Our daily roundup of retirement news your clients may be thinking about.
Many retirees and pre-retirees do not have an estate plan, which is an important component of their retirement plans, according to this article on USA Today. Their failure to create an estate plan will mean trouble for their heirs when they pass away, experts say. "It's important not to look at financial planning in a vacuum. Estate planning is intertwined with the financial plan," says Ann-Margaret Carrozza, an estate planning and elder care attorney based in Manhattan. USA Today
Clients who consider converting their traditional IRA to a Roth account need to determine when they will use the funds before making a decision, said Ed Slott, an expert on retirement, in an interview with Morningstar's Christine Benz. They are also advised to know their tax bracket in the future and identify the source of money that they will use to cover the taxes on the conversion, Slott adds. Read the expert's explanation on how important recharacterization is as well as the pitfalls when making an IRA conversion. Morningstar
Many Gen X'ers make the mistake of not saving enough for retirement or using their 401(k) money for other purposes, according to this article on MarketWatch. A lot of them also consider retirement investing only when they approach the golden years, fail to estimate their retirement needs, and miss important factors when planning for retirement. Know more mistakes that Gen X'ers make and how clients can avoid them. MarketWatch
With the ongoing debate on how to fix Social Security's financial woes, the federal government needs to determine where it can get more funds to cover expanded benefits, according to this opinion piece on Bloomberg. While Americans need more money in retirement, increasing the benefits would mean having more funds than what Social Security gets from payroll taxes, the piece states. "Before we start adding new benefits, we should think about where we're going to get the money to pay the ones we still haven't funded. And then carefully count the cost of making them more generous still." Bloomberg
A 62-year old client whose husband is suffering from brain cancer is advised to continue receiving her own retirement benefit, according to this article on Forbes. In case her husband dies, she may file for a widow's benefit on her spouse's record when she reaches full retirement age. Such a move will enable her to maximize the widow's benefit, which will be bigger than her own retirement benefit. Forbes