Do your workers want to build up their retirement funds while saving for their children’s education? They should first fund their 401(k), 403(b) or other employer-sponsored plan, according to this article on NerdWallet. They should then proceed to contributing to a 529 savings plan and engage their children to discuss a college-savings strategy. “Factors to consider include: How much time is left until the college funds will be needed? Is community college for the first couple of years of college possible? Are in-state public school options available? By answering these questions, parents can narrow down the expected college costs and thus how much they’ll need to save monthly,” says a CPA.
Military families need to be on top of their finances as they face risks that an average family doesn’t have, and one way to do that is to make the most of the blended retirement system for military personnel, according to this article on MarketWatch. The program reduced the defined benefit income for service members in retirement and signed them up automatically in what's known as a thrift savings plan, a defined contribution plan that used to be voluntary. “Before it was important to make contributions, now it is critical,” says a financial advisor.
Seniors who turned 70 1/2 last year and have not taken the first required minimum distribution from their traditional retirement accounts have until April 1 to make the mandatory withdrawal, according to this article from the Washington Post. Those who fail to meet the deadline will face a hefty tax penalty equivalent to 50% of the RMD amount. The decision to defer their first RMD “effectively forces two years worth of RMDs into one year which could push the income into a higher tax bracket,” says an expert.
Millennials are likely to experience a number of obstacles as they strive to save to secure their retirement, according to this article on Forbes, citing a study led by Brookings Institution Retirement Security project director, William Gale. The generations before them had not experienced many of these barriers, such as taking greater responsibility for their own retirement plans and raising a family at a later age, the report notes. Moreover, “median wealth among Millennials in 2016 was lower than among similarly aged (workers) in any year from 1989 to 2007.”
