Potential Social Security changes and how they could impact clients

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

Social Security in 2018: Potential changes and how they could impact you
The Senior Citizens League says that seniors on Social Security can expect an increase in cost of living adjustments not seen since 2012 as a result of inflation, according to this article on Fox Business. “The rate of inflation is the driver of COLA increases. But the truth is that it would not take much to beat COLAs of the past five years — 2013 thru 2017," says an analyst with the advocacy group. "During that time COLAs ranged from a low of zero in 2016, and 0.3% this year, to a 'high' of 1.7 percent in 2013 and 2015, anything above 1.7 percent would make it the highest since 2012. The bar is set pretty low.”
How to use your RMD to create a tax-free inheritance for your heirs
Seventy-year-old retirees who have to take required minimum distributions from their tax-deferred retirement accounts will be better off using the after-tax money to buy a guaranteed universal life insurance policy than putting the cash in a regular savings account, according to this article on Kiplinger. For example, a retired couple with $431,520 savings in an IRA would end up with more than $1.5 million in retirement savings at age 85 if they buy the policy.

Ask Larry: Can my wife get a spousal benefit?
A 63-year-old wife qualifies for a Social Security spousal benefit on her husband's record if he is already collecting his own retirement benefit, according to this article on Forbes. If she applies, her spousal benefit will be reduced and she will be deemed to have applied for her own retirement benefit, which means she will only get the bigger benefit. However, if the couple is grandfathered by the new law, the wife can collect just her spousal benefit and defer her own retirement benefit.

How to switch careers and still reach your retirement goals
A study by the Center for Retirement Research at Boston College has found that seniors who changed jobs in their 50s are more likely to continue working at age 65 than those who didn't, according to this article on CNBC. Workers who decide to switch careers experience a drop in wage income that can limit their ability to build their nest egg. "I actually recommend career switchers not to worry about the short-term lack of retirement savings. The more important thing is the long-term career trajectory," says a certified financial planner.

The retirement question you need to answer
A brief from the Society of Actuaries provides a series of crucial questions that clients should answer as they plan for retirement, according to this article on CBS Moneywatch. "Advertisements frame retirement as an extended vacation, brimming with fulfillment of life-long passions and dreams. But for many people, retirement is more like driving on a long trip with question marks posted in places where road signs would help," the brief states.

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