Retirement
The most frequently asked tax questions related to Retirement
What is a 401(K) plan ?
Asked Wednesday, October 04, 2000 by an anonymous userCPA Answer:
401(K) plans are designed to encourage long term retirement savings by employees. In some plans, the employer may contribute a matching percentage to the employee's contribution amount. 401(K) plans must meet a variety of IRS rules. Speak to your local CPA about setting up a 401(K) plan for your company.
Social Security - Early Receipt Choice
Asked Sunday, October 01, 2000 by an anonymous userCPA Answer:
You will take a permanent monthly reduction in benefits if you begin collecting Social Security before full retirement (ages 62-67 depending on your date of birth).
You can go to the SSA website and read the "Retirement Information For Medicare Beneficiaries" fact sheet, or use the SSA Retirement Estimator to see how different retirement dates will affect your benefit amount and also find other information you can use to help you decide when to start your benefits in the "Near Retirement" section of the Retirement Planner.
The SSA website is http://www.ssa.gov
You can go to the SSA website and read the "Retirement Information For Medicare Beneficiaries" fact sheet, or use the SSA Retirement Estimator to see how different retirement dates will affect your benefit amount and also find other information you can use to help you decide when to start your benefits in the "Near Retirement" section of the Retirement Planner.
The SSA website is http://www.ssa.gov
Social Security - Switching
Asked Sunday, October 01, 2000 by an anonymous userCPA Answer:
You can collect reduced benefits based upon your spouse's earnings record today and switch them to your work record when you reach full retirement age. This could increase your monthly check, but it may not. The benefits you receive depends upon your work history.
Is a 457 withdrawal prior to turning age 59 1/2 subject to the 10% early withdrawal penalty ?
Asked Sunday, September 24, 2000 by an anonymous userCPA Answer:
Regardless of your age, you are not subject to the 10% early withdrawal penalty on 457 plan contributions and earnings. However, the penalty may apply to non-457 plan assets that are rolled into your 457 plan and subsequently withdrawn prior to age 59½.
What is a 457 Plan?
Asked Sunday, September 24, 2000 by an anonymous userCPA Answer:
A 457 Plan is a nonqualified salary reduction retirement plan that is available to government workers, including municipalities. There is no tax on the money you save through this plan or on what it earns until you take the money out. The catch is you can't take any money until you leave your job.
Are my estate planning fees deductible?
Asked Saturday, September 23, 2000 by an anonymous userCPA Answer:
Yes. Services for tax advice and/or income producing property are fully deductible as an itemized deduction, subject to the 2% limitation. If tax and non-tax items are discussed with your CPA or lawyer, try to get an itemized bill segregating the tax and non-taxable components.
I'm over 71 years old and still work. Can I contribute to a Roth IRA ?
Asked Saturday, September 09, 2000 by an anonymous userCPA Answer:
Yes. Roth IRA contributions can be made at any age providing you have earned income. However, they are subject to various income limitations.
Social Security - Earliest age to collect
Asked Thursday, September 07, 2000 by an anonymous userCPA Answer:
You can begin to collect Social Security when you reach age 62, providing you qualify. The amount you collect will be at a reduced rate compared to what you would have collected if you waited to the full retirement age of 65 through 67 depending on your date of birth.
Social Security - Survivor Information
Asked Thursday, September 07, 2000 by an anonymous userCPA Answer:
When a person dies, certain members of a family may be eligible for benefits.
Your spouse, age 60 or older(50 or older if disabled, or any age if caring for your children under age 16) qualifies for benefits.
Also your children (if unmarried and under age 18, still in school and under age 19, or adult children disabled before age 22) qualify for Social Security benefits if you were to die.
Your spouse, age 60 or older(50 or older if disabled, or any age if caring for your children under age 16) qualifies for benefits.
Also your children (if unmarried and under age 18, still in school and under age 19, or adult children disabled before age 22) qualify for Social Security benefits if you were to die.