23 Retirement Plan

23 Retirement Plan - Prentice-Hall, Inc. Do your research...

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Prentice-Hall, Inc. 1 Chapter 16 Retirement Planning: Finding your own pot of gold at the end of the rainbow…. . Do your research… • Best places to retire: • http://money.cnn.com/best/bpretire/ Retirement – It’s Up to YOU! • Start saving today – although retirement seems a long way away! • Employer benefits are reduced, or simply not available. • The future of government benefits, Social Security, is questionable. Retirement is like a 3-legged stool 1. Social Security 2. Employer Contributions 3. Personal Savings 3. Personal Savings Contributions The Aspects of Social Security • Mandatory federal insurance program providing retirement, disability, and survivor benefits • Paid for with a federal tax -- FICA 6.2% of your first $106,800 in 2009 pays for Social Security 1.45% of your total earnings pay for Medicare Equal match by your employer Social Security Eligibility • To qualify for full benefits you must earn ______________ credits
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Prentice-Hall, Inc. 2 • Credits are the “________________" used to find out whether you have the minimum amount of covered work to qualify for each type of Social Security benefits. If you stop working before you have enough credits to qualify for benefits, your credits will stay on your record. If you return to work later on, you can add more credits so that you can qualify. No benefits can be paid if you do not have enough credits. Social Security Eligibility • In the year 2009, you must earn ________________ in covered earnings to get one Social Security or Medicare to get one Social Security or Medicare work credit and $4,200 to get the maximum four credits for the year. Social Security Eligibility • You must be 65 years of age to receive full benefits, but will gradually increase to 67 in 2022. • Reduced benefits may begin at age __________________ Determinants of Social Security Retirement Benefits • Number of years of earnings • Average level of earnings • Inflation Age you begin receiving benefits • Age you begin receiving benefits • Replaces approximately _______________ of your lifetime average annual income, with adjustments down for higher income earners and up for lower income earners Earnings Limits on Social Security Benefits • Prior to ____________________, earning limits reduced Social Security benefits for many older workers. Senior Citizens’ Freedom to Work Act of • Senior Citizens Freedom to Work Act of 2000 eliminated the retirement earnings limit. Disability and Survivor Benefits • Disability benefits for those physically or mentally impaired – Impairment expected to result in death – Impairment prevents “substantial work” for at least 1 year • Survivor’s benefits small payment to defray funeral costs ______________ continuing monthly payments to spouse, children, or parents -- with restrictions
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This note was uploaded on 06/06/2011 for the course HACE 3200 taught by Professor B during the Spring '09 term at UGA.

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23 Retirement Plan - Prentice-Hall, Inc. Do your research...

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