When do state pension plans reduce Social Security benefits?

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Q&A: When do state pension plans reduce Social Security benefits?
A retired teacher who receives a state pension in California may still qualify for Social Security benefits if she paid into the program and earned 40 credits, says a certified financial planner. However, the windfall elimination provision will apply, and it could reduce the amount of benefit, says the expert. She is also entitled to survivor's benefits on her husband's record, subject to the government pension offset, which cuts "widow's benefits by two-thirds of her [California State Teachers' Retirement System] pension”.

Meeting your first RMD deadline
Retirees who turned 70 1/2 in 2016 have until April 1 to take required minimum distributions from their tax-deferred retirement accounts, according to this article on Kiplinger. Those who failed to make the withdrawal last year are advised to withdraw the funds by March 31, as April 1 falls on Saturday, says an expert. They will also have to take another RMD this year, which can increase their adjusted gross income, push them to a higher tax bracket and face a Medicare high-income surcharge. To prevent an increase in taxable income, clients may want to donate the funds directly to a charity.

This is why baby boomers are divorcing at a stunning rate
A report from the Pew Research Center claims that the divorce rate among people aged 50 and older has increased by nearly 100% since the 1990s, according to this article on MarketWatch. “What’s pushing gray divorce is people are living longer and they feel more entitled to living fully. They’ve contributed to raising children, they want an emotional journey, it’s their time now,” says a certified financial planner. “They may have (decades) ahead and don’t want to be unhappy anymore.”

Rethinking your career for a better retirement
Clients can improve their retirement prospects by updating their work-related skills, as this would translate to higher pay and savings, according to this article on Yahoo Finance. They should also consider transferring to an employer that offers better compensation or to an industry that provides better working conditions for older workers. Clients have the option to work part-time in retirement to keep them busy and make extra money to cover their needs.

4 ETFs to keep you invested after retirement
Contrary to what some people think, retirees should continue investing in stocks, as these investments offer a higher return potential that can prevent them from outliving their nest egg, according to this article on Motley Fool. Exposure to stocks is necessary to achieve the right combination of income and growth in their portfolio. Exchange-traded funds can help retirees get the right investment mix to optimize the return potential of their portfolio.

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