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

401(k) money should be a last resort for Harvey victims
A financial analyst says that 401(k) participants who were affected by Hurricane Harvey should consider taking withdrawals a last resort option to raise funds for rebuilding their lives, according to this article from Fox Business. That's because they will face income tax and 10% penalty if they are younger than 59 1/2, says the expert. “So if you’re in the 25% federal tax bracket, right there you’re only getting 65 cents on every dollar you pull out.”

Bloomberg News

Should clients ever convert retirement savings to a Roth?
Converting a portion of assets in a traditional IRA and 401(k) into a Roth is a great strategy to minimize the tax bite on retirement income, according to this article on personal finance website Motley Fool. While the Roth conversion triggers a tax bill, withdrawals from the account are not taxed, enabling clients to keep their taxable income low. Retirees may face a tax bill on a portion of their Social Security benefits if their combined taxable income, which includes all their earnings plus 50% of their benefits, will exceed a certain threshold.

Did you plan your retirement as well as your vacation?
Clients are advised to plan their retirement as thoroughly as they plan for the vacation and other activities that they intend to do after leaving the labor force for good, writes an expert on Kiplinger. Their plan should include knowing the expenses before retirement, understanding their health care options, and consolidating multiple investment accounts, writes the expert. Clients should also determine their Social Security claiming options, identify all their income resources, and develop a long-term care plan.

The bucket approach to securing your retirement
The bucket approach is a good strategy to structure the asset base of a retirement portfolio to minimize the impact of market fluctuations on a retiree's income, according to this article from the Chicago Tribune. Based on a book, the approach requires investors to use three "buckets" to develop a plan that can counter the three major risks in retirement investments. The first bucket should consist of safe and liquid investments for emergencies and short-term expenses, while the second bucket is earmarked for conservative investment growth. The last bucket is aimed at generating growth and long-term income, minimizing taxes; and covering long-term care and other related expenses.

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