New family leave proposal would require you to delay Social Security benefits

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New family leave proposal would require you to delay Social Security benefits
A bill introduced by Sen. Joni Ernst, R-Iowa, and Sen. Mike Lee, R-Utah, would enable new parents to take up to three months of paid leave, provided they would delay their Social Security retirement benefits, according to this article on CNBC. Under the CRADLE Act, the amount of benefits parents could collect during their leave from work will be based on Social Security’s disability formula, which is more generous that the one used for calculating retirement benefits. “The U.S. is one of the few countries that doesn’t have paid family leave, and it’s clearly a need and can often cause families hardship around the time of a birth,” says an expert.

Why using your tax return to save for retirement is a really good idea
Setting aside a portion or all of the tax refund in retirement savings accounts such as 401(k)s and IRAs is a wise financial move that taxpayers expecting a windfall from the IRS should do, according to this article on Motley Fool. That’s because savings in these accounts grow exponentially through the power of compounding. For example, clients will end up with $19,000 over 30 years if they sock away $2,500 of their tax refund in a tax-advantaged account, assuming the annual average market return is 7%.

Don't make this retirement mistake: basing your decisions on a "magic number"
Clients should avoid the mistake of planning for retirement based a magic retirement number or a savings target, writes a Forbes contributor. Instead, clients should aim for an income that will exceed their overall expenses in retirement, the expert explains. “The trouble with a magic retirement number is that it doesn’t give you a framework for deciding how to manage your finances in retirement. Nor does it help you make critical decisions.”

Ask Larry: How much will my wife's Social Security spousal benefit be?
Although a retiree decided to file for Social Security benefit before full retirement age, his wife will receive a spousal benefit equivalent to 50% of his full retirement benefit if she waits until her FRA to claim the benefit, according to this Q&A article on Forbes. However, his decision to claim reduced benefit will limit her widow’s benefit in case he predeceases her. She will be better off filing for the spousal benefit at her FRA and shift to her own retirement benefit at age 70, as this will result in higher retirement benefit payout.

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Social Security Retirement income Tax returns Tax planning FMLA Financial planning