Social Security/Medicare

According to a paper released on October 31, 2008, by the Brookings Institution, the debate over Social Security reform has focused on personal savings accounts, overlooking the issue of financial risk. The paper said individual retirement accounts invested solely in the stock market offer a very sh...

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Bibliographic Details
Published inTax Management Financial Planning Journal Vol. 24; no. 11; p. 296
Format Trade Publication Article
LanguageEnglish
Published Washington Bloomberg BNA 18.11.2008
Subjects
Consumer Price Index
Cost of living adjustments
Earnings
Employees
Medicare
Pensions
Purchasing power
Reforms
Retirement income
Savings accounts
Securities markets
Self employment
Social security
Social security taxes
Tax rates
Workers
Workers with disabilities
United States > US
Online AccessGet full text
ISSN8756-1360
1558-7290

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Summary:According to a paper released on October 31, 2008, by the Brookings Institution, the debate over Social Security reform has focused on personal savings accounts, overlooking the issue of financial risk. The paper said individual retirement accounts invested solely in the stock market offer a very shaky cornerstone for retirement income. Workers fortunate enough to retire when stock prices are high obtain big pensions, while workers with the bad luck to retire after markets plunge can be left with little money to live on in retirement, it said. The maximum amount of earnings subject to Social Security tax will increase to $106,800 in 2009, up from $102,000 in 2008. Social Security tax rates for employees and self-employed taxpayers - 6.2% and 12.4%, respectively - will not change in 2009. The mandatory Medicare tax of 1.45% also remains unchanged and applies to all earnings, SSA said. Thus, the resulting total Federal Insurance Contributions Act tax rate for 2009 remains 7.65% for employees and 15.30% for self-employed taxpayers.
ISSN:8756-1360
1558-7290