Definition: A company’s articles of incorporation are a legal document that establishes a corporation and provides crucial information to the government that allows it to run a business.

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What are Articles of Incorporation

The articles of incorporation must be filed to the appropriate government agency when creating a new corporation. In the articles of incorporation, you supply relevant information about the firm. This information includes the company’s name, address, the reason for formation, and the name and address of the registered agent. The registered agent is the first point of contact for any issues concerning the company. When a corporation delivers the document, it becomes a legal entity, and everything in the articles becomes public. You may also be needed to file corporate articles of incorporation, which define how your firm will operate in your state.

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What is the purpose of the articles of incorporation?

A corporation is a sort of company organization that legally separates an economic entity from its owners. A corporation is a legal entity with the same rights as people. Corporations can borrow money, enter into contracts, and run business. Because of the legal distinction between the legal entity and the owners, the owners are normally not liable for the corporation’s conduct. If someone sues a corporation, they are not suing the individual shareholders.

When a company decides to register (and thereby become a corporation), it must take specific steps. The filing of articles of incorporation in the state where they manage business is one of these operations.

The articles of incorporation notify the government and the general public about the firm. The articles of incorporation are critical since the firm is not formally a corporation until they are registered. Without these articles, the firm does not have the rights and protections that companies have. Among these protections is a legal separation between the corporation and its owners.

Assume a consumer files a lawsuit against a corporation. When a firm is incorporated, the owners and workers are typically not held liable for the lawsuits. However, if they have not filed their articles of incorporation, the business owners may be held liable.

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What is included in the articles of incorporation?

Although the rules for what to include in your articles of incorporation vary significantly by state, there is certain essential information that most states require.

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The corporation’s name

Because a company is a legal entity independent of its owners, it should have a distinct name. When selecting a name for your firm, be certain that no one else has picked this company name in your state, and that there are no trademarks on this name. If you select a name whose trademark is currently registered by somebody else, you may face future lawsuits. Furthermore, if you pick a name that is already in use in your state, the government may reject the foundation’s agreement. To signify the status of a company, most corporate names must include “Inc.”

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The name and address of the corporation’s registered agent

The primary point of contact for the corporation is the registered agent. If someone has to transmit papers to a corporation, such as for a lawsuit, they would do this through a registered agent. A registered agent might be a company’s owner or employee, or it can be an individual, such as a lawyer employed by a business.

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The corporation’s mission

In many states, the mission of the company must be mentioned in the articles of incorporation. Typically, the mission is not particularly specific. Apple’s articles of incorporation, for example, state that the company’s purpose is “to participate in any lawful action or activity for which a corporation may be organized under the General Corporations Act of California, with the exception of banking, trust company business or practice. a profession authorized for inclusion in the California Corporate Code.”

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The Board of Directors’ name and address

If you are forming a corporation, you need also form a board of directors. The names and addresses of these directors must then be specified in the articles of incorporation.

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The duration of a corporation’s existence

The length of a corporation’s existence is the period of time it will be operational. A company might exist for a limited time or indefinitely. Most companies have an infinite lifetime, which means they will continue constantly.

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Type of corporate structure

There are several forms of companies. An organization, for example, can apply as a for-profit company or as a non-profit corporation.

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Shareholder information

Corporations have shares, which is one of the most significant distinctions between them and other sorts of businesses. One of the things an organization must declare when registering its articles of incorporation is the number of shares it will issue. They can also indicate the rights and advantages of the owner of the share of shares. A company may also incorporate limits on share transfers, such as a declaration that no shares may be transferred without the permission of the board of directors.

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The founder’s name, address, and signature

The individual who registers the articles of incorporation is known as the founder. This person might be the company’s owner, although it is not required. There might possibly be multiple founders. The founder must submit his name and address and sign the founding agreement.

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Shareholders’ preferred rights

A corporation’s articles of incorporation may include pre-emptive rights. These pre-emptive rights ensure that if the firm issues additional shares, present owners will have first dibs on them based on their current portion of authorized capital. Shareholders may decline this privilege, allowing others to purchase their shares.

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The process of changing or repealing the articles of incorporation

When an organization registers its articles of incorporation, it must also create its own corporate articles of incorporation. In the articles, the company can indicate the steps they must take to change or cancel their articles of association.

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The financial year of the corporation

The fiscal year is not necessarily the same as the calendar year. Some businesses may pick another 12-month fiscal year rather than operating from January 1 to December 31.

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Limitations on liability and compensation for executives, directors, employees, and agents

Damages and limitation of responsibility are two portions of the articles of incorporation that indicate who will not be held liable for the corporation’s and its opponents’ conduct. The primary objective of these elements is to pay for certain people’ damages (that is, to safeguard against responsibility). These components shield owners and workers against litigation caused by the company’s or their own behaviors while on the job.

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How to file articles of incorporation?

Consult the government of your state to file the articles of incorporation. This is common at the Secretary of State’s office. Most states provide templates for articles of incorporation, so you don’t have to start from zero. Instead, simply fill in the gaps in the template. Some states may refer to these items as corporation statutes instead.

You will almost certainly have to pay a registration fee when you register the articles of incorporation. According to your state, you may also require corporate articles of incorporation, which explain the individual parties’ roles and describe how your business will be governed. It is not always necessary to submit these articles of incorporation to the state. All you need is to have them in.

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Does the LLC have articles of incorporation?

A limited liability company (LLC), like a corporation, is a corporate structure that allows the proprietor to legally separate from his firm. This separation allows them to minimize their own liability.

LLCs differ from corporations in several respects, including ownership structure. The corporation owns stock in the firm. By purchasing stock in the firm, someone gains ownership. So, if you acquire Apple stock, you become a co-owner of Apple.

Instead of having multiple shareholders, an LLC has only one owner (or several owners if the LLC is a partnership).

Because corporations and LLCs are structured differently, they must submit different documentation for formal business registration.

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Definition: Asset management is a service provided by investment companies and banks to manage individual and corporate assets in accordance with investment policy.

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What is asset management?

Asset management is a situation where you assign a financial institution, such as an investment company or bank, to manage your investments. The main goals of transferring your assets to others are to gain from expert experience, create wealth, maximize income and protect capital.

Asset managers can be specialists in certain types of capital, and risk resilience and your goals will help determine the strategies on which they will work. Asset management companies can provide investment services and products that you may not have access to as a regular investor. Investment banking and wealth management services are closely related to asset management. If wealth management can involve asset management, then investment banking services help individuals and organizations raise capital.

The Securities and Exchange Commission (SEC) strictly regulates asset management. This regulator has a full list of laws, rules and regulations that asset managers must follow. For example, there are special laws that prohibit sharing information with investors that misleads investors or is simply untrue. In violation of any of the laws, the SEC may bring civil and criminal cases against asset managers or their companies.

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What is an asset manager?

Asset managers provide investment management services by investing in and controlling your personal or business assets.

However, even with a professional portfolio manager, it is impossible to guarantee that your investment will increase in price. The performance of your finances can be affected by the health of the economy, as well as the skill of the asset manager and the commissions paid by you to the asset manager.

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How do asset management companies work?

When you need help managing your fortune, you can contact a bank or investment company to see if asset management is one of the services available.

An asset management company can control the following types of assets:

• Actions
• Bonds
• Mutual funds
• Cash
• Real estate
• Major Limited Partnerships
• Private equity investment

As a result of cooperation with you, the company will develop an individual approach to managing your personal or business assets. Perhaps she will ask you questions about your income needs, tax situation and your expectations for the future. In addition, your moral and ethical values can also play a role in determining how an asset management firm will handle your portfolio.

So, if you are a supporter of the principles of social responsibility and take care of the environment, your asset manager can direct capital to investments that match your ideals.

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What is the difference between asset management and investment banking?

Asset management can direct investments for individuals or corporations, while investment banking focuses solely on helping individuals and companies raise capital. In addition, investment bankers can provide financial advice to assist in decision-making and act as an intermediary to connect securities issuers with potential investors when companies want to go public.

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What is asset management and wealth management?

With modest net worth, you can benefit from asset management. If you have a high level of well-being, there may be a question of how to manage your assets in the long term. That’s where wealth management comes in.

While it may include some aspects of asset management, wealth management is aimed specifically at people with high levels of wealth. It consists of drawing up individual plans and tax strategies for better risk management.

Qualifying for services typically requires investing between $250,000 and $500,000.

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How much does asset management cost?

Like most things in life, asset management services are not free. Depending on the supplier, you will be able to pay a fixed fee or receive a commission.

Asset management companies can also have different fee structures for different types of accounts or services. Most often, an hourly fee is charged for financial advice. In the case of a full review of your portfolio or an annual assessment of your financial plan, you can pay a fixed rate.

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Definition: An insurance certificate is a document that is issued by your insurance company to prove that you are insured and provides important information about your policy.

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Why do I need an insurance certificate?

By hiring a supplier or contractor, people tend to want to know that the company has insurance. It is important to them that they will not be liable for damage caused by the supplier or contractor. This is where the insurance certificate (COI) comes in.

• The purpose of the COI is to confirm to potential and existing customers that your company has the required liability coverage. The certificate briefly indicates who the policyholder is, the insurer’s name, type of coverage, coverage limits and more.
• In the event that you own a company, an insurance certificate can help persuade customers to work with you, not competitors, or guarantee them that you are complying.

If you are a private person who employs a company, the insurance certificate gives you confidence that you will not have to be responsible for the damage caused by them.

Let’s say a food provider is hired for a wedding. It serves dishes made with expired ingredients, and as a result, several guests become ill and need medical attention. Least of all, you would like to be in a situation where, due to a supplier error, you will have to pay medical bills.

By making sure a service provider has appropriate liability insurance in advance, you can be sure their insurer will cover the costs instead of you. Asking about having an insurance certificate is a good idea if you hire a company in a situation where damage can be done. If a company cannot provide an insurance certificate, it may have trouble getting contracts.

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What does a COI include?

There is no single form for insurance certificates. One common is the Association for Cooperative Operations Research and Development (ACORD) format, which sets standards for the global insurance industry. It includes:

Date: When the insurance company issued the insurance certificate.

Producer: The name of the insurance broker or agent who issued it. This section also contains the address and contact details of the insurance company.

Insured: This section contains the name and address of the insured. It must match the name specified by the company.

Insurers affording coverage: This is a list of insurance companies issuing policies.

Insurance Coverage: This section briefly lists all insurance policies available to the company. These may include liability insurance, employee compensation insurance, auto insurance or umbrella insurance. It also lists policy numbers, effective dates, and expiration dates.

Coverage limits: These are the maximum amounts that the insurance company will pay to cover any liabilities. Limits may apply to each case, to specific losses (such as medical expenses or personal injury per person), or to the policy as a whole.

Description of operations/places/vehicles: This section is kind of comprehensive. It can include any important information about the company’s activities, such as specific jobs or vehicles. An additional policyholder may also be listed here (see below for more on this).

Certificate holder: This is the person to whom the insurance company or agent issued the form.

Cancellation: The insurance certificate indicates the expiration date. It also states that if the policyholder gives up insurance earlier, the company will notify the holder of the certificate.

Signature: This is the signature of the authorized representative who issued the certificate.

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How can I get an insurance certificate?

A business owner must carry an insurance certificate to show it to potential customers. You can get this form by contacting your insurance company.

However, people who hire contractors and other firms often want the insurance company to issue a COI directly to them. Obtaining a COI directly from the insurance company ensures that the contractor has not provided a forged document. The insurance agent is usually the one who issues the COI.

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What are the COI practices?

By asking a contractor or supplier to provide an insurance certificate, you should review this document to ensure that you have the coverage you need. Here are a few rules that you need to adhere to when familiarizing yourself with the form:

1. Make sure that the business you are hiring matches the company name on the certificate.

2. Check insurer ratings: Check the rating of each insurer listed by AM Best, a credit assessment company in the insurance industry, to make sure the insurer can be good for their money.

3. Check the validity dates. If the insurance policy expires while you are working with the company, you can make changes to your contract and require the company to provide an updated certificate 30 days before the expiration of the current certificate.

4. Make sure your company has the appropriate coverage.

5. Make sure the policy limits are sufficient. Make sure insurance limits are high enough to cover any liabilities that may arise.

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Definition: Present value (PV) is the idea that money is worth more today than in the future.

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What is present value?

Present value (PV) is the value of the future cash amount in today’s dollars, calculated using a predetermined rate of return (discount rate). In other words, if you get $500 today, it costs more than getting the same $500 after five years. Investors and businesses typically use PVs when assessing the rate of return on investments or projects.

Investments with a higher discount rate will have a lower present value, while investments with a lower discount rate will have a higher PV. Understanding the discount rate is crucial when trying to determine the current or future value of a cash amount or potential cash flow.

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Why do I need a PV?

The current value is vital for several different reasons. First, it will help you understand how much the future amount of money in today’s dollars will cost, based on the discount rate chosen. This is important when you calculate how much you may need to invest today to reach the target amount in the future given the expected rate of return – financial advisers often make similar calculations when planning for retirement.

You can also use PV to calculate the future value of your cash flows. If you know what you have today and you have a reasonable idea of the expected rate of return, then you can calculate the future value of your money. For example, if you have $ 10,000 that you invest over five years with an annual return of 5%, you can calculate the expected future value of $ 12,762,82. (Future returns are never guaranteed; all investments involve risk.)

In addition, companies and investors often use present value as a basis for calculating net present value, which is an estimate of the present value of all future cash flows (both inbound and outbound). This gives them the opportunity to evaluate and compare different investment opportunities.

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PV vs. FV

Present value and future value are different sides of one coin, and you need each to calculate the other – in addition to the discount rate.

The present value tells us that $1 today will be worth more than $1 tomorrow. Why? In general, inflation will lead to a decrease in the value of your money over time. This means that all the money you have today will decrease by the amount of inflation annually, so that in the future it will cost less than today.

You also need to consider the temporary value of the money. This is another way to say that money is worth more today than the same amount of money in the future because of the potential return on it. For example, suppose that today you have $10,000, and you invest it for five years with a return of 5%. In five years, you’ll have $12,763. Thus, the temporary value of money makes $10,000 more valuable today than $10,000 in the future.

Future value is the value of an asset in the future based on a certain rate of return (discount rate). Again, it’s just the downside of PV. For example, suppose today you have $1,000 (present value) and invest it over five years (number of periods) at 5% APR (discount rate). This gives you a future value of $1.276.

There are four main elements to the equation: present value, future value, number of periods, and discount rate. You always need the discount rate and the number of periods, and then use the PV to determine the FV or vice versa.

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How to calculate PV?

The formula for PV is as follows:

PV = FV/(1+r)^n

Each character means the following:

PV = present value in today’s money, FV = projected future value of money, r = expected rate of return, interest rate or inflation rate (aka discount rate), n = number of periods.

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Let’s say in 5 years you want to get $15,000 for a trip to Hawaii. This is the future cash flow you want to have. You assume you could get a rate of return of 5%. How much money do you need to invest in today’s (PV) to reach a future value of $15,000?

PV = $15,000/( 1 + 5%) ^5 or $11.753

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Definition: Supply chain management governs the business operations and logistics required for the most effective product creation and delivery to the final consumer.

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What is Supply Chain Management?

Supply chain management (SCM) encompasses the networks required to manufacture a product as well as distribute it to the final consumer.

It organizes the supply chain activities and logistics required to source supplies, manufacture, transport, and deliver the product to the consumer or a retail store where the customer may purchase it.

The primary purpose of supply chain management is to meet consumer demand by delivering the correct product at the right time and at the lowest possible cost.

The complexity of supply chains vary based on the company’s aims, the types of goods it produces, and the market demand for them. Online shop supply chains may prioritize delivery speed, whereas luxury goods supply chains may prioritize reliability and risk management.

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Assume a huge luxury accessories firm in the United States creates handbags and purses. The supply chain includes every stage of product production: where does the firm get its resources – leather, precious stones, luxury fabrics? And can these suppliers satisfy the company’s requirements on time? This company’s supply chain management will improve if it moves to a leather supplier that permits it to speed up production and save prices. An improvement in supply chain management can increase a company’s profitability, benefit consumers, or both.

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Why is Supply Chain Management important?

The ultimate purpose of supply chain management is to satisfy the demands of the client in the most efficient way. An effective supply chain enables you to deliver the finished product in the required quantity, quality, and on schedule while spending the least amount of money.

Failures in the supply chain not only result in a loss of money in overall production costs, but also prevent the firm from meeting customer demand, which has a direct impact on the company’s profit.

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How does supply chain management work?

The complexity of supply chain processes varies. They can be worldwide, including several supply chains, or in-house, with little or no outsourcing.

Along the supply chain, tangible commodities go to the consumer. The cash flow is shifting in the opposite way, from the corporation to its suppliers. And the flow of information is bidirectional. Supply chain management also handles the return of undesired or faulty items from customers to the enterprise.

In different market categories, supply chains have varied demand management. The qualities of the product and market needs influence how products are selected, manufactured, delivered, and orders are fulfilled. Markets that have consistent customer demand and need regular inventory management, such as grocery, necessitate strong partnerships with suppliers that are always reacting to consumer demand.

Luxury products with variable demand from mass customers, such as luxury watches, may have supply chains that are more concerned with risk management and the quality of individual orders than with inventory and delivery timeliness.

Efficient supply chain management entails balancing cost, quality, speed, and flexibility in response to market demand characteristics.

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Supply Chain Steps

Although the intricacy of supply chain management varies, the overall order of the processes it handles is consistent. A plan for supply chain management has been established. The supplier purchases raw materials or components for goods and delivers them to the maker. The manufacturer creates goods. The items are subsequently kept and shipped to a wholesaler or retailer, where the buyer finally purchases them.

The components of supply chain management may be classified into five broad groups.

• Planning operations: Creating a supply chain management strategy
• Procurement and supplier search: Acquiring raw materials and components required for product manufacturing
• Conversion: The procedure for turning raw materials and pieces into a completed product.
• Logistics:The coordination of all physical materials, goods, and information from beginning to end of the supply chain.
• Reverse logistics: The process of managing the transfer and disposal of returned products.

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The field of supply chain management is large and complex. Depending on the firm, goods, and market, supply chain management may also involve (but is not limited to) the management of some or all of the following functions:

• Creation of a placement plan near the source of resources and components required for manufacturing
• Product Design: Research & Development
• Material inventory: receiving and processing of raw materials based on cost and availability
• Robotics: Used in both manufacturing and warehousing.
• Transportation management: Supervision of both internal and external transportation and delivery
• Inventory management: Management of supply and demand
• Alliances strategic: between suppliers and/or other service providers
• Invoicing: Vendors, service providers, and consumers.
• Information technology: Information system management
• ERP (Enterprise Resource Planning): Management of business activities in real time using supply chain management software
• Risk management: Entails dealing with potential supply chain disruptions such as outdated technologies and changing government policies.
• Recycling: The reuse and/or disposal of returned goods.
• After-sales Service: Customer Support
• Global issues: Include taxes and tariffs, as well as politics and commerce.

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Logistics VS. supply chain management

Logistics and supply chain management are different but interconnected concepts.

Logistics is a crucial component of supply chain management. This involves overseeing operations and coordinating the movement of goods and information along the supply chain.

Supply chain management includes logistics as well as the actual conversion of raw materials into goods through production planning, material procurement, and product manufacture.

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Definition: OASDI stands for Old-Age, Survivors, and Disability Insurance, which is the official name of the Social Security program in the United States.

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What is OASDI?

When people retire, become disabled, or die, their family income decreases. Old-Age, Survivors and Disability Insurance (OASDI) was designed to support families when such situations arise. The program provides monthly benefits to former workers, as well as their spouses and children, to partially replace lost income. OASDI is funded by payroll taxes under the Federal Insurance Contributions Act and the Self-Employment Contributions Act.

Virtually everyone who earns income contributes to the OASDI program through their taxes, and those who qualify by age or disability (or surviving family members) may receive funds from the program. The amount a person contributes to OASDI during their lifetime helps determine how much they can receive in the future.

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What are OASDI taxes?

The OASDI program is funded by payroll taxes paid by employees, employers, and the self-employed. The OASDI tax starting in 2022 is 6.2%. The tax only applies to the first $147,000 of your income, which means that the maximum contribution an employee may be required to make will be $9,114.00 in 2022 (in 2023, the tax will apply to the first $160,200 of your income, which means that the maximum contribution will be $9,932.40). Employers are required to match employee contributions. So for every dollar you contribute, your employer also gets a dollar each.

The tax works a little differently for those who are self-employed. These individuals are both the employer and the employee in the equation, so they must pay both parts of the OASDI tax.

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How are OASDI benefits calculated?

Old-Age, Survivors and Disability Insurance (OASDI) benefits are calculated based on a person’s 35 highest paying years of service. The Social Security Administration determines how much that amount would be worth in today’s dollars, then uses a formula that takes into account when the person plans to receive benefits and other factors.

There is a limit on how much money a retiree can receive in Social Security benefits. For a person applying for benefits at age 62 in 2022, the maximum monthly benefit is $2,364. For someone who applies for benefits at full retirement age in 2022 (age 66 for those born between 1943 and 1954), the maximum monthly benefit is $3,345. For a claimant at age 70, the maximum monthly benefit is $4,194. Keep in mind that no one guarantees this amount by any means. In fact, the average monthly Social Security benefit for retired workers in 2021 was only $1,555.

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Are OASDI taxes mandatory?

Old-Age, Survivors and Disability Insurance (OASDI) taxes are mandatory for all workers, employers and the self-employed. Even if you would prefer to save for your entire pension yourself, you cannot opt out of paying OASDI taxes. There are very few exceptions – about 96% of jobs are covered by OASDI, which means they require you to pay, and one day you can get it.

Some groups are exempt from paying OASDI taxes and, as a result, are not eligible for these benefits in retirement:

• Some religious groups: Some religious groups, including Amish and Mennonites, oppose receiving Social Security benefits, and their members may apply for an OASDI exemption.
• Nonresidents: Some people who live in the United States but are not citizens or residents (meaning they either have a green card or are in the country a certain number of days per year) must still pay OASDI taxes. Others do not, including international students and professors who are temporarily in the country.
• Students: Students who work at the school they attend do not have to pay OASDI taxes on that income.
• Foreign government employees: If a foreign government employee receives income in connection with his or her official duties, that income is exempt from OASDI taxes.

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Why it is important

For the younger generation, Old Age, Survivors and Disability Insurance (OASDI) taxes may seem like an unwelcome burden. This can be even more frustrating for those who think they can save for their entire retirement on their own with an individual retirement account or 401(k). So why should you care about OASDI?

First, most people don’t actually save enough for retirement. According to a 2019 Northwestern Mutual study, more than one in five Americans have less than $5,000 saved for retirement. The study found that only one-fifth of Americans have more than $200,000 saved. OASDI provides an important safety net for these people to live out their golden years.

This retirement benefit is especially important for women. According to the Social Security Administration, women live longer than men (by an average of three years), earn less money in their lifetime, and retire with fewer assets. As a result, OASDI is a particularly important safety net for this population.

In addition, although most recipients of Social Security benefits are retirees, others benefit as well. Social Security also extends to people with disabilities and disabled citizens, as well as to children and spouses of disabled, retired, or deceased people.

For example, let’s say a pensioner or disabled person who is receiving welfare benefits dies. Their minor children and surviving spouse will be able to receive a monthly allowance based on a percentage of what the deceased person received. The minor child will receive 75%, while the surviving spouse of retirement age will be able to receive the full amount of the benefit.

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