Individual Retirement Accounts (IRAs)

Individual Retirement Accounts (IRAs) PDF Author: Ray Schmitt
Publisher:
ISBN:
Category :
Languages : en
Pages :

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Book Description
This report discusses Individual Retirement Arrangements (IRA) and their tax incentives. Many workers covered by employer-sponsored retirement plans do not work long enough with one employer to be entitled to a pension. Others may be covered by a profit-sharing plan to which the employer may have little or no profits to contribute. Since these individuals were "covered" by a retirement plan, they were ineligible to make tax-deductible contributions to a tax-sheltered Individual Retirement Arrangement (IRA). Many observers considered this a tax inequity and felt that all employees should be eligible to establish their own IRAs or make tax-deductible contributions to their employer's plan. Congress responded to this situation by approving retirement savings incentives for all workers as part of the tax cut bill (H.R. 4242). All workers, whether or not covered by an employer pension plan, are now permitted tax deductible contributions to IRAs up to $2,000 a year.

Individual Retirement Accounts

Individual Retirement Accounts PDF Author: Felix R. Burnes
Publisher: Nova Science Pub Incorporated
ISBN: 9781606924068
Category : Business & Economics
Languages : en
Pages : 139

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Book Description
Individual retirement accounts, or IRAs, hold more assets than any other type of retirement vehicle. In 2004, IRAs held about $3.5 trillion in assets compared to $2.6 trillion in defined contribution (DC) plans, including 401(k) plans, and $1.9 trillion in defined benefit (DB), or pension plans. Similar percentages of households own IRAs and participate in 401(k) plans, and IRA ownership is associated with higher educational and income levels. Congress created IRAs to provide a way for individuals without employer plans to save for retirement, and to give retiring workers or those changing jobs a way to preserve retirement assets by rolling over, or transferring, plan balances into IRAs. Rollovers into IRAs significantly outpace IRA contributions and account for most assets flowing into IRAs. Given the total assets held in IRAs, they may appear to be comparable to 401(k) plans. However, 401(k) plans are employer-sponsored while most households with IRAs own traditional IRAs established outside the workplace. Several barriers may discourage employers from establishing employer-sponsored IRAs and offering payroll-deduction IRAs to their employees. Although employer-sponsored IRAs were designed with fewer reporting requirements to encourage participation by small employers and payroll-deduction IRAs have none, millions of employees of small firms lack access to a workplace retirement plan. Retirement and savings experts and others told the authors that barriers discouraging employers from offering these IRAs include costs that small businesses may incur for managing IRA plans, a lack of flexibility for employers seeking to promote payroll-deduction IRAs to their employees, and certain contribution requirements of some IRAs. Information is lacking, however, on what the actual costs to employers may be for providing payroll-deduction IRAs and questions remain on the effect that expanded access to these IRAs may have on employees. Experts noted that several proposals exist to encourage employers to offer and employees to participate in employer-sponsored and payroll-deduction IRAs, however limited government actions have been taken. The Internal Revenue Service and Labour share oversight for all types of IRAs, but gaps exist within Labour's area of responsibility. IRS is responsible for tax rules on establishing and maintaining IRAs, while Labour is responsible for oversight of fiduciary standards for employer-sponsored IRAs and provides certain guidance on payroll-deduction IRAs, although Labour does not have jurisdiction. Oversight ensures the interests of the employee participants are protected, that their retirement savings are properly handled, and any applicable guidance and laws are being followed. Because there are very limited reporting requirements for employer-sponsored IRAs and none for payroll-deduction IRAs, Labour does not have processes in place to identify all employers offering IRAs, numbers of employees participating, and employers not in compliance with the law. Obtaining information about employer-sponsored and payroll-deduction IRAs is also important to determine whether these vehicles help workers without DC or DB plans build retirement savings. Although IRS collects and publishes some data on IRAs, IRS has not consistently produced reports on IRAs nor shared such information with other agencies, such as Labour. Labour's Bureau of Labour Statistics National Compensation Survey surveys employer-sponsored benefit plans but collects limited information on employer-sponsored IRAs and no information on payroll-deduction IRAs. Since IRS is the only agency that has data on all IRA participants, consistent reporting of these data could give Labour and others valuable information on IRAs.

Mitigating the Inequity of the Military Retirement System by Changing the Rules Governing Individual Retirement Accounts for Service Members

Mitigating the Inequity of the Military Retirement System by Changing the Rules Governing Individual Retirement Accounts for Service Members PDF Author: David B. Newman
Publisher:
ISBN: 9781423564959
Category : Individual retirement accounts
Languages : en
Pages : 129

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Book Description
This thesis provides a summary of the military retirement system's history, structure, and purpose, demonstrating that its all-or-nothing structure is unfair to the majority of service members. It reviews the structure of Individual Retirement Accounts and the Employee Retirement Income Security Act, which governs private-sector retirement plans and their treatment by the Internal Revenue Code. It demonstrates that the inequity of the military retirement system is compounded by the fact that although the system does not comply with the minimum standards required of private-sector retirement plans, it is treated identically in determining whether the employee is eligible to deduct his IRA contributions from taxes. The thesis reviews the extensive economic literature on the IRAs' effectiveness in increasing private saving and concludes that IRAs do lead to additional saving. The thesis proposes allowing all service members to deduct their IRA contributions from taxes regardless of income, and estimates the effect of doing so on government debt and national savings. It concludes that the cost is so small - at most $30 million annually - that cost is no obstacle to the proposal.

Taxation of Individual Retirement Accounts

Taxation of Individual Retirement Accounts PDF Author: David J. Cartano
Publisher: CCH
ISBN: 9780808020011
Category : Business & Economics
Languages : en
Pages : 1160

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Book Description
Taxation of Individual Retirement Accounts comprehensively analyzes all the tax laws applicable to individual retirement accounts. The first part of the book discusses the 15 different types of IRAs, including the four most recent types authorized by the tax laws: the Roth IRA, the education IRA, the SIMPLE IRA, and the deemed IRA. The second part discusses the various areas of tax law relating to the operation and administration of an IRA. There is a separate chapter on each area of the tax law. The third part of the book deals with taxation of distributions from an IRA, including premature distributions, minimum distributions during lifetime and after death, withholding taxes, and estate taxes. It also deals with the tax rules applicable to the different types of the beneficiaries receiving distributions from an IRA, including foreign beneficiaries, charitable beneficiaries, trust beneficiaries, estate beneficiaries, spouse and nonspouse beneficiaries, and individual and non-individual beneficiaries.

Retirement Savings and Security

Retirement Savings and Security PDF Author: Linda A. Eisterhold
Publisher: Nova Science Pub Incorporated
ISBN: 9781629481326
Category : Business & Economics
Languages : en
Pages : 204

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Book Description
This book provides an overview of select elements and considerations of retirement savings and security with a focus on Social Security financing and benefits under current law; eligibility requirements, contribution limits, tax deductibility of contributions, and rules for withdrawing funds from traditional and Roth Individual Retirement accounts (IRAs); 401(k) plans and retirement savings; Federal Employees' Retirement System benefits and financing and the role of the Thrift Savings Plan; and the benefits, risks and regulations of annuities with guaranteed lifetime withdrawals.

Retirement Savings Plans

Retirement Savings Plans PDF Author: Paul J. Graney
Publisher: Nova Publishers
ISBN: 9781590339077
Category : Business & Economics
Languages : en
Pages : 164

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Book Description
Individual retirement accounts (IRAs), established by the Employee Retirement Income Security Act of 1974 (PL 93-406) to promote retirement saving, were limited at first to workers (and spouses) who lacked employer pension coverage. Income tax was deferred on both contribution and investment earnings. Annual contributions were limited to the smaller of $1,500 or 15% of earnings. Eligibility was expanded to all workers and their spouses by the Economic Recovery Tax Act of 1981 (PL 97-34). Annual contributions were limited to the smaller of $2,000 or 100% earnings. The Tax Reform Act Reform Act of 1986 (PL 99-514) continued tax deferral for IRA earnings, but it limited tax deferrals for contributions to those from: (1) tax filers with no employer plan (for either spouse); and (2) filers with employer pension coverage but whose adjusted gross income (AGI) is below specified limits. The Taxpayer Relief Act of 1997 (PL 105-34) increased these AGI limits, allowed penalty-free early withdrawals for higher education expenses and first-home purchases, and authorised a new 'Roth IRA' to provide tax-free income from after-tax contributions and untaxed investment earnings. This book reviews the key details concerning these legal arrangements for retirement.

Individual Retirement Accounts: Government Actions Could Encourage More Employers to Offer IRAs to Employees

Individual Retirement Accounts: Government Actions Could Encourage More Employers to Offer IRAs to Employees PDF Author: Barbara D. Bovbjerg
Publisher: DIANE Publishing
ISBN: 1437907083
Category :
Languages : en
Pages : 29

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Book Description
Congress created individual retirement accounts (IRAs) with two goals: (1) to provide a retirement savings vehicle for workers without employer-sponsored retirement plans; and (2) to preserve individuals¿ savings in employer-sponsored retirement plans when they change jobs or retire. Questions remain about IRAs¿ effectiveness as a vehicle to facilitate new, or additional, retirement savings. This is a report on: (1) the role of IRAs in retirement savings; (2) the prevalence of employer-sponsored and payroll-deduction IRAs and barriers discouraging employers from offering these IRAs; and (3) changes that are needed to improve IRA information and oversight. Charts and tables.

Uncharted Waters

Uncharted Waters PDF Author: Kenneth S Apfel
Publisher: Brookings Institution Press
ISBN: 0815797710
Category : Political Science
Languages : en
Pages : 224

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Book Description
In the debate over Social Security reform, most of the work on individual accounts has focused on how individuals would save and manage those accounts during their working lives. Uncharted Waters goes further and addresses the often neglected questions about how and under what circumstances funds could be withdrawn from these accounts. In Uncharted Waters, a panel of recognized experts created a framework for determining how benefits might be paid if private accounts become a new part of the Social Security system or are created separate from Social Security. This important volume analyzes the potential implications of different policy choices. It considers the ramifications of payout rules for families at different stages of life, particularly for economically disadvantaged groups. The contributors also address how any new individual account program would fit with traditional Social Security, employer-based pensions, and tax-advantaged individual retirement savings (401(k)s and IRAs). As the debate over individual savings accounts rages, Uncharted Waters offers a sound framework for informing public policy on both sides of the argument.

Individual Retirement Accounts (IRAs)

Individual Retirement Accounts (IRAs) PDF Author: Ray Schmitt
Publisher:
ISBN:
Category :
Languages : en
Pages :

View

Book Description
This report discusses Individual Retirement Arrangements (IRA) and their tax incentives. Many workers covered by employer-sponsored retirement plans do not work long enough with one employer to be entitled to a pension. Others may be covered by a profit-sharing plan to which the employer may have little or no profits to contribute. Since these individuals were "covered" by a retirement plan, they were ineligible to make tax-deductible contributions to a tax-sheltered Individual Retirement Arrangement (IRA). Many observers considered this a tax inequity and felt that all employees should be eligible to establish their own IRAs or make tax-deductible contributions to their employer's plan. Congress responded to this situation by approving retirement savings incentives for all workers as part of the tax cut bill (H.R. 4242). All workers, whether or not covered by an employer pension plan, are now permitted tax deductible contributions to IRAs up to $2,000 a year.

Individual Retirement Accounts

Individual Retirement Accounts PDF Author: Felix R. Burnes
Publisher: Nova Science Pub Incorporated
ISBN: 9781606924068
Category : Business & Economics
Languages : en
Pages : 139

View

Book Description
Individual retirement accounts, or IRAs, hold more assets than any other type of retirement vehicle. In 2004, IRAs held about $3.5 trillion in assets compared to $2.6 trillion in defined contribution (DC) plans, including 401(k) plans, and $1.9 trillion in defined benefit (DB), or pension plans. Similar percentages of households own IRAs and participate in 401(k) plans, and IRA ownership is associated with higher educational and income levels. Congress created IRAs to provide a way for individuals without employer plans to save for retirement, and to give retiring workers or those changing jobs a way to preserve retirement assets by rolling over, or transferring, plan balances into IRAs. Rollovers into IRAs significantly outpace IRA contributions and account for most assets flowing into IRAs. Given the total assets held in IRAs, they may appear to be comparable to 401(k) plans. However, 401(k) plans are employer-sponsored while most households with IRAs own traditional IRAs established outside the workplace. Several barriers may discourage employers from establishing employer-sponsored IRAs and offering payroll-deduction IRAs to their employees. Although employer-sponsored IRAs were designed with fewer reporting requirements to encourage participation by small employers and payroll-deduction IRAs have none, millions of employees of small firms lack access to a workplace retirement plan. Retirement and savings experts and others told the authors that barriers discouraging employers from offering these IRAs include costs that small businesses may incur for managing IRA plans, a lack of flexibility for employers seeking to promote payroll-deduction IRAs to their employees, and certain contribution requirements of some IRAs. Information is lacking, however, on what the actual costs to employers may be for providing payroll-deduction IRAs and questions remain on the effect that expanded access to these IRAs may have on employees. Experts noted that several proposals exist to encourage employers to offer and employees to participate in employer-sponsored and payroll-deduction IRAs, however limited government actions have been taken. The Internal Revenue Service and Labour share oversight for all types of IRAs, but gaps exist within Labour's area of responsibility. IRS is responsible for tax rules on establishing and maintaining IRAs, while Labour is responsible for oversight of fiduciary standards for employer-sponsored IRAs and provides certain guidance on payroll-deduction IRAs, although Labour does not have jurisdiction. Oversight ensures the interests of the employee participants are protected, that their retirement savings are properly handled, and any applicable guidance and laws are being followed. Because there are very limited reporting requirements for employer-sponsored IRAs and none for payroll-deduction IRAs, Labour does not have processes in place to identify all employers offering IRAs, numbers of employees participating, and employers not in compliance with the law. Obtaining information about employer-sponsored and payroll-deduction IRAs is also important to determine whether these vehicles help workers without DC or DB plans build retirement savings. Although IRS collects and publishes some data on IRAs, IRS has not consistently produced reports on IRAs nor shared such information with other agencies, such as Labour. Labour's Bureau of Labour Statistics National Compensation Survey surveys employer-sponsored benefit plans but collects limited information on employer-sponsored IRAs and no information on payroll-deduction IRAs. Since IRS is the only agency that has data on all IRA participants, consistent reporting of these data could give Labour and others valuable information on IRAs.

Individual Retirement Accounts (IRA's) in the Retirement System

Individual Retirement Accounts (IRA's) in the Retirement System PDF Author: United States. Congress. House. Committee on Ways and Means. Subcommittee on Select Revenue Measures
Publisher:
ISBN:
Category : Individual retirement accounts
Languages : en
Pages : 162

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Book Description


Mitigating the Inequity of the Military Retirement System by Changing the Rules Governing Individual Retirement Accounts for Service Members

Mitigating the Inequity of the Military Retirement System by Changing the Rules Governing Individual Retirement Accounts for Service Members PDF Author: David B. Newman
Publisher:
ISBN: 9781423564959
Category : Individual retirement accounts
Languages : en
Pages : 129

View

Book Description
This thesis provides a summary of the military retirement system's history, structure, and purpose, demonstrating that its all-or-nothing structure is unfair to the majority of service members. It reviews the structure of Individual Retirement Accounts and the Employee Retirement Income Security Act, which governs private-sector retirement plans and their treatment by the Internal Revenue Code. It demonstrates that the inequity of the military retirement system is compounded by the fact that although the system does not comply with the minimum standards required of private-sector retirement plans, it is treated identically in determining whether the employee is eligible to deduct his IRA contributions from taxes. The thesis reviews the extensive economic literature on the IRAs' effectiveness in increasing private saving and concludes that IRAs do lead to additional saving. The thesis proposes allowing all service members to deduct their IRA contributions from taxes regardless of income, and estimates the effect of doing so on government debt and national savings. It concludes that the cost is so small - at most $30 million annually - that cost is no obstacle to the proposal.

Taxation of Individual Retirement Accounts

Taxation of Individual Retirement Accounts PDF Author: David J. Cartano
Publisher: CCH
ISBN: 9780808020011
Category : Business & Economics
Languages : en
Pages : 1160

View

Book Description
Taxation of Individual Retirement Accounts comprehensively analyzes all the tax laws applicable to individual retirement accounts. The first part of the book discusses the 15 different types of IRAs, including the four most recent types authorized by the tax laws: the Roth IRA, the education IRA, the SIMPLE IRA, and the deemed IRA. The second part discusses the various areas of tax law relating to the operation and administration of an IRA. There is a separate chapter on each area of the tax law. The third part of the book deals with taxation of distributions from an IRA, including premature distributions, minimum distributions during lifetime and after death, withholding taxes, and estate taxes. It also deals with the tax rules applicable to the different types of the beneficiaries receiving distributions from an IRA, including foreign beneficiaries, charitable beneficiaries, trust beneficiaries, estate beneficiaries, spouse and nonspouse beneficiaries, and individual and non-individual beneficiaries.

Retirement Savings and Security

Retirement Savings and Security PDF Author: Linda A. Eisterhold
Publisher: Nova Science Pub Incorporated
ISBN: 9781629481326
Category : Business & Economics
Languages : en
Pages : 204

View

Book Description
This book provides an overview of select elements and considerations of retirement savings and security with a focus on Social Security financing and benefits under current law; eligibility requirements, contribution limits, tax deductibility of contributions, and rules for withdrawing funds from traditional and Roth Individual Retirement accounts (IRAs); 401(k) plans and retirement savings; Federal Employees' Retirement System benefits and financing and the role of the Thrift Savings Plan; and the benefits, risks and regulations of annuities with guaranteed lifetime withdrawals.

Retirement Savings Plans

Retirement Savings Plans PDF Author: Paul J. Graney
Publisher: Nova Publishers
ISBN: 9781590339077
Category : Business & Economics
Languages : en
Pages : 164

View

Book Description
Individual retirement accounts (IRAs), established by the Employee Retirement Income Security Act of 1974 (PL 93-406) to promote retirement saving, were limited at first to workers (and spouses) who lacked employer pension coverage. Income tax was deferred on both contribution and investment earnings. Annual contributions were limited to the smaller of $1,500 or 15% of earnings. Eligibility was expanded to all workers and their spouses by the Economic Recovery Tax Act of 1981 (PL 97-34). Annual contributions were limited to the smaller of $2,000 or 100% earnings. The Tax Reform Act Reform Act of 1986 (PL 99-514) continued tax deferral for IRA earnings, but it limited tax deferrals for contributions to those from: (1) tax filers with no employer plan (for either spouse); and (2) filers with employer pension coverage but whose adjusted gross income (AGI) is below specified limits. The Taxpayer Relief Act of 1997 (PL 105-34) increased these AGI limits, allowed penalty-free early withdrawals for higher education expenses and first-home purchases, and authorised a new 'Roth IRA' to provide tax-free income from after-tax contributions and untaxed investment earnings. This book reviews the key details concerning these legal arrangements for retirement.

Individual Retirement Accounts: Government Actions Could Encourage More Employers to Offer IRAs to Employees

Individual Retirement Accounts: Government Actions Could Encourage More Employers to Offer IRAs to Employees PDF Author: Barbara D. Bovbjerg
Publisher: DIANE Publishing
ISBN: 1437907083
Category :
Languages : en
Pages : 29

View

Book Description
Congress created individual retirement accounts (IRAs) with two goals: (1) to provide a retirement savings vehicle for workers without employer-sponsored retirement plans; and (2) to preserve individuals¿ savings in employer-sponsored retirement plans when they change jobs or retire. Questions remain about IRAs¿ effectiveness as a vehicle to facilitate new, or additional, retirement savings. This is a report on: (1) the role of IRAs in retirement savings; (2) the prevalence of employer-sponsored and payroll-deduction IRAs and barriers discouraging employers from offering these IRAs; and (3) changes that are needed to improve IRA information and oversight. Charts and tables.

Uncharted Waters

Uncharted Waters PDF Author: Kenneth S Apfel
Publisher: Brookings Institution Press
ISBN: 0815797710
Category : Political Science
Languages : en
Pages : 224

View

Book Description
In the debate over Social Security reform, most of the work on individual accounts has focused on how individuals would save and manage those accounts during their working lives. Uncharted Waters goes further and addresses the often neglected questions about how and under what circumstances funds could be withdrawn from these accounts. In Uncharted Waters, a panel of recognized experts created a framework for determining how benefits might be paid if private accounts become a new part of the Social Security system or are created separate from Social Security. This important volume analyzes the potential implications of different policy choices. It considers the ramifications of payout rules for families at different stages of life, particularly for economically disadvantaged groups. The contributors also address how any new individual account program would fit with traditional Social Security, employer-based pensions, and tax-advantaged individual retirement savings (401(k)s and IRAs). As the debate over individual savings accounts rages, Uncharted Waters offers a sound framework for informing public policy on both sides of the argument.

Individual retirement arrangements (IRAs)

Individual retirement arrangements (IRAs) PDF Author: United States. Internal Revenue Service
Publisher:
ISBN:
Category : Individual retirement accounts
Languages : en
Pages :

View

Book Description