In-house tax attorneys at the IRA Financial Group spent six months working on the publication that provides an in-depth
overview of Internal Revenue Service (IRS) and Employee
Retirement Income Security Act (ERISA) rules governing the establishment
and operations of a solo 401(k) plan, also known as an individual
401(k) plan or self-employment 401(k) plan.
“We believe it is crucial that our clients are provided the
resources necessary to fully understand the rules involved in creating
and maintaining an IRS compliant solo 401(k) plan,” said Adam Bergman,
a tax attorney at the IRA Financial Group. “In
addition to having access to our in house tax-attorneys, we believe our
in-depth free solo 401(k) publication will be a very helpful tool for
our solo 401(k) plan clients.”
Social Security Top Source of Income for Retirees, Says SSA
Social Security is the most significant source of income for
Americans age 65 and older, and its importance has continued to grow,
according to a report from the Social Security Administration.
Social Security made up 38% of the total income of people
age 65 and older in 2009—up from 30% in 1962—and is the largest source
of retirement income, according to data from the SSA. The second-largest share of retirement income is earnings from work
(29%), a proportion that has remained consistent since 1962.
Asset income has shrunk from 15% of retirement income in
1962 to 11% in 2009. Over the same period, income from private pensions
has grown from 3% to 9%, and government employee pensions have increased
from 6% to 9% of all retirement income.
Social Security made up 50% or more
of the retirement income of 66% of Americans age 65 and older in 2009,
up from 64% in 2008. And more than a third of retirees (35%) receive 90%
or more of their income as a monthly payment from the Social Security
Administration.
Social Security also covers more people than any other type
of retirement benefit. The great majority of retired Americans age 65
and older (87%) received Social Security income in 2009, up from 69% in
1962. In contrast, only about half (53%) of older Americans have asset
income in retirement, a proportion that is unchanged since 1962. The
proportion of retirees receiving private-sector pension income has grown
from 9% to 28%. And 14% of seniors have government pension income, up
from 9% in 1962. The proportion of older Americans with income from work
has fallen from just over a third in 1962 to about a quarter in 2009.
The Social Security Administration report indicates that while
Social Security makes up a large share of the typical retiree's income,
the checks are fairly small. The average monthly payout to retired
workers was $1,176 in 2010. More than 54 million Americans were paid a
Social Security benefit last year. Retired workers make up the bulk of
people receiving Social Security payments (64%), but the program also
makes payments to disabled workers (15%), spouses of deceased workers
(12%), and the spouses and children of retired or disabled workers (9%).
The
proportion of women receiving retired-worker benefits has quadrupled
since the program was founded, from 12% in 1940 to 49% in 2010. About a
quarter (26%) of women age 62 or older received benefits on the basis of
only their husband's earning record in 2010, down from 57% in 1960. A
growing share of women (28%) now have a dual entitlement to Social
Security on the basis of both individual and spousal earnings, up from
5% in 1960. Married individuals can claim Social Security on the basis
of their own work record or up to half of the higher earner's benefit,
whichever is higher, U.S. News and World Report explained.
Despite
the program's growing importance, people now pay a smaller proportion
of their income into the program than they did when it was founded. Only
about 84% of earnings from employment were taxable in 2010, compared
with 92% in 1937. That's because workers pay into the Social Security
Trust Fund on earnings up to the taxable maximum, which was $106,800 in
2010. Some 6% of Americans had earnings from employment that exceeded
the maximum amount subject to Social Security taxes in 2010, compared
with 3% when the program began.
The federal program also has a long-term deficit. The Social Security Trust Fund is projected to be exhausted in 2036 (see "Social Security Assets to be Adequate for Next 10 Years").
At that time, payroll taxes and other income will generate only enough
income to pay out 77% of program costs, unless tax increases, benefit
cuts or other changes to the program are implemented, the news report
said.