Individual Retirement Account

Use Word to write your answers. Chapter 5: Planning 1. There are two basic types of retirement plans available: 1) defined benefit plans, and 2) defined contribution plans. Briefly describe the two types of plans; include at least three features of each. (Not defined in book, look elsewhere) a. Defined benefit plans: b. Defined contributions plans: 2. Most retirement plans today are of the defined contribution variety. An example is a 401(k) plan. Suppose your…

Social security should mirror those trends by allowing individuals choices and options. However, completely maintaining the status quo or going 100% private proves unrealistic and politically unfeasible. A partial privatization of social security would solve many problems and maintain the basic structure of social security. This would “allow workers to manage their own retirement funds through personal investment accounts (Zogby, Bonacci, Bruce, Daley, & Whittman, 2003, p. 3) chosen from…

specific proposals for reforming Social Security takes place. In Michael Tanner’s piece, 6.2 Percent Solution: A Plan for Reforming Social, Tanner delves into the viability of a reality of transforming the current outdated system to that of individual accounts that would give workers ownership of and control over their…

and discretionary income. For forecasts to be accurate, individuals need to precisely calculate growth of current retirement funds including Social Security, 401(k), 457, 503b, pensions, IRA’s, and annuities. In addition, it is critical that individuals understand how Social Security is awarded based on age, and penalties for early withdrawal in other retirement funds. When considering retirement, it is important to consider how long benefits are needed. According to data compiled by the…

Trust as the designated beneficiary of his retirement plan? II. SHORT ANSWER Mr. Dutton should designate his spouse as the sole beneficiary of his retirement plan because this will provide the maximum amount of income tax deferral and flexibility in distribution but lead to no additional restrictions on the use of the funds. This will also avoid the high income tax rate imposed on trust. III. STATEMENT OF FACTS Paul Dutton currently holds a 401(k) retirement plan provided by this employer,…

to protect American workers upon retirement, disability or in the event of an early death. This program is the largest government program in the world and uses a pay-as-you-go system where workers contribute 6.2% of their salaries into the plan and come time to give up work, and they will be eligible to receive a limited monthly income to assist them during retirement. In other words, the individuals working today are paying for the former workers now in retirement, hoping that others will do…

year could be put to better use. Currently, Social Security imposes a bigger burden on the American worker – jumping from low rates of taxes to up to 12% for a self-employed individual (SSA 2). This forced tax takes away choice and financial flexibility, leading to the biggest advantage of privatized Social Security and retirement: freedom of…

scenario were to happen. The worst case timing for Jack to die would be right after retirement. If he passed away before taking TRS it could be switched to his wife and she would receive the full benefit instead of only receiving 75% of his pension. We also assumed that the living expenses would be reduced to 75% of what the current…

of income for their retirement years. The current social security system is no longer a feasible approach to providing social security. Mandatory private pension systems not only offer an alternative to the failing system we are currently using, but it also offers citizens’ opportunities to make choices and have a greater control over their futures. The current social security system should be replaced by a mandatory private pension system. First, individual investment accounts…

investing in the trust funds, workers argue that they should be permitted to privately invest their money. Privatization is investing money into personal accounts, stocks or bonds. Privatization is a costly, complicated, and undependable system that won’t be efficient. The fluctuating stock market, significant cost of preserving personal accounts, and reductions in social security benefits make privatization problematical.…