Hospital Insurance Trust Fund [Medicare Part A]

On June 5, 2018, Medicare’s Board of Trustees issued its annual report on the state of its two trust funds: the Hospital Insurance Trust Fund (Hospital Fund) and the Supplementary Medical Insurance Trust Fund (Supplementary Fund). The Hospital Fund, known as Medicare Part A, helps pay for hospital stays, home health services following a hospital stay, care in a skilled nursing facility, and hospice care the aged and disabled. The Hospital Fund is financed by taxes on workers’ earnings. Thus,…

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