Our daily roundup of retirement news your clients may be thinking about.

Helping clients avoid Social Security mistakes
Many people have wrong understanding of the importance of Social Security in their retirement income as a whole and leave substantial amount of money on the table by filing for benefits too early just to secure their finances in the early years of retirement, says Mike Prendergast, director of Altfest Personal Wealth Management. As such, he provides an analysis for clients to see how their benefits' value grow if they opt to defer claiming their benefits. "It can make a meaningful difference in someone's quality of life," he says.  --The Wall Street Journal

Clients should consider using homes to fund retirement plans
With home values representing a significant portion of most seniors' assets, a reverse mortgage can be a good strategy for them to raise funds for their needs and other expenses in their golden years, according to this article on CNBC. "Reverse mortgages get a bad rap in the market partly because people use the money for foolish things," says Steven Sass, a research economist with Boston College's Center for Retirement Research. "The problem is not the reverse mortgage, but how people sometimes use the money."  --CNBC

How to save for retirement when you don’t have a 401(k)
Clients who work for employers that don't offer a 401(k) plan can still save for retirement by opening an individual retirement account, according to this article on Time Money. Clients can contribute to a traditional IRA or a Roth IRA, and these two have different tax treatments of the contributions and withdrawals. Holding a taxable account is an option for those who max out their IRA contributions, but they are advised to pick ETFs and other tax-efficient investments to minimize their tax burden.  --Time Money

Social Security forecasts ‘systemically biased’ to upside: study
A recent study indicates that the Social Security Administration has provided the public with wrong projections involving the beneficiaries' longevity data as well as inflated financial figures of the program, according to a professional journal.  However, the forecasts "were not in any way misleading" and relied "on what was known at the time of the projections," says Stephen Goss, chief actuary for the Social Security Administration. Projections issued in the early 2000s were "not going to be on the mark" because the agency did not anticipate the 2008-2009 downturn, but the impact of the recession are now "reflected in all our projections," thereby providing accurate information about the health of the program, Goss says.  --MarketWatch

Life insurance to help heirs pay bills
Retirees can use their required minimum distributions from their traditional IRA to buy a life insurance policy, according to this article on Kiplinger. Such an option will enable them to leave a tax-free inheritance their heirs can use to cover federal estate tax if they expect the tax to be considerable when they die. However, this strategy may not be a good option for those who will need their RMDs to cover their medical bills and other unforeseen costs.  --Kiplinger

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