Knowing full retirement age is a key to developing a claiming strategy that will enable pre-retirees to maximize Social Security benefit, according to this article on Kiplinger. Married couples should also coordinate their claims and determine whether they still qualify to "file and suspend" under the old rules to get the maximum benefits possible. Those who expect to live longer should consider delaying their benefits, while couples are better off having the lower-earning spouse file earlier and the spouse with bigger earnings delay his or her own retirement benefit.
Pre-retirees who contemplate on moving to a 55-plus community in retirement should determine whether the community's amenities and setup support the kind of lifestyle they prefer, writes an expert on The Wall Street Journal. They are also advised to account for other factors, such as the community's housing designs, health care and transportation, as well as demographics. Pre-retirees who consider living in this type of community should also check its financial standing and its effectiveness and consistency in implementing their rules.
Clients who don't qualify to contribute to a Roth IRA because their annual income exceed the limits have the option to use the backdoor strategy, according to this article on Morningstar. This strategy allows them to evade the income threshold for Roth IRA by contributing to a traditional IRA and then converting the funds into Roth. The Roth conversion may trigger a hefty tax bill depending on whether the funds are taxable or tax-free money, so clients are advised to understand the pro rata rules to determine the tax implications of the conversion.
While many Americans have not saved enough for retirement, hope is not lost to have a comfortable life in the golden years, according to this article on CNBC. To improve their retirement prospects, clients are advised to contribute as much as 10% of their income to their retirement accounts and allocate assets to low-cost but reliable investments, such as target date funds. They should also consider delaying their Social Security benefits and look for other strategies to maximize their retirement income.
At the start of the year clients may want to make financial moves that can help boost their savings and enhance their retirement prospects, according to this article on CNNMoney. They may begin by determining their spending so they can figure out how much they need to save to secure their retirement and then increase their retirement contribution rate to as much as 15% of their gross income. They may also want to max out their last year's traditional IRA contributions, as they can still make the contributions until they file their 2016 tax returns. They should also ensure that they have a balanced investment portfolio within their retirement plans.
