Have you ever heard someone make the statement, “Social Security won’t even be around for you.”? As a network markeer, I often hear this statement used in business building, as what I call “the Social Security Myth.” The Social Secuirty Myth is meant to scare you into “realizing” the bleakness of your projected retirement financial. Many of the things about your situation may, in fact, be bleak or close to it, and many of the sobering facts you are forced to realize about your financial situation may be true, but the statements about Social Security are not. Here’s why.

According to the 2006 Social Security Administration’s Trustee Report, with no changes to the program, Social Security will be able to pay 100% of benefits until 2040. At that point, the revenues collected would still allow for benefits to be paid at a rate of 74%, again with no changes to the program. Further, the program would additionally be able to afford payment of 70% of benefits through 2080. In reality, the picture is not quite as bleak as is often painted. (more…)

Social Security is a benefit program sponsored by the federal government in the US which provides a number of benefits for the older adults.

According to recent surveys, more than 3 million retirees and aged Americans are opting for Social Security benefits. Additionally you can as well supplement the benefits with other retirement plans like stock investments, annuities, IRAs, real estate investments, 401k plans and so on. This will add to your savings and make you more financially dependent. In most cases, the benefits comprise pensions, retirement incomes, benefits for the disabled and so on. (more…)

Regardless of where you turn there is a tax – income, sales, property, gas, estate, gift, liquor, tobacco, telephone, import, export, capital gains, unemployment, Social Security, Medicare and several hundred more that you pay knowingly and unknowingly. The National Bureau of Economic Research has estimated that the average worker is in the 40% marginal tax bracket. It has gotten so bad that not only must you pay a S.S. tax while working but you’ll most likely pay income taxes on the SS benefits you receive. In fact, about the only tax that has been abolished in a retiree’s lifetime is the “poll tax” – you are no longer taxed for voting. It seems that new taxes are being invented at an alarming rate. Politicians are fond of taxing corporations because they don’t vote. Generally “tax-the-corporation is acceptable to citizens” because most think corporations actually pay taxes. Corporations do not pay taxes – they simply pass them forward to customers in the form of higher prices and lower wages/benefits.

Currently the economic and financial situation is in awful shape; as mentioned in this retirement blog. Elected officials, and the regulators that they have appointed to run our country’s institutions, have grossly mismanaged our economy to the brink of absolute failure. Our government has taxed us to the hilt to support entitlement programs promises they can no longer deliver. To compound the problems they have foolishly gotten involved in war after war by rationalizing that our “national interest is in jeopardy”. Certain businesses have enjoyed favorable tax treatment and/or allowed to operate with little regulation to the detriment of the general population. Our financial institutions have been encouraged to promote spendthrift ways to foster consumption today and pay tomorrow. In recent years the nation’s saving rate has plummeted into minus territory as we’ve borrowed against the equity in our homes to take vacations, buy bigger cars, update wardrobes and buy second homes for relaxing from the stress-filled environment of a helter-skelter life of making more money to spend. The government solution to all these excesses is, you guessed it, spend our way to prosperity. This will lead to the cruelest tax of all, the silent killer that affects those least able to afford it and the one tax that few of use call a tax: inflation. (more…)

Certain ages are critical when managing our retirement plans. Failure to plan with those ages in mind can produce lost benefits. In this article I outline those dates and explain how they affect your retirement benefits.

You’ve saved for years to accumulate benefits to use throughout your retirement years. Most likely you’ve used government-regulated plans – called qualified retirement plans, company plans, IRAs, etc. – to do so.

But these tax-advantaged retirement savings plans have rules you must follow – both for companies and individuals. These rules prescribe key ages to frustrate early use of those savings and then to force their use later in retirement. You also paid into the Social Security and Medicare programs; they also have their key ages.

Being aware of these ages and what they imply is critical to your retirement planning. Let’s explore them from the earliest to the latest:

Let me first mention that most tax-advantaged savings plans involve tax deductible contributions you make from your working income. These savings then grow tax deferred. When this money is eventually withdrawn, it’ll be taxed as ordinary income. Such plans also include company pension plans – all of which are produce taxable income at retirement.

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