Our daily roundup of retirement news your clients may be thinking about.
A 401(k) conundrum: Can you make a cash pile last for life?
After building considerable retirement savings through 401(k) plans, retirees need to make crucial decisions that will involve longevity and other factors, according to this article on Businessweek. Among the concerns they need to address is how much money they need to withdraw from their plans without outliving their nest egg, as the government has yet to improve its assistance provided to a generation of workers who rely on defined-contribution plans. Annuities pose a good option for retirees to ensure income stream through their advance years. -- Businessweek
What to do when your pension is frozen
As more companies have frozen pensions in recent years, retirees who are currently covered by a pension will continue to receive payments since their employers are not allowed to withhold their pension benefits, according to this article on Time Money. However, the value of pension benefits is unlikely to increase, so pre-retirees need to consider saving and investing strategies to ensure a considerable retirement income stream. Some firms offer a lump sum payment or replace pension with an annuity, which is a better option. -- Time Money
8 tips to maximize your 401(k) for retirement
In order to maximize their 401(k) plans for their golden years, workers are advised to increase their contribution by 1% each year and live off their bonus, according to this article on USA Today. It is also recommended that workers keep the plan if they decide to defer their retirement, check their 401(k) money with their previous employer, and determine their current employer's vesting schedule. Also, workers may consider the Roth 401(k) option to avoid big tax payments upon withdrawal, withdraw just enough money from the plan when they retire, and create an emergency fund. -- USA Today
Florida pension fund to cut Pimco exposure
Florida's retirement system has decided to significantly reduce the $1.9 billion in assets under Pimco's management, according to pension fund's spokesperson Dennis Mackee in a statement. The state's investment plan would also stop Pimcos Total Return Fund and its Inflation Response Multi-Asset Strategy Fund, which managed more than $1 billion for retirees, Mackee says. The funds would be transferred to two funds managed by BlackRock. -- The New York Times
Should boomers give millennials money advice?
Forty-seven percent of millennial workers are setting aside money for their retirement saving, with 43% of the respondents contributing to a 401(k) plan and 23% holding an IRA, according to a survey by Fidelity Investments. About 50% of the younger workers have never had savings for retirement, the survey finds. Parents of these millenials should guide their children on the importance of building a nest egg, as 60% of the respondents look up to their parents as good role models in handling finances, Fidelity says. -- MarketWatch
- IRS Offers Guidance on After-Tax Rollover Allocations
- 401(k) Fees at Issue as High Court Accepts Edison Worker Appeal
- One Third of Americans Lack Retirement Savings