Cypen & Cypen
OCTOBER 8, 2008
Stephen H. Cypen, Esq., Editor
On October 3, 2008 President
Bush signed into law the “Emergency Economic Stabilization
Act of 2008.” On
The entire bill can be accessed at http://www.huffingtonpost.com/2008/09/28/bailout-legislation-full_n_130063.html.
The Associated Press reports that Americans’ retirement plans have lost as much as $2 Trillion -- about 20% overall -- in the past 15 months. The upheaval that has engulfed the financial industries and sent the stock market plummeting is devastating workers’ savings, forcing people to hold off on major purchases and consider delaying their retirement, according to the Congressional Budget Office. Unlike Wall Street executives, America’s families do not have a golden parachute to fall back on. Retirement security may be one of the greatest casualties of this financial crisis. More than half the people surveyed in a recent poll said they worry they will have to work longer because the value of their retirement savings has declined. The CBO says the fear is well-founded. Public and private pension funds and employees’ private retirement savings accounts have lost some 20% overall since mid-2007. Private retirement plans may have suffered slightly more because those holdings are more heavily skewed towards stocks. A new AARP study found that because of the economic turndown, one in five workers 45 and older stopped putting money into a company-sponsored retirement account, IRA or other retirement savings account during the last year, and nearly one in four increased the number of hours worked.
The Center for Retirement Research at Boston College has released a new Issue in Brief entitled “The Decline of Career Employment.” With a contracting retirement income system and increased life expectancy, working longer has emerged as perhaps the most effective lever for improving retirement income security. More work at older ages should be entirely feasible for the bulk of the population, given that today’s workers are healthier and work is less onerous than in the past. Indeed, some indication that people might be willing to work longer comes from the fact that the century-long downward trend in the labor force participation of older men has clearly ceased, with participation rising slightly since the mid-1990s. But the changes to date fall far short of what is required to offset declining Social Security benefits and modest 401(k) balances -- an increase in the average retirement age from the current 63 to an estimated 67. Several impediments, however, stand in the way of such a response. First, perhaps 15 to 20 percent of older workers are not healthy enough to remain in the workforce that long. Second, Social Security benefits are available at age 62, and the majority of workers essentially claim benefits as soon as they become available. Third, career employment -- meaning employment with a single employer from middle age to retirement -- is no longer the norm. So if workers are to remain in the labor force into their late 60s, most will face the difficult task of finding a new job in their 50s and 60s. The following are other key findings:
Very thought provoking.
The Internal Revenue Service has announced that interest rates for the calendar quarter beginning October 1, 2008 will increase by one percentage point. The new rates are
Under the Internal Revenue Code, the rate of interest is determined on a quarterly basis. For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus three percentage points. Generally, in case of a corporation, the underpayment rate is the federal short-term rate plus three percentage points and the overpayment rate is the federal short-term rate plus two percentage points. The rate for large corporate underpayments is the federal short-term rate plus five percentage points. The rate on the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the federal short-term rate plus one-half (.5) of a percentage point. The interest rates are computed from the federal short-term rate based on daily compounding determined during July 2008. IR-2008-111 (October 1, 2008).
There he was, naked, teetering on a building ledge and jabbing at police with an 8-foot-long fluorescent bulb as a crowd gathered below. Lt. Michael Pigott of the New York Police Department responded by ordering an officer to fire a stun gun at the man, who froze and plunged headfirst to his death, in a scene captured on amateur video and replayed frequently on the internet. The lieutenant was remorseful and distraught. He apologized, and sought the family’s forgiveness. Then he went to his unit’s headquarters and fatally shot himself with another officer’s weapon, just hours before the family laid the victim to rest. Lt. Pigott was stripped of his gun and badge, and assigned to a job within the department’s motor vehicle fleet -- a significant demotion for a 21-year veteran, who had been assigned to the elite Emergency Services Unit. One other thing: the married father of three shot himself in the head on his 46th birthday. Tragedy of tragedies.
There are no new sins; the old ones just get more publicity.
“There are no menial jobs, only menial attitudes.” William John Bennett
Inasmuch as tomorrow is Yom Kippur (the Day of Atonement), we will not be working. Thus, today’s issue, somewhat abbreviated, is being delivered today. We wish a Healthy and Happy New Year to all of our Jewish readers.
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