Alliance for Lifetime Income Creates Income Presentation

The offering is designed for financial professionals to deliver to clients and prospects.

The Alliance for Lifetime Income has created a presentation, “Three Keys to Income Planning and Answering, ‘What’s Next?,’” on how to create income options in retirement, designed for financial professionals to show to clients and prospects.

“Americans spend decades working, saving and anticipating retirement,” says Jean Statler, chief executive officer of the Alliance. “But many people have no clear idea of how their savings will reliably support them in their post-work years.”

Want the latest retirement plan adviser news and insights? Sign up for PLANADVISER newsletters.

The presentation shows people how to take the initial steps to analyze their situation and start to plan how they will cover their basic expenses in retirement. The presentation introduces viewers to the exercise of creating an “income hierarchy analysis” to understand how they can create income to cover their needs, wants and wishes in retirement. The presentation takes them through 60 different expenses they are likely to face in retirement. They choose which are important to them in order to decide how much protected income their retirement plan should include.

Statler adds that with so many Baby Boomers retiring or planning to do so, they have a real need to understand income planning.

The Alliance conducted a survey of pre-retiree workers in 2019 that found 80% did not have a financial plan.

This year, in March, April and June, the Alliance conducted yet another survey that found, due to the coronavirus pandemic, 56% of respondents were considering a change to their retirement plans.

Guidance on Payroll Tax Deferral Tells When It Must Be Repaid

Notice 2020-65 from the IRS also defines the ‘applicable wages’ per pay period that qualify for the deferral.

In guidance about the payroll tax deferral, the IRS says unpaid amounts must be withheld and paid between January 1 and April 30, 2021.

Payroll taxes are shared by the employer and employee, each paying 6.2% of wages along with a 1.45% tax for Medicare. On August 8, President Donald Trump signed a presidential memorandum directing the Secretary of the Treasury to use his authority to defer the withholding, deposit and payment of taxes to Social Security from September 1 through December 31 for employees making less than $104,000 a year. Employers are still required to pay their portion.

For more stories like this, sign up for the PLANADVISERdash daily newsletter.

According to IRS Notice 2020-65, “the Secretary has determined that employers that are required to withhold and pay the employee share of Social Security tax under Section 3102(a) or the railroad retirement tax equivalent under Section 3202(a) are affected by the COVID-19 emergency for purposes of the relief described in the presidential memorandum.” Treasury Secretary Steven Mnuchin said previously that while he encourages employers to withhold the taxes, he cannot mandate that they do so.

The tax may be deferred for any employee whose “wages or compensation paid for a bi-weekly pay period is less than the threshold amount of $4,000.” The deferred taxes must be withheld and paid ratably per pay period for affected employees between January 1 and April 30 of next year or interest on the amounts will accrue starting May 1.

Trump’s order also directs the Treasury Department to look into how the government can forgive the deferred payments, a power only Congress has. Sources worry that if Congress does so, it would add a significant strain on the solvency of Social Security.

«