Our daily roundup of retirement news your clients may be thinking about.
President Barack Obama included provisions in his proposed 2017 budget that would scrap the "backdoor" Roth IRA and Roth contributions after 70, ending the tax benefits from these strategies, according to Kiplinger. The proposed budget also would scrap the "stretch IRA," limit the amount of money stashed in retirement accounts and impose required minimum distribution rules on Roth IRAs. Clients also could expect an end to the net unrealized appreciation break as well as limits to their tax savings in retirement accounts if the budget clears Congress. — Kiplinger
Clients cannot expect their savings in 401(k) plans and 529 college savings plan to be safe from risk as the money will be invested in securities, according to Money. However, these accounts provide tax-saving opportunities for clients. — Money
Clients in the 25-29 age group, with an annual income of $50,000, should have $5,000 in their retirement accounts, based on a calculator on CNNMoney. The figure is based on a pre-retirement income replacement ratio of 70% to 80% at age 65, assuming the client will spend 30 years in retirement and receive Social Security benefits that are the equivalent to 20% of his or her pre-retirement income. — CNNMoney
A majority of retirees claimed they decided to leave the labor force for good not because of ill health and other work-related concerns but because they wanted to spend more time with loved ones and to pursue their hobbies and interests, according to a study by Boston College Center for Retirement Research. "People are being pulled towards positive things," says Steven A. Sass, an economist with the CRR. "That’s what keeps people at work or pulls them into retirement."— Forbes
Retired clients who collect a pension for their work in a government agency or institution that did not withhold Social Security taxes can expect their Social Secuirty benefits to be reduced under the Windfall Elimination Provision, according to Bankrate. However, the provision will not affect the benefits that their surviving spouse and children will receive provided the client waited until his or her full retirement age to file for benefits. — Yahoo Finance