Hot Off the Press - Gongwer 1-26-17
“If legislators are able to get a repeal of the current pension tax on the governor’s desk, it will not get his signature, according to a statement he made to the media after an event Thursday.” It was a good thought while it lasted. Maybe he will change his mind?
State Workers Short on Retirement Savings
A recent Michigan Information and Research Services (MIRS) article discusses new information out from the state’s Office of Retirement Services (ORS) that indicates that the median amount state workers have saved for retirement is $37,260. The average amount saved is better, at $79,878, “but still unlikely, even with Social Security payments, to provide state workers with the 70 percent to 90 percent of pre-retirement income most financial experts say individuals will need during their retirement.”
The state has increased its efforts in encouraging workers to save for retirement. At one point 30 percent of workers were not saving for retirement. Now it’s less than 10 percent according to ORS. ORS Director Vander Bosch is quoted as saying that “about 10 percent of all state workers contribute 12 percent or more of their salary to retirement.”
It is an excellent article. For those of you who have access to MIRS, this is a good read.
This notice was posted on their web site listed at the end of this statement. “We will mail fewer paper Social Security Statements. Paper Statements will only be sent to people age 60 and over, who are not getting benefits and don’t have a my Social Security account. This will bring down the costs of processing and mailing paper Statements by $11.3 million in FY 2017.
We know that our cutbacks will affect many of you, but we have no choice. We will continue to serve you and work for you as best we can. Congress has until April 28, 2017, to pass a spending bill for the full year or pass another CR. While we can’t predict our budget level for the rest of the fiscal year, we think there may be more bumps in our journey together. We’ll do our best to get through them so you will have a secure today and tomorrow.” Read more at http://blog.socialsecurity.gov.
Another reminder regarding SSA, “Beginning this year, the amount of earnings subject to Social Security tax will go up from $118,500 to $127,200. This change will affect about 12 million of the 173 million workers who pay into the system.
Pension Fund Lawsuits
Northern Trust Corp. will pay more than $4.2 million to settle a lawsuit filed by a group that includes two Pontiac, Mich., pension systems over investment losses that occurred during the financial crisis. The Chicago-based financial services firm violated its fiduciary and contractual duties when it “invested its clients’ assets in risky, long-term investments ... that plummeted in value,” the lawsuit, filed in U.S. District Court for the Northern District of Illinois, had alleged. Read more at www.chicagotribune.com.
Using data from University of Michigan’s Health and Retirement Study (HRS), the most comprehensive national survey of older Americans, the study finds that retirees with more assets report higher levels of “very satisfying” retirement: 71.5 percent for those in highest-asset quartile, compared with just 33.1 percent of those in the lowest. Conversely, the lowest-asset quartile has the highest rate (19.4 percent) of “not at all satisfying” retirement, compared to only 2.8 percent in the highest-asset quartile.
Pension and Investment Data
Find more information at www.pionline.com
How Far Will This Get?
State Representative Tom Barrett and State Senator Rick Jones have introduced bills to repeal the pension tax. The two Eaton County Republicans say it was, “unfair to blind-side people with a new tax after they had started planning for retirement.” Highly unlikely the Governor will agree. Let’s see what happens.
Taxes and Older Americans
A recent report from the Center for Retirement Research at Boston College states that “large majority of America’s older population pay no federal income tax seemed to surprise some readers – particularly retirees who must send checks to the IRS at this time of year.” While that may be true for some, many who receive required minimum distributions from savings as well as social security, can see large tax payments going out to uncle Sam. While the standard deduction is larger for seniors, this does not mitigate the taxes taken out for social security benefits if other income is too high. Saving and investing sometimes means an 85% tax on your social security benefit. Read the entire article at http://squaredawayblog.bc.edu.
Help with Taxes
A news release from the Department of Treasury advises, Free Tax Help. Seniors and individuals with functional needs may qualify for free tax preparation help from IRS-trained volunteers or Tax Counseling for the Elderly preparers. For information about free tax help, go to www.michiganfreetaxhelp.org or dial 2-1-1.
The $196.4 billion California State Teachers’ Retirement System approved lowering the pension fund’s assumed rate of return to 7% from 7.5% over the next two years because of diminished capital market and inflation forecasts. Read more at Pension and Investments web site.
Are you looking for a volunteer opportunity that makes a huge impact on our community? The Greater Lansing Meals-on-Wheels Program (MOW) is in urgent need of volunteers, and adopting a delivery route might be a perfect way for individuals or groups to get involved. And it only takes an hour!
The MOW program provides a valuable service to older adults in our community, and it depends almost entirely on volunteers. Clients not only receive a hot, nutritious meal delivered to their home, they also benefit from the personal contact with the people who deliver the meals.
Currently, MOW delivers meals Monday through Friday between the hours of 10:30 am and 1:30 pm to almost 750 seniors throughout Greater Lansing, with more than 2,200 clients across the tri-county area. Nearly 80 more are on a waitlist. To learn more, or to start a Delivery Team, please contact Vicki Watson at 517-887-1424 or via email at WatsonV@tcoa.org. An online volunteer application is also available at www.tcoa.org/volunteer if you would like to get started.
Editor’s note: June Morse may be contacted at firstname.lastname@example.org or 517-886-9323.
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