Our daily roundup of retirement news your clients may be thinking about.
President Barack Obama said at a White House conference that he intends to mobilize the Labor Department to assist states in creating laws that will enable people to save for retirement, according to this article in The New York Times. The President also lauded the department for proposing rules that would require financial advisors to observe fiduciary standards when providing retirement guidance to clients. "The notion here is that we want to make sure responsibility is rewarded, not exploited." The New York Times
Social Security's looming financial crisis should make younger generations concerned about their retirement prospects, according to this article on Time Money. Younger clients will need to have a retirement plan that includes a contingency as well as an account for smaller Social Security benefits. It is very likely that lawmakers will raise the level of annual wage income that will be subject to payroll taxes to address the program's financial woes. Time Money
Taking a loan from a 401(k) plan can be risky because participants will have to pay hefty fees and taxes, aside from missing out on the gains the money would have generated, according to this article on Yahoo Finance. They will also be required to pay the loan within 60 days if they decide to resign from their jobs. 401(k) participants are allowed to make hardship withdrawal, but will be required to pay the corresponding taxes and fees. Yahoo Finance
California is among the worst states to retire because its cost of living is higher than the national average, according to this article on Kiplinger. Clients will also find New Mexico unfriendly because it imposes tax on Social Security benefits and gross receipts tax. The state also has a higher cost of living that the rest of the country, aside from other unfavorable conditions, such as a higher crime rate and poverty rate. New York is another state that retirees may consider avoiding because it has the highest cost of living, while health care services and housing are very expensive. Kiplinger
Clients who are considering the best claiming strategy for their Social Security will find that there are no "right" answers to questions regarding their benefits, according to this article on MarketWatch. It's because each family has unique circumstances and will require unique solutions. As such, hiring a competent financial advisor for guidance will be a wise move for clients to arrive at the best decision on how to claim their retirement benefits. -- MarketWatch