These Social Security myths could harm employees' retirement accounts

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Social Security myths hurting retirement savings
Most employees should wait to file for Social Security — but more than half of the program's beneficiaries do the opposite and file early, according to an article in USA Today. That choice is likely influenced by several myths like it's generally better for clients file for Social Security early and invest the benefits. Workers who believe Social Security is going bankrupt may also try to file early, the article says, but doing so often "just means settling for smaller checks for life."

Social Security Admininstation Getty.jpg
"Close up of illuminated social security administration at dusk, horizontal."

Boomers woefully under saving for retirement
More than one in five Americans have less than $5,000 saved for their retirement, including just 17% of baby boomers, according to a CNBC story on Northwestern Mutual's 2019 Planning & Progress Study. Just 5% have saved between $5,000 and $25,000 — and only 16% have put away $200,000 for retirement. Instead of saving, the article says, most respondents opted to work longer and retire later in life.

7 midyear moves retireees can make to trim tax tabs
There are some midyear maneuvers that can shave retirees' tax tabs — both in 2019 and in the longer term, according to this article on Kiplinger. They should review their retirement savings to determine if they qualify for catch-contributions and evaluate whether their itemized deductions might exceed the standard deduction amount. Seniors can also trim their tax tabs by contributing to their grandchild's college savings account, which could lead to a state income tax deduction.

Do employees know the Roth '5-year rule'?
The promise of tax-free withdrawals has made Roth IRAs a popular option for retirement savings. However, retirees need to be age 59 ½ before they can withdraw investment earnings tax-free, according to this article in US News & World Report. They must also wait five years after opening and contributing to the account, the article says.

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