Our daily roundup of retirement news your clients may be thinking about.
More often than not, retirees get the wrong information on the requirements for claiming Social Security retirements even as they handle the crucial task of setting the date to file for the benefits, according to this article on Time Money. To avoid being misinformed, retirees need to know the basic details about early retirement claims, such as reductions and rules that disqualify their loved ones from getting benefits if they opt to get their retirement benefit sooner than expected. Read more about what retirees need to know when claiming Social Security benefits for the first time. Time Money
Retirees do not need to calculate the required minimum distributions they expect to get from their former employer's 401(k) plan as the plan administrators will do the task for them, according to this article on Kiplinger. 401(k) administrators base retirees' annual RMD on the IRS life expectancy and account balance at the end of the past year, and take the initiative of sending the money in case the RMD has not been withdrawn. These administrators also have different approaches in tapping the investments, with some of them giving the participants the chance to choose their own strategy. Kiplinger
While annuities are investment types designed to keep up with inflation and the rising cost of living, retirement investors are advised to know everything about their options and see if these options will work under their own circumstances, according to this article on MarketWatch. The first item on the list is the cost-of-living adjustment riders, which clients may consider adding to an annuity policy when they buy the product. To address future price increases, buyers of some annuity polices may also add Consumer Price Index for Urban Consumers riders or opt for contractual income streams beginning at different dates. MarketWatch
Clients who have been receiving Social Security retirement benefits for four years since they turned 65 are no longer allowed to return all the money they received and reapply when they reach 70, according to this article on Forbes. Such an option is allowed only if they have been getting their benefits for only 12 months. One option left for these clients is immediate suspension of benefits until age 70, with the benefit value to increase 8% after inflation. Forbes
Pension funds are receiving recommendations from their consultants to withdraw their assets from Pimco funds handled by co-founder Bill Gross, who recently announced his departure from the firm. Other consultants also advised their pension fund clients to put Pimcos funds on the watch list and monitor subsequent developments at the bond firm. Morningstar's rating on the Total Return Fund deteriorated as a result of changes in the firm's management and the outcome of investor redemptions. New York Times
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