All Posts Tagged With: "retirement age"
Seniors are having a hard time making ends meet during the recession in all parts of the world.
Jennifer McClelland | RSS | Mon, Jun 29 2009 | 1 Comment
A report from Age Concern in April said that 24% of seniors in the United Kingdom, around 2.5 million citizens, think that the quality of their lives has diminished during the last year. Twelve months prior to the April 2009 study, the number of citizens who believed this was around 2 million.
The truth is that one out of every five seniors live below the poverty line. Those who are below the poverty line have to do what they can to make ends meet; which includes skipping meals or missing out on essential items. Many are going without electricity and cutting back on gas consumption.
Many seniors who lived through World War II and throughout the post war period have acquired skills that they are now employing to meet their most basic needs. Cooking from scratch instead of buying meals that are already made or going out to eat, from what they cook, eating more leftovers, sewing and fixing their own clothing and growing their own vegetables are all some of the things that seniors are finding themselves doing to save money here and there.
Sixty eight percent of those seniors surveyed feel as though they aren’t held in high reguard by politicians and most have little confidence that the government will help the senior population throughout this recession.
Worse yet, is that many of those seniors that are finding they have to go back to work to just afford those basic necessities are coming up against age discrimination. Men who are older than 50 only have a 20% chance of getting the same job two years after leaving. Then once they lose their job, for every year that goes by, their chances of finding a similar job drops by a further quarter.
In the United States, there is a similar situation. Many seniors are finding themselves going back to work, if they can find work. Some who once held jobs in manufacturing plants simply can’t do work like that anymore due to health issues. If they can do the work, then it is hard to find that kind of work. Even those who had professional desk jobs are having a difficult time finding work. Rules and regulations change over time and if someone is out of that element for any extended period of time, then new rules typically won’t be learned as opposed to someone who is in the business who will know those regulations.
Age Concern’s “One Voice” report ended with seven priorities for action in 2009 for seniors. Those priorities included banning the required retirement age (in the UK), helping with age discrimination by educating seniors in skills, and spending 1 to 2 billion pounds on social care.
Related posts:The Pitch – Where are you finding work in the recession?
Tags: seniors, poverty line, United Kingdom
Touch Not the Retirement Fund, Thus Sayeth the Experts
Michael Bowler | RSS | Thu, May 28 2009 | 0 Comments
This economy is no stranger to financial burdens. We are finding out how fast the mighty really can fall. If the mighty can fall so quickly, it is no wonder that some of us are falling. Sometimes you just have to do what you just have to do in order to financially survive this recession. Just do not do anything hastily, especially things that might hurt retirement or savings.
When financial times get tough, so do the decisions people have to make. Sometimes people have to figure out how they will get the money to pay the bills and sometimes people have to decide what bills they are going to pay this month. In that quest for extra cash, you should be very careful raiding the retirement funds. “This can be the most expensive cash you’ll ever withdraw,” says Ed Slott, an accountant in Rockville Centre, N.Y., whose specialty is retirement.
Early withdrawal of retirement savings from that IRA or that 401k can mean massive penalties and taxes. Unfortunately, to try to minimize this, it is suggested that you work with a financial advisor or accountant that specializes in retirement savings. The federal government usually charges a 10% penalty on money withdrawn from a 401k or IRA by those under retirement age (considered 59 ½).
Withdrawals of earnings and deductible contributions are subject to federal income taxes plus any taxes charged by your state and local jurisdictions. If you live in California, an early-withdrawal fee will be charged by the state. In a Roth IRA, contributions can always be withdrawn without penalty, but earnings can be taxed and penalized to the content of the government(s) that have jurisdiction over you (likely government, state, and local). This does not even count the fees to pay any advisor you may work with.
For people still investing in their company’s 401(k) plan and under retirement age, withdrawals generally are not even permitted unless labor there is terminated. There are, however, certain “hardship” exemptions which are strictly adhered to legally, including medical expenses, avoiding foreclosure on a home or funeral costs. Even so, those exemptions are still heavily taxed and penalized.
IRA rules are more lenient, allowing hardship withdrawals without the penalty, but the money will still be subject to steep taxes. In most cases, the only way for someone in a 401k under retirement age to avoid the penalties and taxes is to borrow from the 401k account. These loans can’t be more than 50% of the balance of the account or total more than $50,000. Here is the rub, though: it must be paid off within five years.
“Some companies will allow in-service withdrawals only for severe hardships; others don’t bother imposing restrictions,” says Frank Palmieri, a Princeton, N.J., benefits attorney. Anyone considering withdrawing money from a retirement account should consider it nearly mandatory to sit down with an accountant. You’ll want to consider the taxes and penalties hit which should be factored into how much money is withdrawn.
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Tags: recession, retirement age, roth ira contributions
