Are Social Security benefits adjusted for inflation?

July 7, 2024 No Comments

A: Social Security benefits are adjusted for inflation. This adjustment is known as the cost of living adjustment (COLA). For the program’s initial nearly four decades, benefit amounts did not increase based on higher living costs. The inflation of the 1970s, which was particularly hard

Are Social Security benefits taxable after age 62?

July 7, 2024 No Comments

A: Eligibility to collect Social Security benefits begins at age 62. Many seniors, to collect larger benefit amounts, wait until a later age. Whether Social Security benefits are taxable by the Internal Revenue Service (IRS) depends on how much additional income the person filing taxes

Are Social Security payments included in the US GDP calculation?

July 7, 2024 No Comments

A: Social Security payments are not included in the U.S. definition of the gross domestic product (GDP). Transfer Payments For the purposes of calculating GDP, government spending does not include transfer payments – the reallocation of money from one party to another – which includes

401(k) and IRA contribution

July 7, 2024 No Comments

A: If you contribute to your 401(k) account, you may still contribute to a Roth IRA and/or a traditional IRA. Your 401(k) contribution has no effect on your Roth IRA contributions. You only need to make sure you meet the eligibility requirements for funding a

A lot of retirement projections seem to assume an 8% rate of return. Is this realistic?

July 7, 2024 No Comments

A: Many financial advisors would feel that an 8% rate of return is too high, and are more likely to work with 4-5% estimated return, depending on the dollar amount that is assumed will be invested.The 8% (or more) rate of return became the norm

Annuities: Present Value Versus Future Value

July 7, 2024 No Comments

A: The present value of an annuity represents the sum that must be invested now to guarantee a desired payment in the future, while the future value of an annuity is the amount to which current investments will grow over time. What Is an Annuity?

Are 401(k) withdrawals considered income?

July 7, 2024 No Comments

A: All 401(k) plan withdrawals are considered income and subject to income tax, including capital gains. When you take a premature distribution – a withdrawal before age 59½ from a 401(k), IRA or any other tax-deferred retirement account or annuity – that withdrawal is also

Are 401ks FDIC insured?

July 7, 2024 No Comments

A: The Federal Deposit Insurance Corporation (FDIC) works as a protector for customers when banks and financial institutions fail. The total limit per person is $250,000, and it is applicable to checking accounts, savings accounts and certificates of deposit (CDs). Mutual funds, stocks, bonds, annuities,

Are catch-up contributions allowed for SEP IRAs?

July 7, 2024 No Comments

A: In general, catch-up contributions are not allowed for SEP IRAs because these plans require contributions to be made by employers only. Since catch-up contributions are made by the account-owning employee, they are not permitted. However, some SEP plans may allow employees to make traditional

Are dividends the best way to make money for retirement?

July 7, 2024 No Comments

A: There are numerous theories that speak to the best method to save for retirement – a traditional asset allocation based time frame, inclusion of alternative asset classes to achieve broader reach and the consideration of dividends as a means to hedge against market risks. Here,

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