Tax season is nearly upon us — the IRS says it will begin accepting tax returns on January 29. In addition, the IRS has raised the maximum income for using the online Free File system. Taxpayers with adjusted gross income up to $79,000 can now take advantage of the free guided tax prep program.
Many economists are expressing increased optimism about the U.S. economy as the new year gets underway, and it appears many consumers agree. A major index that measures consumer sentiment jumped significantly this month, hitting its highest level in more than two years.
The transition from widely available defined benefit pension plans to defined contribution plans like 401(k)s has led to generations of private-sector workers being unprepared for retirement, according to labor economist and author Teresa Ghilarducci. She argues that there’s enough data to show the change has been a failure and many workers are now forced to retire earlier than expected, exacerbating the problem.
If you’re planning for retirement, enlisting the help of a professional can provide peace of mind, but a recent survey found that more than 60% of Americans in the 50-plus age group have never consulted with a finance pro. And while 30 percent of those survey respondents said they haven’t done so because they can’t afford to, an even larger share said they prefer to handle their finances on their own.
News You Should Know is a digest of news from publications around the nation about finance, investing, and retirement.
Defined benefitAlso known as a pension, this is a type of pooled retirement plan in which the plan promises to pay a lifetime benefit to the employee at retirement. The plan manages investments on behalf of members, and the retirement benefit is based on factors such as age at retirement, years of employment and salary history.Defined contributionA type of individual retirement plan in which an employee saves a portion of each paycheck (along with a potential employer match) and invests that money. The employee’s retirement benefit is based on their account balance at retirement. A 401(k) is a type of defined contribution plan.