Winners and losers in the Social Security system
An analysis of data shows that low-income clients get more than the payroll taxes they pay from Social Security, while high-earning workers get less, according to this article on The Wall Street Journal. By one estimate, the turning point is currently around $65,000 for a single worker and double that for couples earning similar pay, the article said. Social Security has been more generous to workers in low-income groups, says a former government official. “The idea has always been to replace a greater percentage of lower-earners’ wages.”


Bloomberg News

Even math teachers are at a loss to understand annuities
Annuities are difficult for teachers, government workers and nonprofit employees to understand because of the way the contracts are written, according to this article on The New York Times. The terms in an annuity contract can be confusing even for a competent math teacher. “The document is filled with jargon, but at the same time, it is mathematically ambiguous,” says a math teacher who is a recipient of the Presidential Award for Excellence in Mathematics and Science Teaching. The teacher said that the lack of transparency is "infuriating to me as a mathematician."

The 5-point personal finance checklist for 60-somethings
As soon as they hit their 60s, clients should engage in financial planning that includes a Social Security claiming strategy, according to this article on personal finance website Motley Fool. They should also consider paying off their mortgage and creating a budget that accounts for all their needs after they retire. When in their 60s, clients are advised to max out contributions to their retirement plans and move their assets to bonds and other less risky investments.

Nearly half of young adults lack retirement savings, pension
A recent survey has found that 48% of people in the 18-30 age group have not saved a single dollar for retirement and do not have a pension, according to this article on USA Today. More than 40% of people aged 25 to 30 have saved nothing for the golden years, the survey also found. The findings should present a concern for this generation which will have to rely mainly on personal savings to secure their retirement, as fewer of them have access to pension and they will get less in Social Security benefits than what their elders have received.

In praise of auto-pilot investing
Investors are more likely to succeed running their portfolio on auto-pilot, writes an expert on Morningstar. Such strategy can also be useful in retirement spending, as models are found to be "static," the expert says. For example, retirees may tap into their investment portfolio with a 4.5% withdrawal rate and develop a flexible spending plan based on the amount of income that they get based on their withdrawal rate.

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