How your clients' 401(k) plans will change in 2017: Retirement Scan
Our daily roundup of retirement news your clients may be thinking about.
More employer-sponsored retirement plans are expected to add an auto enrollment feature next year to help workers build their nest egg, according to this article on MarketWatch. More 401(k) plans are also likely to use a digital platform to enable participants to access their accounts through their mobile devices. Advisers managing clients with 401(k)s must also consider possible changes that expected with the Labor Department's incoming fiduciary rule.
Retirees who have to sell stocks in their IRAs to take the mandatory required minimum distribution can avoid selling these stocks using an "in kind" transfer strategy, according to this article on Kiplinger. Retiree investors who use this strategy pull the stocks out of the IRA, pay the subsequent tax liability, and move these shares to a taxable account. An "in kind" transfer is recommended for those who have grown to like the stocks that have to be sold to meet the requirement. “Some customers own a security and really love that stock, and selling it isn’t something they would do if not for the RMD,” says an expert.
Clients that consider collecting Social Security spousal benefits before reaching full retirement age are deemed to have claimed for their own retirement benefit, according to this article on Forbes. This means that their retirement benefit is reduced and the actual excess final benefit they receive is also reduced. The client has the option to suspend their retirement benefit after reaching their full retirement age, but this could result in a lower ultimate retirement benefit.
Thinking of downsizing? Here are the questions to consider
Couples who consider downsizing in retirement should ensure that their spouses also agree to the decision, according to this article on The Wall Street Journal. They should also realize that downsizing is a major decision to make and they should be prepared emotionally to leave their house for many years and move to a smaller home. Couples have to check all the numbers to ensure that they will not be at a loss due to the downsizing and that they will not change their decision.
ETFs are a good investment option for retiree investors who are seeking dividend income, according to this article on Fox Business. Compared with stocks, ETFs are less exposed to market volatility, making them a suitable choice for retirees who need to reduce the risk in their portfolio. Those who want to diversify their portfolio can pick low-cost real estate investment trust ETFs. These ETFs are tax-efficient, as they distribute at least 90% of their income as dividends to shareholders.