Our daily roundup of retirement news your clients may be thinking about.
Future retirees whose non-Social Security income exceeds $80,000 would see benefit cuts under a proposal by New Jersey Gov. Chris Christie, according to this article in The Wall Street Journal. Those who will have at least $200,000 in non-Social Security income would expect a phase-out of their benefits. Based on 2013 income data, up to 11% of Americans age 62 and above could expect reduction in retirement benefits, according to Richard Johnson, the director of the Urban Institute's program on retirement policy. The Wall Street Journal
Contrary to what many experts think, clients cannot expect to create more wealth in a Roth IRA than in other retirement savings options despite the tax-free advantage of a Roth account, according to an article on Forbes. Retirement investors can expect the same ending values from traditional and Roth IRAs if the investment amounts to $5,000 and the tax rate remains the same. The return in a traditional IRA is higher if the tax rate has changed, while a Roth IRA performs better if the tax rate has increased. Time Money
President Barack Obama signed into law a bill that would stop the use of Social Security numbers for identification, according to an article in The New York Times. Medicare is expected to cease from imprinting Social Security numbers on new beneficiary cards as a result. "The Social Security number is the key to identity theft, and thieves are having a field day with seniors' Medicare cards," said Rep. Sam Johnson, R-Texas. The New York Times
Social Security trustees failed to issue their annual report on the state of Social Security on April 1 as mandated by law, according to this article on The Motley Fool. This has stirred concern in many quarters as the delay could mean unfavorable results, specifically on the projection on the Trust Funds' insolvency. Trustee report issued last year shows that the program will go insolvent by 2033, so clients may still have time to prepare to boost their savings to close the gap in retirement income. The Motley Fool
A retiree is not entitled to a divorced benefit on her first husband's record but can file for a divorced widow benefit on the same record since she married her second husband after she turned 60, according to an article on Forbes. However, she cannot get more than one benefit at the same time. Forbes