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UPS Retirement Topics
UPS subsidizing non ups pensions
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<blockquote data-quote="JonFrum" data-source="post: 137890"><p>An unfortunate feature of the Internal Revenue Code is that a "participant" in a pension plan at work loses his right to fully deduct contributions to his personal Individual Retirement Account (IRA). This loss of full deductibility is true, even if the employee is not yet vested! So every UPSer looses full deductibility for the first four or five years or so, and usually he leaves UPS and is replaced by another UPSer who fails to vest, and he is replaced by another and so on until someone actually stays long enough to get vested. The inability of UPS to hire and retain full-time, and especially part-time, employees is not only hurting these employee's ability to earn a pension, but also their ability to provide for their retirement through personal savings. IRS limits say you may contribute up to $4,000 in 2006 and 2007. If you are at least 50 years old, you are eligible for an additional "catch-up" contribution up to $1,000 in 2006 and 2007. The same limits apply to both a traditional IRA and a Roth IRA.</p><p></p><p>You can open a 401(k) account, unfortunately the formula that determines how much you can contribute is directly tied to how much you earn. Someone earning relatively little, like most part-timers, and even new full-timers in progression, can't take full advantage of the 401(k) tax deferral feature. In 2006 the maximum contribution is $15,000, which is 25% of your year's pay. Thus, anyone making less than $60,000 can't contribute the full amount and can't take the full tax deferral. Anyone 50 years of age or older can contribute an additional "catch up" contribution of up to 10% or $5,000. In 2007 the regular contribution limit increases to $15,500, but the "catch up" stays at $5,000. So you would have to make $62,000 to take maximum advantage. </p><p></p><p>Social Security's Early Retirement age stays at 62, but the Full Retirement age of 65 has been increased for everyone born after 1937. Those born in 1943 and thereafter must wait at least until 66, and those born in 1960 and thereafter must wait until age 67!</p><p>You can look up you're Full Social Security retirement age on this chart:</p><p><a href="http://www.ssa.gov/retirechartred.htm" target="_blank">Social Security Online-Find Your Retirement Age</a></p></blockquote><p></p>
[QUOTE="JonFrum, post: 137890"] An unfortunate feature of the Internal Revenue Code is that a "participant" in a pension plan at work loses his right to fully deduct contributions to his personal Individual Retirement Account (IRA). This loss of full deductibility is true, even if the employee is not yet vested! So every UPSer looses full deductibility for the first four or five years or so, and usually he leaves UPS and is replaced by another UPSer who fails to vest, and he is replaced by another and so on until someone actually stays long enough to get vested. The inability of UPS to hire and retain full-time, and especially part-time, employees is not only hurting these employee's ability to earn a pension, but also their ability to provide for their retirement through personal savings. IRS limits say you may contribute up to $4,000 in 2006 and 2007. If you are at least 50 years old, you are eligible for an additional "catch-up" contribution up to $1,000 in 2006 and 2007. The same limits apply to both a traditional IRA and a Roth IRA. You can open a 401(k) account, unfortunately the formula that determines how much you can contribute is directly tied to how much you earn. Someone earning relatively little, like most part-timers, and even new full-timers in progression, can't take full advantage of the 401(k) tax deferral feature. In 2006 the maximum contribution is $15,000, which is 25% of your year's pay. Thus, anyone making less than $60,000 can't contribute the full amount and can't take the full tax deferral. Anyone 50 years of age or older can contribute an additional "catch up" contribution of up to 10% or $5,000. In 2007 the regular contribution limit increases to $15,500, but the "catch up" stays at $5,000. So you would have to make $62,000 to take maximum advantage. Social Security's Early Retirement age stays at 62, but the Full Retirement age of 65 has been increased for everyone born after 1937. Those born in 1943 and thereafter must wait at least until 66, and those born in 1960 and thereafter must wait until age 67! You can look up you're Full Social Security retirement age on this chart: [URL='http://www.ssa.gov/retirechartred.htm']Social Security Online-Find Your Retirement Age[/URL] [/QUOTE]
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