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Feb 16, 2012

Lack of financial literacy can hurt retirement

By Mark Miller

(Reuters) – Okay, folks — it’s time for a Personal Finance 101 quiz. Please answer the following three questions:

1. Suppose you had $100 in a savings account and the interest rate was 2 percent per year. After five years, how much do you think you would have in the account if you left the money to grow (more, less or the same)?

Feb 14, 2012

‘Stretch’ IRA tax shelter on the chopping block

Feb 14 (Reuters) – Inherited retirement accounts are
truly one of those gifts that keep on giving because heirs can
benefit for many years without much tax burden, but Congress is
starting to talk about curtailing breaks on the accounts.

A revenue-raising proposal floated in the Senate Finance
Committee last week would sharply limit the time allowed for the
liquidation of inherited Individual Retirement Accounts (IRAs)
and 401(k)s. Currently, heirs can choose between taking a lump
sum distribution, or stretching out distributions over many
years. Heirs who do take the longer-range distributions from
these so-called “stretch IRAs” can, in turn, pass on the
accounts to their own beneficiaries, allowing the assets to
yield tax-sheltered returns for decades.

Feb 10, 2012

Same-sex couples will save if DOMA is struck down

By Mark Miller

(Reuters) – This week’s federal appeals court decision throwing out California’s Proposition 8 adds considerable weight to the argument that the federal Defense of Marriage Act violates the U.S. Constitution.

While DOMA’s legal fate is far from sealed, this much is clear: the law results in differential treatment of same-sex married couples under federal law in hundreds of ways that impact their pocketbooks — 1,138, to be exact. That’s the tally the U.S. General Accounting Office (GAO) came up with in 2004 when it counted up all the ways that marital status is a factor in determining or receiving benefits, rights, and privileges under federal law.

Feb 8, 2012

American Airlines pension default Q&A

NEW YORK (Reuters) – American Airlines is heading toward the largest default of a defined-benefit pension plan in U.S. history.

It’s a messy story involving 130,000 covered workers, four underfunded pension plans, bankruptcy court proceedings and negotiations with unions and a government agency.

Feb 8, 2012

COLUMN: American Airlines pension default Q&A

NEW YORK, Feb 3 (Reuters) – American Airlines is
heading toward the largest default of a defined-benefit pension
plan in U.S. history.

It’s a messy story involving 130,000 covered workers, four
underfunded pension plans, bankruptcy court proceedings and
negotiations with unions and a government agency.

Feb 2, 2012

What Obama should be saying about Social Security

By Mark Miller

(Reuters) – The remaining major Republican presidential contenders managed to escape their debate prior to yesterday’s Florida primary without being asked to answer a single question about Social Security. That’s remarkable, considering the state’s aging population and the outlandish statements the candidates have made about the program.

But they aren’t the only ones getting a pass on the subject. President Obama mentioned Social Security briefly during his State of the Union address last week, but his comments raised more questions than they answered.

Jan 27, 2012

Low-cost entries shake up small retirement plan market

By Mark Miller

(Reuters) – If you own a small business, the time to comparison-shop for 401k plans has never been better. Low-cost plans are cropping up, as new federal regulations kicking in this year call for greater disclosure of fee information to plan participants and sponsors.

The numbers should be a real eye-opener. Fees vary widely among retirement plans — anywhere from well below 1 percentage point to a whopping 5 percent. Yet 71 percent of retirement savers don’t think they pay any investment fees at all, according to a recent AARP survey.

Jan 25, 2012

COLUMN: Workers fight switch to church pension plans

By Mark Miller

(Reuters) – Mary Rich worked for a hospital in northern New Jersey for 25 years, first as a registered nurse and later as an executive. One of the job’s benefits was a traditional pension that she expected to receive at retirement.

Now that benefit seems unlikely to be around by the time she retires.

Rich’s financially troubled former employer, the Hospital Center at Orange (HCO), shut down in 2004. The pension plan currently has $5.25 million in assets, which are being distributed at the rate of $2.7 million per year. By the time Rich reaches retirement 12 years from now, the money will be gone.

Jan 20, 2012

Big penalties await those who delay Medicare filing

By Mark Miller

(Reuters) – Most seniors on Medicare will pay $99.90 per month this year for Part B outpatient coverage. But how would you like to pay 10 percent more for that coverage, or 50 percent more?

Failing to sign up for Medicare at the right time can cost you – big time. The monthly Part B premium jumps 10 percent for each full 12-month period that a senior could have had coverage but didn’t sign up. A mistake can be costly; someone who fails to enroll for five years would face a 50 percent Part B penalty – 10 percent for each year of delay. That penalty is permanent, and can translate into thousands of dollars in unnecessary lifetime penalty expenses; a headache no one needs on top of already soaring healthcare costs.

Jan 18, 2012

To maximize retirement benefits, know the rules

NEW YORK (Reuters) – When the oldest baby boomers start turning 66 this year, they’ll be eligible to file for full Social Security benefits. But pollsters say many Americans plan to work well past that age, reflecting tough economic times and a general desire to reshape the idea of retirement.

What will working longer mean for the Social Security benefits of these seniors? How about Medicare, which has filing rules that are closely linked to those of Social Security and employment status?

    • About Mark

      "Mark Miller is a journalist and author who writes about trends in retirement and aging. He has a special focus on how the baby boomer generation is revising its approach to careers, money and lifestyle after age 50. Mark is the author of The Hard Times Guide to Retirement Security: Practical Strategies for Money, Work and Living (John Wiley & Sons/Bloomberg Press, 2010) and edits Mark is the former editor of Crain’s Chicago Business, and former Sunday editor of the Chicago Sun-Times. The opinions expressed here are his own."
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