Social Security Case Study

1) Social Security is able to fit itself into a retirement plan because it is intended to ensure the retiree that they will receive some type of income. It won’t be enough to provide for most people’s lifestyle which is why despite it being able to help people out, individuals need to plan an additional means of living. In order to be qualified for Social Security benefits, one must build up a total of 40 credits from contributing to Social Security overtime through payroll taxes. You could also receive benefits if you're disabled or if the sole breadwinner of the household passes away. The earliest someone can receive benefits is at the age of 62. Full retirement benefits begin at 65 to 67, depending on what year you were born.
3) There has been much debate on whether or not the Social Security will be an existing program for retirees in the future. Today’s retirees have a much longer
life expectancy so the program must provide income over a longer period to individuals on average. Another concern is that in the future, there will be more retirees than workers so the idea of them supporting the retirees will be more difficult. This sense of uncertainty for the future of the program is doubling for those who solely rely on this as a source of income.
8) The 401(k) plan contains some characteristics.
One is that some 401(k) plans provide matching contribution to the firm. This means that the matching contribution affects retirement savings of other employees. Another characteristic is tax is deferred on money withdrawn from the account which can affect contribution. Then there is the 403(b) plan which is a defined-contribution plan allowing employees on nonprofit organizations to invest up to $17,000 of their income on a tax-deferred basis.
14) Annuity is a financial contract that provides annual payments over a specified period. The difference between a fixed annuity and a variable annuity is that fixed annuity returns are based on initial investment and variable annuity returns are based on performance of investment. Fixed annuity is best for a short amount of time while variable annuity does not guarantee a specific return over time, making it best for long periods.The main disadvantage of annuity is the high fees associated with it. There are fees such as management fees, surrender fees, insurance fees and
commission.
19) The main advantage of retirement planning is that it allows individuals to have a successful retirement. If they plan correctly, there will ensure a more secure future. In addition, it could offer tax-free contribution to the retirement account. The tax-free benefit could allow funds to grow faster over a period of time.