Can clients roll over 401(k) directly into a Roth IRA?

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Our daily roundup of retirement news your clients may be thinking about.

Don’t let long-term care costs devastate clients' retirement
People are living longer, which, in addition to the obvious good news, also boosts the chance that they will need long-term care after they retire, according to this article on Kiplinger. Clients should consider getting the appropriate insurance to prepare for the hefty costs of a long-term care, as Medicare and Medicaid do not cover all of the retiree's health care expenses. They may also consider getting "living benefits" products, an asset-based long-term care coverage, or an annuity.

Why chasing returns is especially dangerous for retirees
Retirees should avoid raising their stock allocations for greater returns and instead stick to guidance provided by their financial advisers, according to this article from Forbes. According to Vanguard, not deviating from a financial plan prepared by an adviser could result in 1.5% more in average annual returns, according to the article. "Even after advisory fees, the net return earned by the investor could be higher than otherwise,” writes the contributor.

Can clients roll over 401(k) directly into a Roth IRA?`
Under new laws, clients are allowed to roll over their 401(k) assets directly into traditional IRA for the pre-tax contributions and Roth IRAs for the after-tax funds without any upfront tax consequences, according to this article on Motley Fool. Converting traditional 401(k) assets into a Roth account is recommended when clients move to a lower tax bracket at the time of the conversion. That's because the tax bill will be lower than when they do the conversion in the year they are in a higher tax bracket.

More than half of Americans lose sleep over money—here are 4 ways to improve their finances immediately
To improve their long-term financial health, clients are advised to contribute consistently to a 401(k) or other tax-advantaged retirement account, according to this article on CNBC. Another way to enhance their wealth is to pay themselves first by setting aside an amount in an account where the funds can grow. They should also consider automating their retirement plan contributions and invest for compounded growth.

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