Our daily roundup of retirement news your clients may be thinking about.
Portfolio simulation shows that the retirement bucket strategy didn't perform well last year after a strong performance in 2014, prompting rebalancing to meet living costs and deal with losses, according to Morningstar. Rebalancing is key to sustain the strategy, trimming equity positions that resulted in growth in the portfolio's cash and short-term bond positions. "Retirees who want to maintain a more-or-less static asset allocation during retirement could take a different--and more conventional--rebalancing tack," the article states. –Morningstar
Staying in the workplace past the retirement age is a move that can help people secure their golden years, according to The Wall Street Journal. The federal government can encourage older workers to delay retirement by scrapping the Social Security payroll tax for people who reach the age of 62 and providing them coverage through Medicare. Policymakers may also consider scrapping the Social Security earnings test, offering lump sum payments for those who defer their retirement benefits and implementing a new mandatory retirement age. –The Wall Street Journal
Social Security works like an annuity product but is better than other private annuities, according to MarketWatch. Retirees will be better off tapping their 401(k) assets first before collecting Social Security benefits and they can separate claiming the benefits from their actual retirement date. Delaying the benefits could mean bigger monthly benefit payouts and more secure finances in their advance years and retiring couples will need to find strategies to maximize spousal benefits. –MarketWatch
An annuity may be rolled over into a 401(k) plan if it is held in an IRA and not in a taxable account, according to the Motley Fool. Such a rollover is possible if the 401(k) plan allows it and the annuity provider is open to the plan taking ownership of the policy. Retirement investors can also move the money from the annuity to an existing annuity within the plan without paying any taxes. –Motley Fool
Retirement savings is also for young workers including those who are still in college, according to this article on USA Today. To do this, college students are advised to review their banks statements for the past three months and identify their needs from wants. They should strive to live on these needs and forgo their wants by stashing the money that go to these unnecessary expenses in an IRA. –USA Today
- How Social Security Can Help Clients after a Loss
- Social Security Clinic: A Smart Alternative to File and Suspend
- Social Security Clinic: Have Your Clients Claimed Back Benefits?
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