2015 Tax Changes Arm Baby Boomers With New Strategies For Retirement

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How the new U.S. tax laws for 2015 will help Baby Boomers in their ongoing efforts to prepare for and successfully manage retirement.

The U.S. Government has implemented new tax laws for 2015, which will benefit many, but can make a significant difference in the lives of Baby Boomers who are now faced with the daunting task of preparing for or dealing with retirement.

A recent Census Bureau report states that over 40 million Americans are aged 65 and older. This makes up over 13 percent of the population. The youngest baby boomers will have turned 50 this year and per the report, by 2030, all baby boomers will be over the age of 65 and make up 20 percent of the population.

Due to the recession, the evolution of businesses and business practices, changes in the work force and other factors, there are many concerns about this generation being unprepared for those looming retirement years.

Ellyn Terry, economic policy analysis specialist in the research department of the Atlanta Fed, reported at the beginning of the year that "In total, the number of people not in the labor force rose by 12.6 million or 16 percent from the fourth quarter of 2007 to the fourth quarter of 2013.” Per economic writer Ben Casselman, approximately 17 percent of baby boomers have been declared as retired. This means that there is still over 80 percent of the Baby Boom population who needs to be prepared for this next stage – and unfortunately, many are not.

Reports have indicated a rising trend in people opting for semi-retirement due to a limited pension or forced early retirement. A University of Michigan report shows that for those between the ages of 60 and 62, the number of semi-retired workers has gone up to 15 percent, where this number was previously at zero percent. For those between the ages of 65 and 67, the number of semi-retirees has spiked up 20 percent, more than double the percentage a mere 50 years ago. And this disturbing new trend seems to be on the rise.

To help boost the amount earned and saved for retirement, beginning 2015, the government will introduce higher 401(k) contribution limits. Says a US News Money & World Report study, “Taxpayers will be able to contribute up to $18,000 to their 401(k), 403(b), most 457 plans and the federal government's Thrift Savings Plan in 2015, which is $500 more than in 2014.”

The study also indicates that investors over 50 will be able to contribute an extra $1,000 to an IRA, which will not be eligible for an annual cost of living adjustment.

Perhaps the most significant change for 2015, though, is the development of the new retirement account called a myRA, initiated by the Obama Administration in order to assist those who earn under $191,000 a year, and who are without a workplace retirement account. The myRA is essentially a Roth Ira, with the unique distinction that it will be protected by market losses and additionally that the account is guaranteed to never go down In value.

These changes, along with other improvements set to roll out in 2015, can have a very favorable impact on one’s retirement income.

“Baby Boomers and tax payers in general need to take advantage of every opportunity provided by the government to boost retirement savings, while maximizing other viable alternatives,” says James Barkley, founder of Barkley Financial Group, a tax practice serving the Jasper, Georgia region for the past 30 years.

Adds Barkley, “when it comes to preparing for retirement, there are many things beyond one’s control. There is no control over the federal government, what the tax rate is going to be, or the stock market, which is incredibly volatile. But, what one can control, is the way a retirement account is set up, so that it isn’t considered taxable, which will leave more to enjoy during the retirement years.”

Contact Info:
Name: James Barkley, IAR
Email: Send Email
Organization: Barkley Financial Group
Phone: 770-893-4570
Website: http://www.barkleyfinancialgroup.com

Source URL: http://councilofeliteadvisors.com/liftmedia

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CONTACT ISSUER
Name: James Barkley, IAR
Email: Send Email
Organization: Barkley Financial Group
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