...Retirement Planning and Social Security In the United States, we do not need to plan for retirement. Social Security will cover our needs when we retire. This is a common misconception among Americans simply because the Social Security program has been such a vital part of most everyone who has retired in our country for so many generations. We as Americans have grown to trust that our country is going to be not only able to give a portion back to us in our older years, but we feel it is our right as Americans to finally receive a little financial peace after a lifetime of labor and dedication. While all of these feelings are completely justified, there are a few questions we need to ask ourselves to ensure that freedom. We need to decide what exactly are our needs going to be at this point in our lives, and what we can realistically look forward to from Social Security, and finally educate ourselves on the alternatives and supplements that may be offered to us. Naturally you will want to know how long your retirement money will last you. First you must tackle an even tougher question; How long will you live? The life expectance for both men and women has increased over the past several years mostly due to such great strides in healthcare. If we only knew what to expect it would make planning much more precise. There are a few fun ways to gather an educated guess, by going to the Paul Beson Faculty Scholarships Aging Research Program you are able to fill out a life expectancy...
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...Our company is introducing a Group Registered Retirement Savings Plan (RRSP). The plan offers an attractive retirement investment options to our employees'. One of our main goals of this plan is creating a better future for our employees. We decided to offer them an RRSP which consists more benefits. Our plan includes the employee to contribute 1% to 5% of regular wages to the RRSP. The employer will match up to 3 % of the employee's contribution. Per example, if an employee decides to contribute 2%, the contributions of the employer would match the contributions of his employee on each pay period. Therefore, if an employee contributes 4% of the contributions, the employer will only contribute 3%. This contribution and investment earnings until their retirement. The investment could be ended at any age up to the end of the year where the employee turns 71....
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...Retirement Planning: Plan for the Unexpected Many adults are optimistic about retirement, but many will be unsuccessful in preserving the lifestyle and standard of living to which they have become comfortable because they will neglect to plan and save. In fact, some people do not even attempt to calculate what their needs will be when they retire. In the past, Americans could count on Social Security, Medicare, and pension plans directed by their employer to help plan their retirement; however, today it is entirely different. The future of both the Social Security program and the Medicare program are uncertain, and to compound the problem, most employers no longer offer defined benefit plans. Some employers offer contribution plans, such as 401k plans; however, that means that people need to have self-discipline and exhibit regular patterns of investing to ensure a comfortable retirement. Citizens must be active and take responsibility for their own financial security. Not only do people have to calculate how much money they will need for ordinary living expenses, but they will also have to calculate how many years they will live in retirement. In addition, they need to recognize the impact that inflation will have on spending power and determine how much money they will need to cover medical and long-term care expenses if they arise. Although the Social Security program will play an important role in retirement, Americans must create a plan that covers every cost, including...
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...Registered Retirement Savings Plan (RRSP) Submitted By: Instructor: Date: What is an RRSP? A Registered Retirement Savings Plan (RRSP) is a tax-deferred account designed specifically for retirement savings. Any resident of Canada under the age of 71 who has earned income may establish and contribute to an RRSP. (Edward Jones, 2013) RRSPs are the Canadian government's way of helping citizens save their money for retirement. Saving for 30 to 40 years of retirement may seem like a long task, but well-planned contributions and withdrawals from your RRSP can be a great way to get enough money for when you retire. Objective The objective of a RRSP is to provide individuals with an account which they may contribute Tax deferred dollars that may be used for retirement. (Edward Jones, 2013) Types of RRSP’S Here are 3 types of RRSP: * Individual – This is the most common type of RRSP. It is an RRSP that is registered in your name. All investments, contributions, and tax advantages belong to the person the account is named under. * Spousal - This is a way for spouses to split income more evenly during retirement. The combined income tax would be lower compared to paying as a single RRSP. To qualify for a spousal RRSP you must have lived with each other for at least 12 months, have a child together by birth or adoption, or share custody of the other spouses child from a previous relationship. * Group – This is offered to help employees save for retirement. This works...
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...401K “One of the first things you are likely to run into when you become an adult and begin investing is a 401K plan offered by your workplace employer. A 401 K has been giving individuals the opportunity to make far more money, or lose everything in the process. Still, you may be wondering, 'What is a 401K?" and, just as important, "How does a 401 K work?". Never fear. This overview will explain the basics to you and help you make sense of the choices you have when it comes to funding your golden years.”-WIKIPEDIA What Is a 401K? The term 401 k allows individuals to establish certain types of tax retirement accounts. There are also 2 different types of 401K accounts What’s a regular 401 K? A regular 401 K allows you to save up money toward...
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...Proposed Retirement and Communication Plan HRM/324 October 28, 2013 Sharron Fletcher Proposed Retirement and Communication Plan Offering retirement benefits to employees to provide a source of income after they retire. Employees need to invest in their own retirement while working to ensure they have enough money to cover their expenses. The benefits of participating in these plans is tax-deferred earnings, and in some cases contributions are also taxed deferred. Employees can also invest in individual retirement accounts (IRAs) to augment their companies plan or to develop their own plan. "Companies establish retirement or pension plans following one of three design configurations: a defined benefit plan, a defined contribution plan, or hybrid plans that combine features of traditional defined benefit and defined contribution plans" (Martocchio, pg 259, 2009). Once the company decides on a plan, they need to develop a communication plan to encourage employee participation for the proposed retirement plan. "Setting up an employee retirement plan can be a smart way to provide for one of your key assets - your people - as well as benefiting one's business"("Nationwide", 2013). Providing a quality retirement plan helps attract and retain employees, reduce the tax burden and allows the owner to invest in their own retirement. Employers take care of their employees through salary, health...
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...Retirement Plan and Communication Proposal Ebony Brown HRM/324 January 24, 2012 Jocelyn Freimark The design of a company’s benefits program is important to ensure the plans fit the structure of the company and the needs of its employees. Being a new company starting with 150 employees it will be important to design a varied and comprehensive retirement program that will not only address the needs of the company’s current employees, but will also attract potential employees, and be affordable for the company. Qualified plans “entitle employers and employees to substantial tax benefits” (Martocchio, 2009, p. 3), because neither has to pay taxes on contributions within a dollar limit outside of defined contribution plans. As an additional benefit, investment earnings are tax free and participants and their beneficiaries do not pay taxes on retirement benefits until the funds are received. There are two types of qualified retirement plans: defined benefit plan and defined compensation plan. A challenge of the defined benefit plan is that it may prove to be more costly for employers as employer contribution rates fluctuate yearly and requirements may be difficult for employers to ensure all the funds are available for participants or beneficiaries to receive. In this case, the best retirement benefit design option is the defined contribution plan. Under the defined contribution plans “employers and employees make annual contributions to separate...
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...The acquisition of 100% of another company has resulted in research pertaining to pension plans and segments. Such research has focused on the reporting of defined contribution and benefit plans, and other post-retirement plans offered by the acquired company. In addition, research pertaining to eliminating two segments has been analyzed. Research that adheres to both the Financial Accounting Standards Board (FASB) and the generally accepted accounting principles (GAAP) guidelines has been assessed. As a result, recording guidelines for pension plans, and the process of eliminating segments within accounting, have been provided for further consideration by the company. Defined Contributions Plans Defined contributions plans require the company to allocate funds to employee retirement plans. The contribution amount for each employee who partakes in this type of retirement plan is dependent on the plan requirements; however, “after a minimum vesting period, the funds become the property of the employee for their benefit once they enter retirement” (Walther, 2010, p. 162). The ASC 715-70-20 (IAS 19) recognize this type of plan as means for a company to provide benefits to an employee and the inclusion of the defined contribution plan within the company financial statements is relatively simple (FASB, 2009). The company contribution is recorded as a pension expense within the company income statement. The pension expense, once calculated, is a fixed figure, which is determined...
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...Retirement Plan Proposal and Communication Plan Debra Britton HRM/324 July 27, 2015 Douglas Lalama Retirement Plan Proposal and Communication Plan Now more than ever it is important that organizations offer some sort of retirement plan to its employees. The Social Security Administration reports that by the year 2033, Social Security funding will be depleted. Now is a good time to get younger employees thinking about the future and older employees to contribute to their not so distant retirement. Supporting retirement plans will not only attract qualified employees, but encourage longevity with the organization. However, the retirement plan must address specific organizational needs. There are three plans that could be offered that address those needs. * Defined benefit plans are company sponsered plans, “such as pension plans, in which a retired employee receives a specific amount based on salary history and years of service, and in which the employer bears the investment risk.” (InvestorGuideStaff, 2015) This plan can also state an exact dollar amount the employee will receive each month of retirement. “ Or, more commonly, it may calculate a benefit through a plan formula that considers such factors as salary and service-for example, 1 percent of average salary for the last 5 years of employment for every year of service with the employer.” (Perez, 2015) This plan is covered by, Employee Retirement Income Security Act (ERISA) with federal insurance through the,...
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...Pensions and Retirement Pla ACC/541 May 7, 2012 Pensions and Retirement Plans Memo To: Kimberly Taylor, CEO, Kim’s Tasty Kookies From: Donna Robinson, CFO, Kim’s Tasty Kookies Date: May 7, 2012 ------------------------------------------------- Subject: Pensions and Retirement Plans Kim’s Tasty Kookies had begun operation in 1895 with Kimberly great-grand mother making her famous chocolate chips for children. Although the recipes were handed down through three generation of Taylors, Kimberly Taylor felt it was her duty to share her great-grand mother Kookies recipes with the world in 1995. Just 10 year later, the company has made it on the cover of Fortune 500 this past December. After buying out the local cookie company, Kim’s Tasty Kookies (KTK) opened new branches in England, Mexico and Canada. The acquired company included two segments with two different pension plans. This memo will discuss Defined Contribution, Defined Benefit, and Other Postretirement Plans as well as an explanation of the possible effects of eliminating the two segments. Defined Contribution Plan With a defined-contribution plan, Kim’s Tasty Kookies would agree to contribute to the pension trust an certain amount each period, based on a formula. This formula would take into consideration such factors as age, length of employee service, KTK’s profits, and compensation level (Kieso, Weygandt, & Warfield, 2007). This plan makes no projection regarding the ultimate benefits...
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...Retirement Plan Proposal and Communication Plan Lealofi Vaeao-Feagiai HRM/ 324 February 15, 2016 Greg Brainard Retirement Plan Proposal and Communication Plan Retirement planning involves financial preparation and communication development to ensure that specific requirements are fulfilled. In a Retirement Plan, money is put aside in a retirement account in the name of the employee, purposed for the future of the employee. With a good Retirement Plan, an employer can provide a wide range of benefits to a retired employee and motivate employees to experience longevity and decrease turnover rate. With certain requirement mandated by law, employers According to Martocchio (2015), “the importance of employer-provided retirement plans is evidenced by a study showing that employees with employer-provided retirement plans are more likely to have sufficient savings for a comfortable retirement than those who do not have these plans” (pg. 465). This paper will discuss a proposal describing two retirement plans, identify specific requirements of the Employee Retirement Income Security Act of 1974; and a design of a communication plan and encouraging employee participation. Retirement Plans The Retirement Plan provides an employee financial stability and assistance once they retire. Employers initiate retirement plans for employees as either Defined Benefit Plans or Defined Contribution Plans. Defined Benefit Plans will guarantee retirement benefits to an employee...
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...ACCT 530 Tax-Advantaged Retirement Plans April 30, 2014 An important part of tax planning includes planning for retirement. There are many different types of plans available, some with immediate tax benefits and others with deferred benefits. Effective retirement planning should begin as early as possible; and continue through the remaining work life expectancy. The ability to save for retirement as well as the timing and risk of investments factor into which retirement plan(s) an individual should utilize. This review will analyze various types of plans and include the prevalence of these plans, as well as the tax savings or cost to the federal government. There are several major sources of retirement income for the retired, including Social Security, employment based pensions and annuities, part-time work, and personal savings and investment. According to the Employee Benefit Research Institute, nearly 90% of all retirees receive some type of benefits from Old Age, Survivors and Disability Insurance (OASDI), or Social Security. This is the largest source of income and accounts for 40% of all income during retirement. These benefits are extremely important for the lower income population, who rely on Social Security for nearly 90% of their income. In fact, 21% of retirees rely solely on these benefits. The highest income population relies more heavily on earnings, with Social Security, pensions, and investments accounting for approximately 20% each of their remaining...
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...RETIREMENT: HOW PREPARED ARE YOU? The Actuary asks A Faculty Lecture by Arnold Ouendo Department of Mathematics & Statistics University of Cape Coast OUTLINE • WHAT IS RETIREMENT? • THE FIVE PILLARS OF RETIREMENT SECURITY • REASONS TO PLAN FOR RETIREMENT • HOW TO PLAN FOR RETIREMENT • POST-RETIREMENT RISKS • SUMMARY • CONCLUSIONS WHAT IS RETIREMENT? • As we grow old, we work less, produce less, and earn less; • We need to secure sources of income other than wages to support ourselves; • Used to contrast a period of gainful employment with a period when an adult is no longer gainfully employed; WHAT IS RETIREMENT? • People often work continuously up to 40 years prior to retiring; • Upon retirement, the retiree relies on the public or private retirement system and/or personal savings for income; • Some workers are beginning to look for opportunities to gradually ease into retirement – often called “phased retirement” THE FIVE PILLARS OF RETIREMENT SECURITY • • • • Social security (SSNIT in Ghana) Employer-sponsor retirement plan Personal savings Earnings from employment after retirement • Income from family members, life insurance, health insurance, and general insurance. REASONS TO PLAN FOR RETIREMENT • Break down of the informal systems – Changes in the family structure – Urbanization, mobility, war, famine, and aids – Family attitudes HOW TO PLAN FOR RETIREMENT TOP 9 WAYS TO BEAT THE CLOCK AND PREPARE FOR RETIREMENT HOW TO PLAN FOR RETIREMENT • Know your retirement...
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...Renee Kelly Week 3 Assignment OUTLINE Topic: “In the United States, we do not need to plan for retirement. Social Security will cover our needs when we are retired.” Thesis: Retirement is a time to break away from a hectic schedule and enjoy life. Retirement also can be a time of change and unexpected challenges. Planning for retirement with a solid financial investment is the key to providing financial security for life’s “golden years.” Relying solely on Social Security benefits to fund your retirement will place your financial security at risk. Organization: Order of importance. Purpose and audience: To show a solid financial plan for retirement is possible at any age, and the importance of not relying on Social Security as a sole means of taking care of day-to-day expenses. This essay is intended for an audience interested in learning how to make wise choices for their retirement, especially those who are planning to rely on Social Security benefits only. I. Relying solely on Social Security to fund for retirement may be a recipe for financial failure. A. Current research states the Social Security fund may be depleted of funds by the time most people are ready to retire in the next ten (10) years. B. Provide government statistics indicating current rate of payouts as opposed to program’s available funds. C. Current economic research showing of increasing...
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...about how America is in a retirement crisis, and half of Americans do not have enough money to save for retirement, also one third of people have almost no retirement savings at all. People who are in late adulthood are finding themselves having to work longer than they had originally anticipated, due to the fact that they did not have a retirement account set up or because they had not put enough money into their retirement account while they were working. Also, another problem that is faced with living on a retirement plan is that, your retirement is a set income; the money that you get...
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