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The Changing Face of Retirement
- Increased longevity and reduced morbidity
- Implications of changing demographics
- *Extended retirement period to fund
- *Health care costs
- *Long-term care
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Retirement Program Classifications: Fully taxable
- Savings
- CDs
- Investments
- Nonqualified deferred compensation
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Retirement Program Classifications: Tax favored
- IRA
- SIMPLE IRA
- SEP
- SARSEP
- 403(b) (TSA) plans
- 457 plans
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Retirement Program Classifications: Partially tax favored
- Annuities
- Life insurance
- Roth IRA
- Social Security and Medicare
- Nondeductible IRA
- After-tax qualified plan contributions
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Retirement Program Classifications: Qualified plans
- Defined benefit plans
- Defined contribution pension plans
- Defined contribution profit sharing plans
- SIMPLE 401(k)
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Groups Excluded from Social Security
- •Federal employees hired prior to 1984
- •Railroad employees covered under Railroad Retirement System
- •Business owners receiving only dividends for services performed
- •Children under age 18 employed by a parent in an unincorporated business
- •State and local government groups covered by a retirement system where employer has elected to exclude Social Security coverage
- •Employees of religious organizations opting out for religious reasons
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Income Subject to Social Security (FICA) Tax
- •Wages, salary, tips, etc.
- •Sick pay during first six months
- •Employer-paid group term life premiums up to $50,000 death benefit
- •Employee salary reduction amounts to 401(k) 403(b), 457
- •Nonqualified deferred comp deferrals when no longer subject to substantial risk of forfeiture
- •Vacation or severance pay
- •Nonqualified stock options
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Income Exempt From Social Security (FICA) Tax
- •Sick pay after first six months
- •Employer paid term life premiums over $50,000 death benefit
- •Payments from employer plan for medical or hospital expenses
- •Pretax deferrals to cafeteria plan and benefits paid from the plan
- •Employer contributions to qualified plans and benefits paid from the plan
- •Nonqualified deferred comp deferrals subject to substantial risk of forfeiture
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Key Dates in History of Social Security
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