Our daily roundup of retirement news your clients may be thinking about.
IRA investors have until the end of the tax season to make last-minute contributions and claim the tax deductions on their 2016 return, according to this Yahoo Finance article. Clients should max out the contributions to reduce their taxable income, says one adviser.
Tax columnists George Jones and Mark Luscombe of Wolters Kluwer put together a list of important changes from this year that will carry over into the next.
"If you have a non-working spouse, you can also make a contribution on their behalf which can double the amount of contributions for your family,” the adviser told Yahoo. “Spousal contributions can be made as long as you file a joint tax return and have income greater than both IRA contributions."
Despite stock market swings, dividend growth remains a good source of income, even for retirement investors, according to this article on Kiplinger. The challenge is to find the right dividend stocks or funds. Those that offer steady dividend growth are particularly good candidates, the Kiplinger’s article suggested. Clients should then hone in on the stocks with low expense ratios to maximize their dividend income.
Contrary to what some experts say, investing assets earmarked for discretionary expenses in risky investments such as stocks may not be a smart move, according to this article on MarketWatch. That is because those discretionary expenses could turn out to be a necessity after your clients retire. Advisers recommend that clients take a conservative approach, such as putting funds in a low expense, no-load mutual fund that holds short-term government bonds.
Buying an immediate annuity can be a good strategy to secure guaranteed income in retirement, but it also means that clients have to give up access to their money for good, according to CNNMoney.
-
Clients who have assets in an IRA but want to reduce the costs may want to roll the money into their 401(k) plan if their employer allows such transfer.
March 6 -
Why advisers should use age-banding to plan for retirees’ spending levels to flex and adjust.
December 30 -
These programs can help advisers cut through the confusion to help clients.
December 21
To decide whether an immediate annuity suits their retirement needs, clients should estimate their expenses in retirement and account for Social Security benefits, plus income from other sources. Getting an annuity is recommended if their retirement income is not enough to cover these expenses, as its guaranteed income will enable them to feel more secure about their golden years.
A 65-year-old American retiree who enters into a same-sex union in a country that recognizes gay marriage can have his or her significant other apply for Social Security spousal benefits once they meet the one-year requirement, according to this article on USA Today. The spouse qualifies for the benefits even if they are a foreigner who has never worked in the U.S. “As a spouse, (your) partner will be eligible for a benefit equal to 50% of (your) gross monthly amount. If (you) were to pass away, then the payment amount would jump up to 100% of what (you were) collecting,” an expert says.
