April 2021
23Apr

The Taxation of Pensions

By Robert Holzmann, John Piggott Policy makers and academic researchers have been preoccupied in recent decades with the design of pension schemes and effective pension system reform. Relatively little attention has been given to the taxation of pensions and, more broadly, the provision of retirement income. In this book, experts from a range of countries explore the interconnection. Their contributions are especially timely, given recent demographic and political developments including population aging that lengthens the time between contribution payment and...

April 23, 2021
Books, Pension design, ,
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15Apr

Do Required Minimum Distribution 401(K) Rules Matter, and for Whom? Insights from a Lifecycle Model

By Vanya Horneff, Raimond Maurer, Olivia S. Mitchell Tax-qualified vehicles helped U.S. private-sector workers accumulate $25Tr in retirement assets. An often-overlooked important institutional feature shaping decumulations from these retirement plans is the “Required Minimum Distribution” (RMD) regulation, requiring retirees to withdraw a minimum fraction from their retirement accounts or pay excise taxes on withdrawal shortfalls. Our calibrated lifecycle model measures the impact of RMD rules on financial behavior of heterogeneous households during their worklives and retirement. We show that proposed...

April 15, 2021
Articles, Pension design, Savings, ,
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March 2021
27Mar

Retirees who pay the most in taxes make only $36,000 a year on average, study finds

Retirees who have the most money pay the most in taxes, according to a recent working paper, but they’re not necessarily rich. “Most of the tax burden is carried by the top quintile of households,” Anqi Chen, co-author and assistant director of savings research at the Center for Retirement Research at Boston College, told Yahoo Money. But “it's important to keep in mind that when we think about the top quintile of households — the top 20% — they're not...

March 27, 2021
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25Mar

How Much Taxes Will Retirees Owe on Their Retirement Income?

By Anqi Chen, Alicia H. Munnell To evaluate their retirement resources, households approaching retirement will examine their Social Security statements, defined benefit pensions, defined contribution balances, and other financial assets. However, many households may forget that not all of these resources belong to them; they will need to pay some portion to federal and state government in taxes. It is unclear, however, just how large the tax burden is for the typical retired household and for households with different income...

March 25, 2021
Articles, Pension design, , ,
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24Mar

Sweden wants to tax pensioners in Portugal

Swedish Parliament is set to vote on unilaterally ending an agreement with Portugal to not tax citizens receiving their pensioners here Following in the footsteps of Finland in 2018, Stockholm now also wants to see its expat pensioners in Portugal taxed as they would be in their home countries. Portugal recently changed its non-habitual resident regime to enforce a blanket ten percent tax on foreign pensions, but Sweden argues this is inadequate and not in accordance with an agreement signed with...

March 24, 2021
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19Mar

IRS Pension and Annuity Income

By IRS This publication discusses the tax treatment of distributions you receive from pension and annuity plans and also shows you how to report the income on your federal income tax return. How these distributions are taxed depends on whether they are periodic payments (amounts received as an annuity) that are paid at regular intervals over several years or nonperiodic payments (amounts not received as an annuity). Get the book here

March 19, 2021
Books, Regulation, , ,
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19Mar

The Welfare and Labor Market Effects of Mandatory Pension Savings: Evidence from the Israeli Case

By Adi Brender Many studies show that workers make poor decisions about pension savings. Policy responses to these failures include social security retirement arrangements, tax benefits for pension savings and, in some countries, also mandatory private savings towards retirement. This study examines the response of Israeli employees to the introduction of mandatory pension contributions, and the medium-term labor market effects of the arrangement, using a randomly selected panel of 300,000 employees. The first year of the arrangement, when enforcement was...

March 19, 2021
Adequacy, Articles, Labor Market, Savings, , ,
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09Mar

UK. Pension challenges women face will impact on their retirement

By Jessica List March 8 marks International Women’s Day and celebrates the social, economic, cultural and political achievements of women. The campaign theme for this year is ‘Choose To Challenge’. The reason this has been chosen is that the organisers recognise that a challenged world is an alert world, and from challenge comes change. It is amazing to think that International Women’s Day is over 100 years old, the first gathering was in 1911. Much has changed over this time but according...

March 9, 2021
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08Mar

Warning lights flickering for South Africa’s wealthy taxpayers

“We owe a lot of people a lot of money.” That blunt, ominous statement by finance minister Tito Mboweni in his 2021 budget speech shows the deep financial hole the South African economy is really in – and warning lights are starting to flicker for South Africa’s wealthy taxpayers. This is according to Tim Mertens, chairman of Sovereign Trust SA, who said that a key takeaway from the budget was the staggering R213 billion under-collection of tax in 2021 compared to...

March 8, 2021
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February 2021
19Feb

Income and Saving Responses to Tax Incentives for Private Retirement Savings

By Marc K. Chan, Todd Morris, Cain Polidano, Ha Vu Many governments offer tax concessions for retirement contributions to boost retirement savings and alleviate the fiscal pressures of population aging. In this paper, we show that income responses are crucial for understanding these impacts. Using tax-register data, we study large changes in caps on tax-favored contributions to individual retirement accounts in Australia. We find that higher caps increase retirement contributions considerably, with around two-thirds of this response financed by increases...

February 19, 2021
Articles, Savings, , ,
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