Category - Retirement

1
Losing Faith?
2
Examine Your Retirement Plan’s Stable Value Fund Closely
3
Social Security “Free Loan” Loophole Redux
4
2009 Retirement Plan Contribution Limits
5
More Social Security Back Doors

Losing Faith?

According to a study conducted by the Employee Benefit Research Institute and published by the Wall Street Journal, workers’ and retirees’ confidence about their retirement security has deteriorated sharply during the past two years. The survey of 1,257 Americans found that the percentage of workers who are very confident about having enough money to retire comfortably has dropped to 13% this year, a record low. That is down from 18% in 2008, and a record high of 27% in 2007.

According to Jack VanDerhei, a survey co-author, retirees are waking up to what amounts to “a huge gap between what …

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Examine Your Retirement Plan’s Stable Value Fund Closely

retirement funds over timeMany employer-sponsored tax-deferred retirement plans, including 401(k)s, offer a unique investment option called a “stable value” fund. If you’ve invested in such a fund, you should take a close look at what’s inside – its value might not be as stable as you think.

For years, I’ve had some of the money in a 401(k) plan with my former employer invested in something called the “fixed income fund.” The fund documents describe it as a conservative cash-like investment with a $1.00/share price.  Over the years, the fund has always yielded more than a money market fund; its current yield is …

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Social Security “Free Loan” Loophole Redux

Researchers over at Boston College’s Center for Retirement Research have analyzed the “interest-free loan” opportunity presented by the loophole in Social Security that I’ve discussed before. Once their findings reach Congress, I’m betting this loophole gets closed.

Alicia Munnell and her colleagues at the Center recently published a short note in which they examine the potential impact of the loophole.  The idea is this: normally, once you retire, your Social Security retirement benefit level is locked in – other than adjustments for inflation, it can’t go higher.  The older you are when you start taking Social Security, the bigger your …

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2009 Retirement Plan Contribution Limits

The IRS has announced the cost of living adjustments applicable to dollar limitations for 401(k), profit sharing, IRAs, and other retirement plans in 2009. The new limits are as follows:

  • 401(k) limit will increase from $15,500 to $16,500.
  • 401(k) “catch-up” limit for individuals age 50 and over will increase from $5,000 to $5,500.
  • Defined contribution plan limit will increase from $46,000 to $49,000.
  • Defined benefit and cash balance plan annual benefit limit will increase from $185,000 to $195,000.
  • Contribution limit for benefit and contribution calculation will increase from $230,000 to $245,000.
  • Highly compensated employee definition will increase from $150,000 to
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More Social Security Back Doors

I previously discussed a loophole in the Social Security law that allows current retirees to pay back the benefits they’ve received (without interest) and restart the Social Security clock at a higher benefit level. Recently, I discovered two additional unusual Social Security strategies.

Boston College maintains a Center for Retirement Research that publishes all sorts of interesting working papers and studies about retirement.  Recently, the center published a short worksheet discussing three Social Security strategies that it dubbed “Strange, but True.”

The first item is the scheme that I discussed back in May; it arises from a loophole that …

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