Our daily roundup of retirement news your clients may be thinking about.
The complicated rules for 401(k) plans, IRAs and other retirement accounts have created many traps that even some smart investors fail to avoid, according to this article on Forbes. For instance, a tax court ruled that the Internal Revenue Service publication concerning IRA rollovers cannot be used by a tax lawyer to justify a decision since the agency itself has misinterpreted the law. “Even the IRS is confused," says an expert. Read the article to identify some of these traps and know what to do to avoid them. –Forbes
Based on the changes to Social Security claiming rules, a client can no longer start collecting either her own retirement or divorced spousal benefit before she reaches her full retirement age and shift to the other when she turns 70 for maximum benefit, according to this article on Los Angeles Times. Couples also have until May 1, 2016 to use the restricted application strategy while 62-year-old divorcees may also use the same strategy for ex-spousal benefit, provided their former spouse has turned 62 at the time of filing the application. –Los Angeles Times
People who have built a sizeable nest egg teach other retirement savers to create a budget that will enable them to spend their money wisely, and to set a long-term goal for retirement, according to this article on CBS Moneywatch. Supersavers also prioritize retirement savings and automate their contributions, a strategy that other people also should adopt. Just like these successful savers, clients should reduce the costs in their retirement plans and learn from other people's experiences. –CBS Moneywatch
Clients need to know the different fees that their 401(k) and other retirement accounts will charge them after they retire and ways to avoid or curb these costs, according to this article on The Motley Fool. These fees include advisory fees, 401(k) expense ratios, 12b-1 fees and annuity fees. Retirees may also face mutual fund fees, front-end and back-end loads, and taxes on withdrawals from their 401(k), traditional and other tax-deferred retirement accounts. –The Motley Fool
Clients needs to spend their money wisely so they can free up more cash to save for their golden years, according to this article on USA Today. To accomplish this, they need to ask if they actually need the item before buying it and they have to dole out cash to obtain it. Also, before spending, they have to ask if the convenience of obtaining the item will offset the cost and buying it will have a dent on their time and budget. –USA Today
- Long-Term Care Takes Back Seat on Client Priority List
- Advisors: Will Your Clients End Up on Medicaid?
- New Products Address Shortcomings of Long-Term Care Insurance