Our daily roundup of retirement news your clients may be thinking about.
Under the final rules to be released this week for advisors, retirement savers would earn a "private right of action" and enable them to file a class-action lawsuit if advisors fail to act in their best interest, according to The Wall Street Journal. This implies that financial firms are "no longer going to be able to go into arbitration and claim that they are not fiduciaries. In my view, that is going to be the most significant effect of the rule," says a law professor. — The Wall Street Journal
If her spouse is retired, a client may put their income in a Roth IRA to reduce the tax bite in retirement, according to Money. Investors don't face age limit restrictions when contributing to a Roth IRA, an expert says. "You can take almost any investment that triggers taxable income and hold it in a Roth to avoid paying taxes on that income for the rest of your life." — Money
Clients must have a tax plan to manage their distributions from taxable accounts and traditional IRAs in retirement in order to avoid having more taxable income and moving to a higher tax bracket, according to Forbes. They are advised to find ways to make the most of the tax breaks they can claim, such as making charitable donations directly from their IRAs and taking out a mortgage to claim mortgage interest deduction. Investors also are advised to go on margin in their taxable account and claim a deduction for the margin interest and relocate to a low- or no-income tax state. — Forbes
Seniors who decided to start collecting their Social Security retirement benefits at age 62 have a chance to withdraw their application, provided it has been less than 12 months since they started receiving their benefits, according to Kiplinger. Clients will need to file Form SSA-521 to undo their decision and have to return all the benefits payouts they received, including spousal benefits.— Kiplinger
The number of people aged 65 and older with a mortgage increased to about 3 million this year, based on a study by the Consumer Finance Protection Bureau. A Vanguard study reports that the average Americans doesn't have enough savings by the time they retire, and notes the average retirement account balance of Americans aged 55 to 64 is $186,404. Figures from the Social Security Administration show that retirement benefits also are not enough to cover an average retiree's living expenses, seniors are very likely to need long-term health care in their advance years, according to the U.S. Department of Health and Human Services. — The Motley Fool
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