February 2012
Retirement Articles This Week
Your Retirement Help Center!
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Questions On The 1099-R
You may have received a 1099-R in your January mail if you did a distribution from an IRA or rolled over a 401k or 403b employer plan into your IRA.
What the 1099-R tells you:
Box 1 of the form shows the total amount of your retirement fund that was distributed. The more important amount to you right now is in box 2a, the taxable amount. For direct rollovers from one qualified plan to another, that amount is generally zero.
Also check box 7, the distribution code. A letter or number should be here, explaining to the IRS exactly why your retirement money was taken out and just what was done with it. Direct rollovers to another qualified plan are coded with the letter "G." This includes transfers to another company's 401(k) plan, a tax-sheltered 403(b) annuity, a government 457(b) plan or an IRA.
Wise Owl
YTD Market Returns....Your 401k Should Be UP
Annuities May Be Coming To Your 401k
Very few 401k or 403b plans offer annuity or systematic withdrawal plans once you retire or leave the plan. The employer plans were really designed to save money-not withdraw. In many cases you'll have to roll the funds over to a IRA in order to create a regular income stream. Look for some gradual changes:
Rules proposed by the Treasury and Labor departments last week will encourage more employers to offer an annuity option in 401(k)s and other retirement plans.
American Airlines...Retirees May Get Reduced Benefits
American Airlines is misleading its employees when it said not to worry about their pensions, a federal agency said on Thursday.
The Pension Benefit Guaranty Corp. said the airline itself has estimated that 13,000 current or retired employees will have their pension cuts.
“American Airlines is telling their workers and retirees not to worry, but they should,” said J. Jioni Palmer, PBGC’s director of communications. “American said nothing’s been decided yet, but didn’t even bother to pretend that it was trying to preserve its employees’ pensions.”
Government Retirement Benefits...A Pretty Good Paycheck
About one of every 125 retired federal civilian workers collects more than $100,000 in benefits annually. They include physicians, postal workers and presidential candidate Newt Gingrich, according to data obtained by Bloomberg News under the federal Freedom of Information Act.
The list of former federal employees collecting more than six figures also includes former Vice President Dick Cheney ($125,976 for 28 years of work, including as a Wyoming congressman, White House chief of staff, and defense secretary). Cheney didn’t respond to a message requesting comment.
Gingrich, the former House speaker, receives a pension of $100,200 after 20 years in Congress, according to the data. He has argued as a Republican presidential candidate that government employees ought to shoulder more of the burden for planning their retirements. His campaign spokesman, R.C. Hammond, didn’t respond to a request for comment.
Courtesy of BusinessWeek.com
2012 Resolution...Saving More For Retirement...Check Your Tire Pressure
...A set of tires is expensive! I just bought new tires this month and realized i need to check my tire pressure more often. Apparently during the winter tires lose about 1psi for every 10-degree drop in temperature. Low tire pressure means lower fuel efficency and unsafe driving. Help your retirement nest egg this year!
401k and 403b Limits For 2012
Maximum contribution has raised from $16,500 to $17,000. If you're 50 or older remember you can add an additional $5,500. Don't forget to add money to your Roth IRA!
And, look at your employer plan and see if the Roth 401k has beed added.
Lets Start The New Year!...5 Tips For Investors Retiring In 2012
The Wall Street Journal presents 5 important tips to help with retirement this year.
1. Start keeping close track of your spending.
During the planning phase for retirement finances, much of the math was based on guesswork. Now is the time to get real.
Start by going back over the past few months of bills and expenses to get a detailed picture of your spending and expenses. Plan on keeping close tabs on a continuing basis, remembering that some spending may be seasonal—such as holiday presents or greens fees for golf.
Budgeting tools, such as Mint.com, will enable you to highlight certain spending that won't continue after retirement, such as commuting costs.
Keep in mind this will be a work in progress even once you stop working. For many people "it's going to take a year or so before you really get the hang of it, knowing what you are spending your time doing, how you are spending your money," says Jonathan Guyton of Cornerstone Wealth Advisors in Minneapolis.
2012 Priority- Review Your 401k Investment Options
When was the last time you logged into your account or studied your 401k statement? Many plans have reduced the number of investment choices and may have selected different funds for your portfolio.
Reuters reports companies are shaking up their 401(k) retirement plans, trimming lists of mutual fund offerings and shaving the fees workers pay as they prepare for new federal rules that will put more plan information in front of employees.
Last year, 63.8% of 401(k) plans changed their investment lineup; in contrast, fewer than 20% did so in 2009.
The spotlight is on plan fees, which have been the subject of numerous lawsuits in recent years, and which will have to be disclosed clearly in dollar terms to plan participants, starting May 31, 2012
