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Understanding Your Eligibility Under the Social Security Fairness Act

By |2025-05-20T12:43:07-07:00May 20, 2025|Categories: Retirement Planning|Tags: |0 Comments

Here at SWC, we love to hear from clients who received big chunks of money they weren’t expecting, especially when it’s thanks to the Social Security Fairness Act. Usually, they have mixed emotions because they’re overjoyed by the windfall profit and simultaneously concerned about the potential tax implications.

Emotions aren’t mixed on our side. That’s because we’re pleased with our clients’ good fortune and we’re eager to help them keep more of their money through savvy tax planning.

Take a phone call we received recently from one of our clients, a recently retired schoolteacher over the age of 65. She told us she received a letter from the Social Security Administration (SSA) informing her that she was going to start receiving unexpected benefits, thanks to the recent passage of the Social Security Fairness Act. She had no clue about her eligibility and was so excited to find out she was due a retroactive payment from the SSA for 2024!

Social Security Fairness Act graphic

Our client was fortunate that the SSA was able to confirm her eligibility and get in touch with her. Not everyone who’s eligible will be so lucky. The SSA openly admits it doesn’t know how to get in touch with everyone who’s now eligible for benefits and unaware of their eligibility.

If you’re retired or close to retirement age, here’s what you need to know about the Social Security Fairness Act.

What Is the Social Security Fairness Act?

The Social Security Fairness Act, signed into law on Jan. 5, 2025, is legislation that repeals two provisions that reduced or eliminated the Social Security benefits for more than 3.2 million people who receive a pension based on work that was not covered by Social Security (a “non-covered pension”) because they did not pay Social Security taxes.

The Act addresses the following two provisions: Continue reading… Continue reading… Continue reading…

Complying with CalSavers — California’s Retirement Savings Mandate for Employers

By |2023-11-03T14:51:27-07:00November 3, 2023|Categories: Retirement Planning|Tags: |0 Comments

As Southern California’s tax planning and financial strategies advisory firm for entrepreneurs and small business owners, we here at SWC play a unique role in helping our clients understand and comply with California’s tax laws and related regulations.

Small-business owners rarely have lawyers or lobbyists to represent them and keep them informed. Many small business owners aren’t even connected with resources like their local Chamber of Commerce. That’s where we come in. We are trusted tax professionals that our clients can turn to for information, guidance, and support.

And that includes notifications and updates related to CalSavers and California’s retirement savings mandate.

What Is CalSavers?

CalSavers Graphic

CalSavers is California’s retirement savings plan for workers whose employers don’t offer a workplace retirement plan, and for self-employed individuals and others who want to save extra toward retirement. Savers contribute to a Roth IRA (individual retirement account) that belongs to them but is administered by the state.

For a more detailed CalSavers primer, including how to register your business, please see our previous post, “Getting Up to Speed on CalSavers: California’s State-administered Retirement Plan.”

Designed to be easy for employers and simple for employees, CalSavers is professionally managed by private sector financial firms with oversight from a public board chaired by the State Treasurer. There are no fees for employers, and employees manage their accounts directly with CalSavers.

Employers that don’t offer their own plan must register with CalSavers by a specified deadline and facilitate their employee’s access to the program. And if they don’t?  Well, that’s what the rest of this post is all about.

Is Your Business Required to Participate?

In 2023, the employer mandate was expanded to include employers with one (1) or more employees. Your business is exempt from participation in CalSavers in only three cases: Continue reading… Continue reading… Continue reading…

Deciding When to Start Drawing Your Social Security Retirement Benefits

By |2022-02-28T14:44:50-08:00February 28, 2022|Categories: Retirement Planning|Tags: , , , , |0 Comments

If you or a loved one’s 62nd birthday is just around the bend, first of all, happy birthday! In addition to all the other gifts you or your loved one are about to receive on your special day, perhaps the best present of all is that you’ll be eligible to start cashing in on your social security retirement benefits — assuming, of course, that you paid into social security during your working years.

However, just because you’re eligible to start receiving social security checks at the age of 62 doesn’t mean you should. The longer you wait, the bigger your checks. You can start receiving checks when you hit that 62-year milestone; at the age of 65 (the traditional age for retirement); or at 67, which is full retirement age (FRA). You can even delay benefits until as late as age 70 (to receive the maximum benefit) or start collecting benefits anytime along that timespan.

my Social Security Login Screen

Starting benefits as soon as possible may seem like a good idea, and it may be in the right situation. The catch is, your benefits will be reduced by as much as 30 percent if you don’t wait until your full retirement age, which is likely around 67 years and change.

The bottom line is that each person’s situation is unique. What’s right for one, may not be the best choice for another. So, what should you do? That’s where we come in. The team here at SWC can sit down with you to analyze your situation and help you decide what’s best for you and your family.

In this post, I explain your options and some of the main factors to consider when deciding the best time to start collecting your social security retirement benefits.

Determining Your Eligibility

First things first. To be eligible to receive social security benefits, you must meet the following criteria: Continue reading… Continue reading… Continue reading…

Getting Up to Speed on CalSavers: California’s State-administered Retirement Plan

By |2021-04-21T13:06:54-07:00April 21, 2021|Categories: Retirement Planning|Tags: , |0 Comments

Good news for those of our clients who are employers: California’s new retirement savings plan, CalSavers, may be able to offer your employees the opportunity to save for the future without much effort — and at no cost to you or your business.

CalSavers is available to California workers whose employers don’t offer a workplace retirement plan, along with self-employed individuals and others who want to save extra toward retirement. Savers contribute to a Roth IRA (individual retirement account) that belongs to them but is administered by the state. Employers that don’t offer their own plan simply register with CalSavers by the specified deadline and facilitate their employee’s access to the program.

The program benefits both employers and savers:

Benefits for Employers

  • Quick and easy registration
  • Limited responsibilities
  • No administration
  • No employer fees
  • No fiduciary responsibility
 Benefits for Savers

  • Automatic or personalized investment options
  • Freedom to opt in and opt out and change the contribution percentage at any time
  • Simple, low-fee investments
  • Portability — the account remains with the employee through any job changes

 

Navigating CalSavers for Employers

All California employers with more than five (5) employees must register for CalSavers by the specified deadline regardless of whether they are exempt from the program. (See below for all associated deadlines.)

Deciding whether you must register

Employers that have at least five (5) employees and don’t already offer a workplace retirement plan can register for CalSavers. Employers that have five or more (5-plus) employees must register, regardless of whether or not they offer their own retirement plan:

  • If you already offer a retirement plan, you’re not required to participate in the program, but you must register as “exempt.”
  • If your business is a nonprofit, you must register like other businesses, unless it is a religious organization, in which case registration is not required.
  • Even if all your employees choose to opt out of CalSavers, you must register if you have at least five employees.

Note: If you’re not required to register and you receive a notice from the state informing you of the need to register, you must respond to the notification to avoid any penalty.

Meeting the registration deadline

If you’re required to register, you must do so by Continue reading… Continue reading… Continue reading…

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