Our daily roundup of retirement news your clients may be thinking about.

Some advisors hesitate with Roth IRA conversions
Some financial advisors are reluctant to have their wealthy clients make a Roth IRA conversion as the Obama administration is mulling a rule that would make required minimum distribution mandatory in Roth IRAs, according to this article in The Wall Street Journal. As of now, there is a required minimum distribution at age 70-and-a-half in a traditional IRA but not in a Roth IRA. But imposing RMD on Roth IRA would scrap one of the major incentives for making a conversion, says a financial planner. Another financial advisor shares the same opinion, adding that a Roth IRA conversion is a wrong move "especially if you are pushed into a higher tax bracket in the year of conversion."  --The Wall Street Journal

Social Security Q&A: Can I really increase my benefits after 66?
Seniors who opt to defer their Social Security benefits until they reach 70 can expect an 8% increase in the annual benefit value whether they continue working until such age or not, according to this article on Forbes. The increase is a result of the delayed retirement credit. Those who continue to work from age 65 to 70 and receive higher earnings than in the previous years can expect a higher Primary Insurance Amount, which is the basis for their retirement benefits.  --Forbes

Why REITs belong in your retirement portfolio
Funds that own real-estate investment trusts are a good option for retirement investors as these vehicles allow broad diversification into the profitable industry, according to this article on MarketWatch. REITs have posted an average cumulative return of 12.7% during a 37-year period, higher than 11.9% for Standard & Poor's 500 based on data from Dimensional Fund Advisors. During this period, portfolio performance would have improved by striking a good balance between REITs and the S&P 500.  --MarketWatch

3 ways to be sure you’re not fooling yourself about your retirement readiness
A study finds that 58% of workers age 35 to 65 are not financially ready for retirement, with half of them not even fully aware of it, according to this article on Time Money. Retirement savers are advised to get full assessment of their savings to determine whether they are on track. They may also need to update their retirement plan when necessary and check their retirement readiness regularly--Time Money

Retirement security in a single number
Clients can tell whether they are on track in their retirement goals by determining the funded ratio, according to this article on Kiplinger. The number can be computed by dividing the overall value of their assets, from the current value of your investment portfolio to the value of future income, by the estimated value of retirement spending. Clients are on track in their retirement plans if the figure is above 100% or else they need to make necessary adjustments if the ratio is below the threshold.  --Kiplinger

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