It is common when most people talking about Social Security, they are also thinking about retirement benefits (retirement planning benefit and retirement transition benefit). But about one-fifth of all the benefits of social security benefits are the surviving spouse. So, if you plan for retirement, it is important to plan for you or your spouse to social security spouse benefits at some point in their lives. Is it possible for a non working spouse who does not receive retirement income from Social Security, to collect as the income of her husband for? (more…)

In developing a retirement plan there are several factors to consider in addition to the amount you need or want to save.

1. Income Taxes.

The above discussion did not take into consideration income taxes. You might have to save more if you have to pay income taxes on all or part of your retirement benefit or your contributions. Distributions from qualified employer plans are always subject to retirement income tax. (more…)

In just a few years, the first of an estimated 77 million Baby Boomers will become eligible for benefits and will have to make that decision. A full 32 percent of the workforce has no retirement savings set aside and 80 percent have no private pension. About two thirds of retirees receive 50 percent of their income from Social Security. Today about 20 percent of Social Security recipients rely on their checks as their sole source of income. Taking the Social Security check early at age 62 versus age 65 currently costs recipients 24 percent of their monthly social security benefits and that penalty is going up to 30 percent. Unexpected taxes and additional penalties can literally take away the rest. (more…)

Once your Average In­dexed Monthly Earnings (AIME) is calculated, the Social Security Administration applies a percentage, called a Replacement Rate, to arrive at your monthly social security statement of benefits amount. The average Replacement Rate is 40 percent. However, the rate tends to be higher for low-income workers and lower for higher income workers. In this progressive way, lower-paid workers—who in theory would have less opportunity to save—get proportionally more of their incomes replaced by Social Security. (more…)

Retirement savings last longer when invested assets are withdrawn tax-efficiently. Generally, this means tapping taxable accounts or tax-exempt investments first, followed by retirement accounts made with after-tax dollars, and then accounts funded with before-tax dollars. Withdrawals from Roth IRAs contribution should be made last because they have no minimum withdrawal age and earnings grow tax-free. (more…)

During the process of divorce, two people are expected to make rational and far-reaching decisions at a time of emotional turmoil. This may also be their first experience with the court system and hiring an attorney. Expenses often increase when one spouse moves out and sets up a separate household. Couples must estimate the dollar value of their household property and divide their debts. (more…)

No one likes to think about getting a divorce, but unfortunately, half of those marrying today will end up divorced. (I’ve often wondered if that statistic took into account Zsa Zsa Gabor, Liza Minnelli, and Elizabeth Taylor, but that’s another story.) In a divorce, particularly with relationships that have lasted over 10 years, spouses may be entitled to Social Security benefits and pension benefits. (more…)

Periodic additions to income payments that enable recipients to purchase the same amount and quality of goods and services over time despite inflation. As experienced by older Americans, Cost of Living Adjustments are annual increases to Social Security benefits and other income payments that reflect the previous year’s inflation rate in urban areas. Although a common perception is that older persons dependent on Social Security are protected from losing purchasing power, in actuality, after a few years they often cannot maintain the level of retirement standard of living they had upon retirement and experience increases in their cost of living greater than increases in their retirement income. (more…)

As the nations of the world address the challenges of population aging, two key issues of concern are whether a sufficient number of appropriately skilled workers will be available to maintain economic productivity and whether the existing retirement pension programs will be able to maintain the growing number of retirees. A multidisciplinary literature addresses various dimensions of these joined issues, including studies of the trends in employment rates among persons 55 years and older, the relationship between aging and changes in physical and mental capacity, the influence of current policies on the availability and utilization of older workers, and how new workplace programs and government policies may lead to improved opportunities for jobs for older workers. The policies proposed in response to these concerns differ in their targets for change and in their tone. (more…)

As I said earlier, the amount you receive from Social Security varies based on how much you put into the system and when you start taking social security benefits. You have limited control over what you put into the system because it’s dictated by the FICA taxes that serve to allocate a portion of your earnings into the system. You do, however, have control over when you and your spouse take money retirement from the system. (more…)