Our daily roundup of retirement news your clients may be thinking about.
The baby boom generation and increased longevity is expected to drive philanthropic giving to $8 trillion over the next 20 years, according to a study by Merrill Lynch and Age Wave. The transfer of wealth to younger generations from estate could amount to $59 trillion from 2007 to 2016, according to a report from the Center on Wealth and Philanthropy at Boston College. “The majority will pass down to the next generation, though more than $6 trillion is expected to flow to charitable organizations, contributing to what some have referred to as the golden age of philanthropy,” said Merrill Lynch's David Wright. –The New York Times
While executives have options to reduce the impact of taxes and manage corporate perks more effectively in the early part of retirement, they need to start working on the strategies at least two years before they retire, according to financial planners. They need to take an inventory of possible short-term cash-flow needs in retirement and check company policies to decide on what to do with deferred pay. “For many executives, the year they retire is their biggest salary ever because of all the lump-sum payments” they will receive from their plans, says Lisa Brown, a financial adviser at Brightworth. –The Wall Street Journal
The number of young people who move back to their parents' home is on the rise, threatening the seniors' retirement prospects, according to this article on USA Today. Experts say seniors need to demonstrate "tough love" and help them become financially independent. "I remind clients that the best gift they can give their children is to be financially independent and not be a burden to them in their older years," says a certified financial planner. –USA Today
Clients who intend to make Roth IRA conversions should not use funds from the retirement account to pay the subsequent tax liability and instead draw money from non-retirement accounts, according to this article on MarketWatch. They stand to lose from missed opportunity of growing the retirement money by compounding. Using money from IRA to pay the tax bill is recommended if they expect to be in a higher tax bracket when they retire. –MarketWatch
Clients who are planning on when to file for Social Security retirement benefits are advised not to consider their life expectancy, according to this article on Forbes. Longevity is not a reliable factor in determining the right age to file retirement benefits since the possibility that people die at their life expectancy is zero. It is only useful when clients approximate the oldest age they would reach. –Forbes
- 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