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☆ To shore up Social Security, this controversial proposal calls for limiting retirement plan tax perks
▼ + stars: | 2024-02-09 | by ( Lorie Konish | ) www.cnbc.com time to read: +4 min

But a new research proposal published by the Center for Retirement Research at Boston College by experts at the opposite ends of the political spectrum has sparked considerable opposition. Together, they call for limiting current tax preferences for retirement savings plans, and instead redirecting those funds to help shore up Social Security. How retirement plan tax incentives workIn 2024, the limit for total employee and employer contributions to a defined contribution plans such as 401(k)s is $69,000 in 2024. By rolling back the tax incentives provided through defined contribution retirement plans, the money saved could be used to help fix a portion of Social Security's funding gap, the researchers argue. "We now have an industry and a policy based on 401(k)s and defined contribution plans that has been, relatively speaking, successful," Fichtner said.

Persons: Andrew Biggs, Alicia Munnell, Biggs, Munnell, Michael Wicklein, Jason Fichtner, Fichtner Organizations: Istock, Getty, Center for Retirement Research, Boston College, American Enterprise Institute, Federal Reserve Bank of Boston, Social Security, U.S, Mercatus, George Mason University, Cato Institute, National Association of Plan, Center, Board

☆ NextEra workers roll the dice with big bet on company stock
▼ + stars: | 2023-09-21 | by ( Tim Mclaughlin | ) www.reuters.com time to read: +8 min

America’s largest renewable power company is among several U.S. energy and utility companies, including Exxon and Southern Company, that continue to promote big, concentrated bets on company stock in worker retirement plans. Nearly 50% of the investments in NextEra’s employee-funded 401(k) retirement plan are in company stock, the highest among all 30 companies in the S&P 500 Utilities Sector (.SPLRCU). NextEra declined to comment on its use of company stock in employee 401(k) plans. "If we saw a concentration of more than 20% in a single company stock, we would definitely tell them it's a big risk." `Keith Rasmussen, a retired geologist, said he still feels the financial repercussions of holding big bets on company stock in his retirement plans.

Persons: Robert Knoche, Yoon, NextEra, ”, Alicia Munnell, Kristin McKenna, McKenna, Ryan Frazier, Keith Rasmussen, jolt, Rasmussen, “, ” Rasmussen, Richard Valdmanis, Anna Driver Organizations: REUTERS, Exxon, Southern Company, Corporate America, Enron, Utilities, Vanguard Group, Center for Retirement Research, Boston College, Employees, Silicon Valley Bank, Darrow Wealth Management, SEC, Corporations, U.S . Securities, Exchange Commission, Southern Co, Dominion Energy Inc, Dominion, Chesapeake Energy Corp, Thomson Locations: Douglas County , Kansas, U.S, Silicon, Boston, Atlanta , Georgia

☆ As Social Security's full retirement age moves to 67, some experts say it should not go higher
▼ + stars: | 2023-02-12 | by ( Lorie Konish | ) www.cnbc.com time to read: +3 min

Pekic | E+ | Getty ImagesMore than 1 million people recently took to the streets in France to protest an increase in the country's standard retirement age. The full retirement age for Social Security, when workers are eligible for 100% of the benefits they've earned, is transitioning to age 67. Based on their proposal, people born in 1978 or later would have a full retirement age of 70. watch nowThe Republicans also propose raising Medicare's eligibility age to coincide with the Social Security full retirement age and then indexing that age to life expectancy. "I think that's about as far as you can go," Munnell said of the age 67 full retirement age that is getting phased in now.

☆ What a record 8.7% Social Security cost-of-living adjustment could mean for taxes on benefits
▼ + stars: | 2022-10-20 | by ( Lorie Konish | ) www.cnbc.com time to read: +5 min

Halfpoint | Istock | Getty ImagesRetirees who rely on Social Security benefits for income will get some relief from record high inflation when an 8.7% cost-of-living adjustment kicks in next year. How Social Security benefits are taxedSocial Security benefits are taxed based on a formula known as "combined" or "provisional" income. That is calculated by taking your adjusted gross income and adding non-taxable interest and half of your Social Security benefits. Taxes on Social Security benefits apply to single taxpayers starting with $25,000 in combined income, and married taxpayers starting with $32,000 in combined income. watch nowFor individuals with more than $34,000 in combined income and couples with over $44,000, up to 85% of their Social Security benefits may be taxed.

☆ Fed Chair Powell warned of ‘pain’ to come. Seniors on fixed incomes are already feeling it
▼ + stars: | 2022-09-26 | by ( Martha C. White | ) edition.cnn.com time to read: +8 min

“Social Security comes up short by at least $1,000 [a month] in many locations. John Harriger, a resident of Chilhowie, Virginia, suffered a disabling back injury in 1994 and relies solely on Social Security for income. “I get about $1,800 a month [from Social Security] but… when gas and groceries started going up, I couldn’t make it any more. Sites, who relies wholly on Social Security for her income, said she worries what will happen when the mortgage on her home near Asheville, North Carolina, resets. This has a pass-through effect on the financial security of older Americans.

Saving for retirement as a couple may seem easier if both people are bringing home a paycheck. But many dual-income couples aren't taking advantage of tax-deferred retirement accounts, such as 401(k)s, according to data reported in an article on MarketWatch. Only about half of private sector workers have access to a workplace retirement plan, but experts say those who do should be maxing it out. The study looked only at married couples who save in a workplace retirement plan. Dual-income couples with one person contributing to a 401(k) are saving just 5% of their total household earnings.

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