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

It’s the perfect time for a Roth conversion

Converting a traditional IRA into a Roth account before year's end can be a great strategy in tax planning, according to this article on MarketWatch. Such a move means a relatively low current tax cost, and it will enable clients to avoid higher tax rates on income that will accumulate in your Roth account in the future. While clients need to convert their traditional IRA into a Roth account this year to start getting the tax-saving benefits, they are advised to get help from a good tax expert before making the conversion with a significant balance. –MarketWatch

The Myth of the Dumb 401(k) Investor

Contrary to data from Aon Hewitt, 401(k) participants have had effective asset allocations and used trading strategies, according to John Rekenthaler, Morningstar's vice president of research. These investors disappointed critics when they turned less active than other stockholders during the bear market in 2000, instead of leaving the market en masse as what some experts predicted. However, some 401(k) investors had no access to defined-contribution plans, while others may have access to these plans but opt not to contribute or cannot contribute because they have very limited means, Rekenthaler says. –Morningstar

The new wage base for 2015 Social Security taxes and benefits

The Social Security Administration adjusted the maximum taxable wage base for 2015 to $118,500, an increase of 1.28% from the rate in effect this year, according to this article on Motley Fool. The maximum taxable wage base is significant for average workers because it limits the taxes on contributions to retirement and disability safety nets. The wage base is also important since it places a cap on the amount of earnings that is the basis for determining their primary insurance amount. –Motley Fool

Half of Americans aren't in a retirement plan

Only 53% percent of workers take part in an employer-sponsored retirement plan, according to data from the Bureau of Labor Statistics. Employees in the part-time and low-income categories including those in small companies are the least likely to have a plan. Workers in the vulnerable groups register low participation level as a result of limited access to retirement plans and reduced take-up rates, notwithstanding the fact that contribution to a retirement plan could be unaffordable for these workers. –CBS Moneywatch

Pension consultants who recommend selves as money managers could be violating law

Pension consultants may be violating the Employee Retirement Income Security Act of 1974 if they recommend themselves as money managers, according to a letter by Labor Assistant Secretary Phyllis Borzi to Rep. George Miller, D-Calif. The letter reflects the official's opinion concerning investment consultants who made such recommendations and are bound to fiduciary duty. The department “has long been aware of the potential for conflicts” in this area and is “committed to addressing the issues and conflicts of interest" involved, the letter says. –The Wall Street Journal

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