Our daily roundup of retirement news your clients may be thinking about.
President Barack Obama's fiscal 2017 budget proposal includes rules that would block investors from making "backdoor Roth" contributions, according to MarketWatch. Used by rich investors who cannot increase their Roth contributions because of income limits, the "backdoor Roth" strategy allows them to make non-deductible contributions to a traditional IRA or 401(k) plan and later on roll over these funds into a Roth account. The proposed rules are unlikely to clear Congress because it is an election year. –MarketWatch
Data from the Census Bureau show that Glenwood Springs, Colo., Elko, Nev., and Lawrence, Kan., lead the cities with the highest proportion of working seniors in the country, according to U.S. News & World Report. Other cities with more seniors currently employed or working are Greenfield, Mass., Iowa City, Iowa, Anchorage, Alaska, and Washington, D.C. More people aged 60 and above are employed in Sioux Falls, S.D., Kearney, Neb., and Burlington, Vt. –Yahoo Finance
Many people have developed a dislike for reverse mortgages because it could lead to financial woes later in retirement, writes Wade Pfau, professor at The American College and a principal with McLean Asset Management. The federal government has made changes to the rules to make reverse mortgages a more attractive option, although certain issues still remain, Pfau writes. "For many lenders, there is still a notable cost involved in initiating a reverse mortgage, ... I also have concerns about whether the mortgage insurance premiums collected by the government will be sufficient to cover the non-recourse aspects of the reverse mortgage." –Forbes
Clients to decide to retire this year are advised to review their post-retirement budget and anticipate certain expenses, according to Fox Business. They also should weigh their options before applying for Social Security retirement benefits to supplement their income, and consider getting health insurance coverage. Clients have to think of the impact of retirement on their tax bill next year and to remember taking the first required minimum distribution from their retirement accounts once they turn 70 1/2. –Fox Business