Our daily roundup of retirement news your clients may be thinking about.
Aha! How ‘catch up’ contributions boost 401(k) savings
Taking advantage of catch-up contributions in retirement accounts can help a lot in saving more to secure your clients' golden years, according to this article from the Wall Street Journal. For example, a 50-year-old 401(k) participant can expect $925,000 in retirement savings at 65 if he or she maxes out contributions, but could end up with $1.07 million if he or she makes catch-up contributions to the plan. Their 401(k) assets could grow to $1.58 million if makes catch-up contributions until the age of 70. — The Wall Street Journal
What couples need to know about Social Security benefits
Options for married couples claiming Social Security retirement benefits are now limited thanks to the passage of a new law last year, according to Money. Following the rollout of the Social Security Fairness Act of 2015, your clients' claiming strategies should be based on their relative ages, earnings records and life expectancy. Couples need to understand that the survivor benefits that the lower-earning spouse will receive will be bigger if the higher-earning spouse opts to delay his retirement benefits. — Money
How to become a 401(k) millionaire
Retirement investors who want to end up having $1 million in their nest egg may find their employer-sponsored 401(k) plan a useful tool to achieve this target, according to Kiplinger. The plan accepts pretax contributions that helps reduce taxable income, provides tax-exempt annual returns and charges no taxes on the funds, and if the employer is generous; match contributions. It is also advised that 401(k) participants begin contributing to their plan early in their career to retire with a million dollars in the account. — Kiplinger
Are counties becoming major players in public pension plans?
Although counties across the U.S. differ in their involvement in the pension system, study shows that they play a significant role in providing pension plans in states that hire the most workers, writes Alicia H. Munnell, director of Boston College Center for Retirement Research. "Generally, county employers participate in state pension plans but, in a surprisingly large number of states (22), some counties sponsor their own plans," Munnell writes. "Maryland, California and Virginia lead the pack, with county assets amounting to 17%, 16%, and 14%, respectively, of total public pension assets in the state." — MarketWatch