What to do if your client waited too long to address retirement

Retirees As U.S. Rule To Protect Retirement Savers Vanishes
Register now

Welcome to Retirement Scan, our daily roundup of retirement news your clients may be talking about.

What to do if your client waited too long to address retirement
Older clients who want to stop procrastinating and start catching up with their retirement goals are advised to get hold of their finances and reduce their spending, according to this article in Motley Fool. They are advised to adopt a more aggressive approach to investing by contributing the maximum amount to their 401(k)s and IRAs and taking advantage of catch-up contributions. Creating other sources of income, such as passive investments and real estate can also help them secure their retirement, according to the article.

How the Secure Act will impact your clients’ retirement plan
Raising the mandatory age for RMDs to 72 is one change under the Secure Act that has eliminated confusion caused by the old rule, IRA expert Ed Slott says in this Kiplinger article. The new law also scrapped the stretch IRA strategy for non-spouse beneficiaries, requiring them to draw the inherited assets within 10 years, which can have a major impact on their taxes, he adds. Non-spouse beneficiaries can mitigate the impact by spreading the distributions over those years, while clients can convert their IRA assets into a Roth to provide tax-free inheritance to their heirs.

This could be the new benchmark age for retirement
The typical retirement age around the world is increasing, according to a study in this CNBC article. In the U.S., the full retirement age for seniors born in 1960 and after now stands at 67, with other countries poised to raise their own retirement age, the study by Transamerica Center for Retirement Studies and the Aegon Center for Longevity and Retirement found. “That tends to be the prevailing benchmark," says TCRS CEO Catherine Collinson.

Best returns from the biggest funds
Double-digit gains produced by the mutual funds and ETFs with the most AUM were not enough to best the broader market.

Pension annuity versus lump sum: Which one is best for clients?
Seniors will be better off receiving annuity payments instead of collecting a lump-sum payment from their pension plans if their goal is to have a lifetime income stream, according to this article in TheStreet. Combined with Social Security benefits, the monthly pension payouts will enable them to create their guaranteed income floor. Those who don't need to have a source of guaranteed retirement income have the option of rolling the lump sum pension payment into an IRA. Although the IRA transfer is a non-taxable event, retirees need to consult a tax professional to know the tax rules, according to the article.

For reprint and licensing requests for this article, click here.
IRAs 401(k) Retirement income Pensions Annuities Savings accounts Retirement benefits Social Security Retirement withdrawals
MORE FROM EMPLOYEE BENEFIT ADVISER