Contingency planning for clients relying on pensions
Financial advisors should help create a contingency plan for their clients who expect to get their retirement income mostly from a pension plan, writes an expert on The Wall Street Journal. Many public and private pension plans are facing financial woes, with many of them reducing pension payouts to their beneficiaries, the expert says. "As you create the plan, examine your client’s pension and determine what the funding level is. The funding level gives you insight into its financial viability as an eventual income stream, and into the financial strength of the pension entity itself."
Retirement savings moves that cut your tax bill
Making catch-up contributions, diversifying investments in 401(k) and other retirement accounts, and contributing to a health savings account are financial moves that pre-retirees should consider to maximize their tax savings in the long term, according to this article on CNBC. Those who have left the workforce for good may want to convert some of their traditional IRA assets to a Roth to minimize the tax bite on required minimum distributions, which are mandatory when they reach 70 1/2. They should also ensure they take their RMDs before the deadline, to avoid the penalty, which is 50% of the RMD amount.
3 smart 403(b) moves you can make right now
Workers who have access to a 403(b) plan can make the most of the account by contributing as much as they can, using the Roth feature if their employer offers it and adopting smart investing strategies, including holding low-cost, broad-market stock index funds, according to this article on Motley Fool. They should also find ways to minimize the fees and other administrative costs and avoid making withdrawals as much as possible. Their employer may also offer matching contributions, so they should ensure they contribute enough to take advantage of this benefit.
Is a continuing care retirement community right for you?
Living in a continuing-care retirement community is an option worth considering for seniors, according to this article on Money. This concept combines condo-like living units with communal dining rooms and other amenities to create a dynamic and more engaged environment, and has medical facilities that provide assisted-living and skilled-nursing services for the residents. “The CCRC concept is the most dependable way for people to provide for their own old age,” says an expert with the National Continuing Care Residents’ Association.
Ask Larry: Why hasn't my wife's spousal benefit increased?
A retiree who filed and suspended his Social Security benefit when he turned 66 last year so his 69-year-old wife could collect a spousal benefit on his record can expect his spouse to receive a bigger benefit payment if his Primary Insurance Amount has been increased to reflect additional earnings, according to this article on Forbes. The increase in spousal benefit would be about half of the increase in his retirement benefit.
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