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Tag: U.S. Department of Labor

  • Retirement Planning “Toolkit” Outlines Optimal Strategies

    Baby Boomers are beginning to retire, and that means huge shifts coming to the American economy. The exodus of older workers from the labor market could ease employment troubles for younger workers looking to break into their field, but the millions of workers set to retire over the next decades could also mean big costs for companies and the U.S. as pension systems pay out and the government picks up the slack for those who haven’t retired responsibly.

    Seeing the coming wave of retirees, the U.S. government has released a retirement “toolkit” meant to help prospective retirees cover their expenses after they cease working. The U.S. Department of Labor, U.S. Social Security Administration, and the Centers for Medicare & Medicaid Services threw together the document to help aging workers wade through the convoluted rules and regulations surrounding their retirement funds.

    The main portion of the document is aimed at those over 50. The toolkit provides a timeline showing when certain retirement events can take place without incurring penalties.

    The timeline shows that at age 50 workers can begin making “catch-up” contributions to their pension plans. Six months before age 60 employees can begin to withdraw funds from their individual plans without penalties. Age 62 is the earliest age at which workers can draw on their Social Security benefits, though drawing that early will cause monthly benefits to be significantly reduced. Medicare and Medicare Part D are available for workers and retirees starting at age 65. Age 70 is, more or less, the deadline for being retired. At that age most retirement savings plans require at least minimum withdrawals or else charge penalty fees.

    For workers who can’t even think of retiring yet, the toolkit still has a few suggestions. The document warns workers not to touch their personal retirement savings plans until at least six months before they turn 60, lest they pay tax penalties and lose interest. It also advises that waiting until after full retirement age (66 for those born between 1943 and 1954, 67 for those born between 1955 and 1959) to pull Social Security benefits can increase monthly benefits by around eight percent for every year waited.

    Image via the U.S. Department of Labor

  • Labor Department Reports 148,000 Jobs Added

    The U.S. Labor Department finally released its September employment report Tuesday morning, having been delayed by the government’s 16-day shutdown, which began on October 1. According to the monthly overview, U.S. employers added 148,000 new job positions in September, a dismal comparison to the 185,000 jobs that were added each month last year. The most enterprising positions indicated in the summary were in warehousing, transportation, construction, and wholesale trade.

    Currently, the number of people employed by the federal government looks even more discouraging, economically, as only 2% of Americans worked in federally-run positions before the shutdown – the lowest of this century, as well as the lowest in almost 50 years; in 1966, 4.6% of citizens were on federal payrolls – more than twice what it is now. To further put that into perspective, those figures don’t even include military employment, which was 2.6 million people in 1966 and, today, is 1.4 million.

    Now, upon the bleak figures of the report, economists are concerned about the Federal Reserve’s spending; the Fed was presumed to be planning to cut down on major asset purchases, as the economy showed a steady incline. With September’s report, however, that does not now seem likely.

    In a letter to customers, Barclays analysts’ wrote, “In light of the moderate tone of the September employment report, we have pushed out our expectation for the first Fed tapering in the pace of asset purchases to March 2014 from December 2013.”

    As reported by The New York Times, Pantheon Macroeconomics’ chief economist Ian Shepherdson expressed to clientele that, now, because of the shutdown, economic data based on the monthly employment report by the Labor Department will continue to be tainted until December. That means that the Fed, whose “core criteria to change policy is clear evidence of a sustained improvement in labor market outlook,” probably won’t make any effort to reduce spending until December’s report comes out in January 2014.

    You can read the entire report for yourself by clicking the link above or visiting the homepage for the Bureau of Labor Statistics at bls.gov.

    Image courtesy Dan Smith (Rdsmith4) via Wikimedia Commons.