Bipartisan retirement savings bill draws support for passage

Key provisions of the Retirement Enhancement and Savings Act of 2018 would create pooled employer plans and impact lifetime income statements

Jon VoglerTime to read: 2 min

The Retirement Enhancement and Savings Act of 2018 (RESA), a wide-ranging, bipartisan retirement savings bill that supporters hope will be approved by Congress later this year, was reintroduced in the Senate in early March. If approved, the bill could help expand access to retirement plans for employees of small businesses.

Where does RESA stand?

Continue

Have college-bound kids? It’s time for some major April decisions.

Families must decide where their seniors will go to college and what to do with their tax refunds

Time to read: 2 min

April showers don’t just bring May flowers. This month brings two major financial decisions that can impact the lives of parents and children for decades. It’s time for graduating high school seniors to select where they will be going to college, and for parents to decide what to do with their tax refunds. If your family is like mine, of course the kids come first, so let’s talk college.

Decision #1: Countdown to college  

Students spend many months

Continue

A recent audit reveals the Social Security Administration has underpaid widowed spouses

The agency failed to tell widowed spouses that they could claim survivor benefits while still delaying their own benefits until age 70

Jon VoglerTime to read: 2 min

A full 82% of widows and widowers entitled to Social Security spousal benefits are being underpaid, according to a new audit report prepared by the Office of the Inspector General (OIG) of the Social Security Administration (SSA).

It turns out that the SSA has failed to tell widowed spouses that they could claim survivor benefits while still delaying their own benefits until age 70. This is an important distinction: Retirement benefits increase by 8% per year for every year they are delayed beyond full retirement age up to age 70. Survivor benefits do not.

While it is up to eligible claimants to determine whether they want to take benefits before age 70, “SSA needs to improve controls to ensure it informs [widowed] beneficiaries of their option to delay their application for retirement benefits,” the audit found.

What the audit uncovered

Continue

How does the federal budget act affect retirement plans?

The Bipartisan Budget Act of 2018 will affect hardship distributions, multiemployer plans and income tax returns for individuals over 65

Jon VoglerTime to read: 3 min

On Feb. 9, President Donald Trump signed into law the Bipartisan Budget Act of 2018 (the BBA), a two-year budget agreement that increases federal spending and funds the government through March 23. The BBA includes several budget provisions that affect retirement plans. So what do they mean to retirement savers? Let’s explore the key provisions in greater depth.

Continue

TCJA: An unintended consequence for 401(k) hardship withdrawals?

Amendments to application of ‘safe harbor’ standards for hardship distributions are under scrutiny by retirement groups

Jon VoglerTime to read: 2 min

Sometimes when new tax laws, such as the recent Tax Cuts and Jobs Act (TCJA), are enacted, there are so many moving parts that unintended consequences may arise in practice. This seems to be the case with respect to a revision to the personal casualty loss deduction under Internal Revenue Code Section 165, which will impact 401(k) plans and 403(b) plans that follow the “safe harbor” standards for allowing participants to receive hardship distributions.

The hardship distribution safe harbor regulations include a list of events that are

Continue

Show your love with a 529 contribution

This Valentine’s Day, consider the gift of college savings for a special child in your life

Time to read: 2 min

In the beginning, Valentine’s Day was associated with romantic couples only, but in recent times the day is seen in a much larger perspective. Now, people take the opportunity to wish a happy Valentine’s Day to anyone they love, including friends and family. The idea is to celebrate love, and in that spirit, I believe the best Valentine’s Day gift for a special child in your life is a 529 contribution.

Here’s why.

Continue