Dreaming of the returns of stocks without the risk? Dream on
A fixed indexed annuity is a financial product that guarantees minimal investment returns amid a down market, but investing in it is not without risk, according to this article from The Wall Street Journal. That's because investors would lose access to their money and incur opportunity cost for buying the annuity. “Fixed indexed annuities are not an alternative way of investing in stocks. They have completely different risk and reward components. They are an alternative to other fixed-dollar investments, such as certificates of deposit or Treasury bills,” says an expert.

Even responsible savers make retirement mistakes
Holding too much cash is one of the common errors that even responsible investors make, according to this article from Kiplinger. They also make the mistake of adopting a very conservative approach to investing or not spending enough to relax and enjoy their lives with their loved ones. Contributing too much to tax-deferred retirement accounts is creating a tax "time bomb," as distributions will be taxed in retirement and clients would be in a higher tax bracket by them.

Ask Larry: Was I misinformed by SSA?
A senior qualifies for Social Security divorced spousal benefit on her first husband's record if their marriage lasted 10 years, her ex-spouse reached the age of 63 and they have been separated for at least two years or he started collecting his retirement benefit, according to this Q&A article from Forbes. The same criteria apply if she wants to file the same benefit on her second former spouse. The senior has the option of filing for her divorced spousal benefit at 66 if she had reached 62 by Jan. 1, 2016.

What to do with an end-of-year bonus
Clients should have a plan on how they will use their year-end bonus from their employers, according to this article on CNBC. They have the option of contributing the windfall to their 401(k) plan or directing all or a portion of the money to other retirement accounts, such as a traditional IRA, a Roth account or a health savings account. Workers can also use their bonus to open an emergency fund or a 529 college savings plan, and to start saving for a big-ticket financial goal, such as a home or a vehicle.

The key to a secure retirement? Working longer
Clients who want to be financially secure in their golden years should consider working past their retirement age, according to this article on USA Today. “Working longer is one of the most effective ways to improve prospects for a secure retirement,” say two experts in a book they wrote about retirement. “It increases monthly Social Security benefits, allows more time for saving in 401(k)s, and shortens the period of retirement that assets need to cover.”

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