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PBGC Blog: Retirement Matters

If you receive a retirement benefit from PBGC, all or some of the money may be taxable. Every year, we report this amount to the IRS and send you an IRS Form 1099-R that states the amount we paid you the previous year.

We'll mail your Form 1099-R for 2012 to your address of record by Thursday, January 31, 2013. If you don't receive your form soon after January 31, 2013, you may use the options below to request a duplicate 1099-R, as early as February 1.

  1. Use our online service, MyPBA, to view and print a copy of your 1099-R tax form for the most recent tax year. 

OR

  1. Call PBGC's Customer Contact Center to request a form by mail. The number is 1-800-400-7242.

Before you call, please have your Social Security number, plan name and case number ready for the customer service representative.

'Don't Believe the Myths'

  |   December 10, 2012

Whether retirement is knocking on your door or decades away, you should have a financial plan in place to help you reach that milestone. Bloomberg Business News published an article that debunks some of the myths about retirement. As the article states, "We're living increasingly in a "yoyo" economy -- short for "you're on your own."

According to the article, here are some of the most common myths about retirement:

MYTH NO. 1: It's OK to postpone saving for retirement until other needs are taken care of.

MYTH NO. 2: Medicare will take care of almost all your health care needs.

MYTH NO. 3: You'll need far less income in retirement to maintain the same standard of living.

MYTH NO. 4: You can claim Social Security early and still get full benefits later.

MYTH NO. 5: You should rely heavily on bonds rather than stocks as you get older.

MYTH NO. 6: Any retirement target-date fund will allow you to "set it and forget it."

MYTH NO. 7: You'll be able to make up a savings shortfall by retiring later or working part-time in retirement.

Read the full article, "7 retirement planning myths debunked."

PBGC will pay retirement benefits for more than 1,300 current and future retirees of RG Steel, the nation's fourth-largest flat-rolled steel producer with steelmaking facilities located in Sparrows Point, Md.; Warren, Ohio, and Wheeling, W.Va. Additional finishing facilities are in Yorkville and Martins Ferry, Ohio.

RG Steel and its seven affiliates are liquidating in bankruptcy. PBGC has trusteed the two pension plans RG sponsored - the RG Steel Warren, LLC Hourly Employees Pension Plan ("Warren Plan") and the RG Steel Wheeling, LLC Pension Plan ("Wheeling Plan"). 

In bankruptcy, RG Steel has sold practically all of its assets.  Most of the buyers are liquidators, none of which assumed the pension plans.  PBGC initiated termination because of RG Steel's liquidation in bankruptcy and the forthcoming abandonment of the pension plans. More...

A commonly asked question is how does PBGC determine how much a retiree receives? There's no simple explanation. The short answer is it's sort of complicated.  The longer, more detailed answer is that the amount a retiree receives is dependent on a multitude of factors specified by law, one of which is the maximum guarantee limit, which is adjusted yearly.

Common Misconception: The guarantee limit is often misunderstood to be the maximum benefit PBGC can pay retirees. However, that is not the case.

In many cases retirees receive benefits from PBGC in excess of the maximum guarantee. Whether a retiree receives more than the guarantee depends on a number of factors, including:

1. What the retiree's earned benefit was before the plan terminated

2. How long they've been retired when PBGC takes over

3. The plan's funded status at termination

4. Whether any other limitations apply

FACT: According to a 2006 study, about 85% of retirees who get their pension from PBGC receive their entire earned benefit.

FACT: The guarantee is lower for those who retire early or when there is a benefit for a survivor.

FACT: The guarantee is increased for those who retire after age 65.

Find out more about the 2013 maximum insurance benefit.

Ominous clouds

Today's reality is that Americans are deeply concerned about the future of their retirement. According to a recent Pew Research survey, 4-in-10 American adults aren't as confident about their finances for retirement as they were in 2009.

The survey highlighted 35 to 44-year-olds as the age group most concerned about their retirement.

Why the concern? An NBCNEWS.COM article said Americans started to feel pessimistic about their retirement futures beginning in 2009 following the nation’s economic collapse. The gloomy outlook worsened this year.

So, the question is — are you worried about retirement?

Read the full NBCNEWS.COM article and the Pew Research survey.

There are a number of websites and online tools to help with retirement planning.  In particular, retirement calculators are one of the most useful tools in helping future retirees figure out how much to save for retirement. Although this tool, in its many variations, can be extremely helpful, very few actually provide detailed instructions on how best to use them. Fortunately, CBSNEWS.COM features Steve Vernon's tips on using retirement calculators:

  • Tip #1: What rate of return do you expect on your retirement savings?
  • Tip #2: When do you expect to retire?
  • Tip #3: How long will you live?
  • Tip #4: How much retirement income do you need?
  • Tip #5: Should you include Social Security benefits?

Read the CBSNEWS.COM full article:http://www.cbsnews.com/8301-505146_162-57494187/5-tips-for-using-retirement-calculators/.