Retirement

A&A

New booklet helps small biz understand automatic 401(k) enrollment

The U.S. Department of Labor and the Internal Revenue Service have released a new publication to help small employers understand automatic enrollment for 401(k) plans offered to their employees. Automatic Enrollment 401(k) Plans for Small Businesses provides a comprehensive overview of the advantages of starting and operating this type of 401(k) arrangement.
Tax

Humbug! IRS tells senior citizens to end year with retirement withdrawal

The Internal Revenue Service has adopted a Scrooge-like attitude for the holiday season, deciding not to give a break to retirees who must withdraw funds from tax-deferred accounts. No relief will be granted to Americans ages 70 1/2 and older who are required to make minimum withdrawals from their retirement plans. The IRS said administrative changes for 2008 would be confusing and complicated for both individual taxpayers and retirement plan sponsors, Forbes.com reported.
Tax

Don't rush on mandatory withdrawals from retirement accounts

Some relief might be on the way for senior citizens required to take minimum withdrawals from their individual retirement accounts at a time when the stock market has blown a hole in their financial portfolios.The Wall Street Journal is reporting that government officials are considering possible changes to the rules that require millions of Americans to start minimum withdrawals at age 70 1/2. Possible options include delaying the withdrawals or reducing the amount of the withdrawals.
A&A

SMBs losing confidence in Social Security, seek more control of retirement plans

When it comes to Social Security, two-thirds of small business owners in this country want the opportunity to manage their own accounts, according to a new survey conducted by Harris Interactive and commissioned by ING DIRECT's ShareBuilder 401k.The new survey, completed by more than 500 small business owners across the U.S., reveals that: 
A&A

So, as a retirement plan sponsor what can you do?

With financial markets seemingly out of control, what can you do to take care of your retirement plan? Review this list to ensure you are maximizing your retirement opportunities.  

Council urges Congress to consider 10-point plan to address retirement challenges

"The current economic turmoil has placed a strain on the employer-sponsored retirement system," said American Benefits Council President James A. Klein at a briefing for the news media this week.
Tax

IRS announces pension plan limitations for 2009

The Internal Revenue Service today announced cost-of-living adjustments applicable to dollar limitations for pension plans and other items for tax year 2009. Section 415 of the Internal Revenue Code provides for dollar limitations on benefits and contributions under qualified retirement plans. It also requires that the Commissioner annually adjust these limits for cost‑of‑living increases.Many of the pension plan limitations will change for 2009 because the increase in the cost-of-living index met the statutory thresholds that trigger their adjustment.
A&A

Solo 401(k) plans - great benefit for the sole proprietor

Solo-401(k) plans, designed for the sole proprietor, the proprietor's spouse, and partnerships whose only employees are self-employed partners and their spouses, are now permitted to offer participants flexible savings accounts with an after-tax Roth option as well as the traditional pre-tax option. Individuals in the plans may direct their savings to both accounts. But only a few of the major investment firms have begun to offer the Roth option.
Tax

IRS revises program for voluntary retirement plan corrections

The Internal Revenue Service has issued updated guidance on the voluntary correction program for employee retirement plans – the Employee Plans Compliance Resolution System (EPCRS)."Employers and plan administrators want to comply with the tax laws and regulations to protect plan participants," said Michael Julianelle, director of the IRS's Employee Plans division. "EPCRS helps employers and plan administrators take a proactive role in identifying and fixing mistakes.

Boomers not following parental examples regarding retirement planning

Some lessons are never learned. This is the key finding of a new study by NAVA, the Association for Insured Retirement Solutions. The "Generational Differences in Retirement Planning (GDRP): Adult Children of Retired Parents" study revealed that baby boomers are failing to follow the tried-and-true retirement planning disciplines that enabled their parents to achieve a satisfying retirement.

New report outlines retirement risks and identifies solutions

From the high price of milk and eggs to the unprecedented cost of gas, inflation is affecting every American. Among the largest groups affected are the 78 million baby boomers inching ever closer to retirement and current retirees who are experiencing soaring costs in a volatile economy.In fact, according to the Risks and Process of Retirement Survey Report, a new study from the Society of Actuaries (SOA), inflation is the top retirement concern.

Retirement income outlook bleak for single women

Women are at a much higher risk than men of facing economic uncertainty in retirement and, on average, they'll enter retirement with considerably less savings than men. Women face these unique challenges because they spend fewer years in the workforce, earn less income, and have longer life spans than men, according to a report released today entitled, The Female Factor 2008: Why Women are at Greater Financial Risk in Retirement. Multiple factors combine to cloud women's retirement security, including less time in the workforce and lower lifetime earnings then men.

Health insurance keeping potential retirees on the payroll

Older workers without other health care insurance options are more likely to defer retirement to stay covered under their employer's plan, according to an analysis by Watson Wyatt Worldwide, a global consulting firm. Other factors, such as whether an employee has a pension, also contribute to decisions on when to retire.

Supreme Court won't hear case that would have required higher retiree benefits

The U.S. Supreme Court has declined to review a decision made by the U.S. Court of Appeals in Philadelphia in AARP vs. EEOC that the Equal Employment Opportunity Commission's (EEOC) rule permitting employers to coordinate their health benefits for retirees with Medicare was "legal and reasonable." The Appeals Court said that "over time, it will likely benefit all retirees," the LA Times reports.

Gender gap widens on outlook for retirement security

While half of Americans don't think it's possible for a middle income family to retire, the gap between men and women's sentiments on the subject continues to widen, according to a new survey by Country Financial.

Health care costs daunting for new retirees

With the oldest baby boomers turning 62 – that magic age when they can start collecting Social Security checks – the call to retire grows stronger.A new study suggests they might want to ignore that voice in their heads. For one thing, Social Security checks are at least 25 percent smaller than if recipients wait until full retirement age to start collecting. And Fidelity Investments estimates that it would cost $225,000 to cover medical costs through retirement for a couple, aged 65, who retires this year.

ASPPA opposes Connecticut 401(k) legislation

The American Society of Pension Professionals & Actuaries (ASPPA) opposes legislation in Connecticut that would create a state 401(k) plan for small businesses. Michael E. Callahan, a past ASPPA president and founder of Pentec, one of the largest pension firms in the state, said legislators should not kill a robust 401(k) system in Connecticut by creating an expensive state bureaucracy. "A free and competitive market is the best system for 401(k) plans in Connecticut or any other state," Callahan said.

Court rules 401(k) participants may sue plan administrators

In a unanimous decision the U.S. Supreme Court ruled in February that individual participants of defined contribution pension plans such as 401(k) plans are protected under section 502(a)(2) of the Employee Retirement Income Security Act (ERISA) and may sue for losses resulting from a breach of fiduciary duties.

Companies not prepared to meet health, wealth needs of Baby Boomers

Throw conventional wisdom and industry fault lines out the window. Financial services firms, insurers, and healthcare payers admit they will need to add new capabilities as they prepare to serve baby boomers, who will control some $40 trillion in retirement assets by 2020.Boomers, who make up the wealthiest generation in history, face tremendous uncertainties about how they will fund their retirement, and how wealthy they will be during those years.
Tax

State tax comparison seen as key factor in choosing a retirement destination

With tax season rapidly approaching, many people planning their retirement are wondering how their retirement income will be taxed if they move. Also, what other taxes will they have to confront in their new location.Depending on where you choose to live, your tax bill may affect your ability to enjoy the lifestyle you are seeking. Some states are more tax-friendly to retirees than others.Helping to sort all this out is a Web site run by the Retirement Living Information Center.

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