“It’s not how much you make, but how much money you keep, how hard it works for you, and how many generations you keep it for.” – Robert Kiyosaki
Retirement Income:
Market Volatility:
Costs in Retirement:
Retirement Awareness:
When you register for an Online Review or a Live Workshop, you get the opportunity to have a personal One-on-One Meeting with your Educator/Advisor to get your custom Federal Benefits Kit with a Tax-Free Evaluation including a complimentary Retirement Analyzer Plan!
For more information about your Federal Benefits & Retire-Ready Income for Life Report, Schedule an Online Review, Register for a Seminar, or Meet with your Professional Retirement Coach.
INCOME GUIDE: “WILL YOUR MONEY LAST AS LONG AS YOU DO?”
Don’t let a lack of income derail your retirement! Download this 8-page guide to see why a retirement income analysis can be the difference between enjoying retirement or white-knuckling your way through it.
The 2017 Tax Cuts & Jobs Act (TCJA) Overview
The 2017 Tax Cuts and Jobs Act marked the first major tax reform since 2001 and became effective on January 1, 2018. While changes for corporations and small businesses are, for the most part, permanent, the majority of changes for individuals will expire under a sunset provision in 2025 unless Congress takes steps to make them permanent. This chart provides a broad overview of the most significant changes that may affect you.
Under the 2017 Tax Cuts and Jobs Act (TCJA) many tax brackets, thresholds, and rate changes became effective on January 1, 2018.
Keep in mind, the lower tax rates for individuals in the chart below are going to expire in 2025.
Source: Internal Revenue Service https://taxfoundation.org/2020-tax-brackets
Other changes impacting individual taxpayers:
For detailed information, click Federal Tax Chart
For more information about your Federal Benefits & Retire-Ready Income for Life Report, Schedule an Online Review, Register for a Seminar, or Meet with your Federal Benefits Coach.
Social Security History
The Social Security Program began when President Franklin D. Roosevelt signed the 1935 Social Security Act. Originally named the Social Security Board (SSB) it only provided benefits for workers who became eligible for benefits at age 65.
In 1939, Congress passed amendments to extend benefits to spouses and minor children of retired and deceased workers. Disability benefits started in 1954 and, over the next few years, it was expanded to include the families of disabled workers. Supplemental Security Income (SSI) and cost-of-living adjustments (COLA) were added in 1972.
By 1975, the Social Security Trustee’s report warned that the Old-Age, Survivors, and Disability Insurance (OASDI) Trust Funds were in danger of being depleted by 1979. To address the problem, Congress enacted amendments that increased the payroll tax, increased the amount of income eligible for the payroll tax, and reduced benefits slightly.
During the economic slowdown of the early 1980s the OASDI Trust Funds were again faced with short-term funding problems. As a result, Congress passed law that created a gradual increase over time of the Full Retirement Age (FRA) from 65 to 67. It also increased Social Security tax rates and new Social Security taxes for the wealthiest individuals. This law is still in place today.
How Social Security Works – An Overview Of Social Security
The Social Security program is based on contributions that working Americans pay into the system. While employed, your contributions are made through FICA (Federal Insurance Contributions Act) taxes that are withheld from your paychecks.
To be eligible for Social Security Retirement Benefits, you must accumulate work credits. Your earnings determine the number of Social Security credits you receive each year with a maximum of four credits per year. If you were born in 1929 or after, you need a total of 40 credits (10 years of work). These credits remain on your record even if you change jobs or stop working for a while. When you retire, your monthly benefit is based on your highest 35 years of earnings.
Keep in mind, Social Security was never intended to be the only source of income for retirees. It is estimated that Social Security replaces about 40 percent of an average worker’s income after retiring. In fact most financial advisors say you’ll need 70 percent or more of your pre-retirement earnings to live comfortably after you retire.
When You Can Retire
Understanding Full Retirement Age (FRA)
Due to legislation passed by Congress in 1983, the age workers can start receiving full Social Security retirement benefits has been gradually increasing. Currently, the Full Retirement Age (FRA) is age 66 if you were born in 1943 through 1954. The FRA will gradually rise to age 67 if you were born in 1960 or later.
Early retirement benefits will continue to be available at age 62 but there are two things to keep in mind. At age 62, the amount of your benefit will be reduced because you will be receiving benefits during the years before you reach your FRA (see chart below). And if your full-benefit age is raised to 67, benefits you take at age 62 will be reduced even more.
It’s also important to note The Bipartisan Balanced Budget Act of 2015 introduced substantial changes to Social Security claiming rules. These changes impacted File and Suspend and Restricted Application — two claiming options that enabled married couples to earn Delayed Retirement Credits.
Age To Receive Full Social Security Benefits
(Called “full retirement age” or “normal retirement age.”)
| Year of Birth* | Full Retirement Age |
| 1937 or earlier | 65 |
| 1938 | 65 and 2 months |
| 1939 | 65 and 4 months |
| 1940 | 65 and 6 months |
| 1941 | 65 and 8 months |
| 1942 | 65 and 10 months |
| 1943-1954 | 66 |
| 1955 | 66 and 2 months |
| 1956 | 66 and 4 months |
| 1957 | 66 and 6 months |
| 1958 | 66 and 8 months |
| 1959 | 66 and 10 months |
| 1960 and later | 67 |
| *If you were born on January 1st of any year you should refer to the previous year. (If you were born on the 1st of the month, we figure your benefit (and your full retirement age) as if your birthday was in the previous month.) | |
INSTANT DOWNLOAD
Four Myths About Social Security Income: “WILL YOUR SOCIAL SECURITY INCOME BE TAXED?”
Don’t let a lack of Information derail your retirement! Download this 6-page guide to see why a retirement income analysis can be the difference between enjoying retirement or white-knuckling your way through it.
Helpful IRS.Gov Links:
IRA Individual Retirement Arrangements – IRS Form 590-A:
https://www.irs.gov/pub/irs-pdf/p590a.pdf
IRA Individual Retirement Arrangements – IRS Form 590-B:
https://www.irs.gov/pub/irs-pdf/p590b.pdf
Updated Tax Withholding Calculator:
https://www.irs.gov/individuals/irs-withholding-calculator
Detailed Information About Credits & Deductions:
https://www.irs.gov/credits-deductions-for-individuals
Get Your Tax Record:
https://www.irs.gov/individuals/get-transcript
IRS Tax Tips & Tools:
https://www.irs.gov/newsroom/irs-tax-tips
The Latest “Dirty Dozen” Phone & Email Tax Scams:
https://www.irs.gov/newsroom/dirty-dozen
IRS Consumer Alerts:
https://www.irs.gov/newsroom/tax-scams-consumer-alerts
IRS Fact Sheets:
https://www.irs.gov/newsroom/fact-sheets
When you register for an Online Review or a Live Workshop, you get the opportunity to have a personal One-on-One Meeting with your Educator/Advisor to get your custom Federal Benefits Kit with a Tax-Free Evaluation including a complimentary Retirement Analyzer Plan!
For more information about your Federal Benefits & Retire-Ready Income for Life Report, Schedule an Online Review, Register for a Seminar, or Meet with your Federal Benefits Coach.
This material has been prepared for informational and educational purposes only. It is not intended to provide nor should be relied upon for accounting, legal, tax, or investment advice. Federal Benefits Information Center is not a federal government agency.
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