Our daily roundup of retirement news your clients may be thinking about.
The key to making better Social Security decisions
Clients need to understand Social Security rules so they can make the right decisions when developing a claiming strategy for their retirement benefits, according to this article on CBS Moneywatch. The age and earnings record are among the major considerations to make when deciding at what age clients need to start claiming their benefits to maximize the value. Also married clients need to know the best strategy to claim benefits on their spouse's records. -- CBS Moneywatch
New retirement landscape
A survey by HSBC Bank found that 23% of pre-retirees in 15 countries want to spend all of their money and leave nothing to their children when they die, according to this article on Morningstar. Of the respondents only 9% would like to give an inheritance to their children, the survey also found. About 10% of American retirees provide financial support to their adult children, with nearly 60% of those in the working-age group want to give some inheritance to their children. Morningstar
More than half of Americans get this wrong about Social Security benefits
Fifty-five percent of Americans polled by Massachusetts Mutual Life Insurance thought that they would receive their full Social Security retirement benefits while continue working at any age, according to this article on The Motley Fool. This view is wrong, since retirement benefits will be reduced if clients claim the benefits before reaching their full retirement age while working. Although they can expect lower benefits, Social Security will readjust the benefits when they reach their FRA to include the amount deducted in the previous years. The Morley Fool
Did your client leave money at an old job?
Workers are advised to avoid leaving their 401(k) assets with their previous employer as it could cost them dearly, according to this article on Forbes. Those who have left money in their former employer's retirement savings plans are advised to access the money and roll over the amount to an IRA. To save on management cost, there is simple online software that clients can use at a very low fee. -- Forbes
How to budget for savings
Clients who intend to develop a spending budget and save for the future are advised to automate their contributions to their employer-sponsored 401(k) plan, writes Terrance Odean, a professor at the University of California, Berkeley's Haas School of Business. Those who have no access to 401(k) or other savings programs may create an individual retirement account or a Roth IRA and automate their savings, Odean writes. "Also, try to avoid budgeting more than half of your after-tax income on rent, mortgage, utilities, and other bills that you will have to pay even if you are between jobs. You'll have more flexibility if you build some discretionary spending into your budget." -- The Wall Street Journal