Our daily roundup of retirement news your clients may be thinking about.
Retirees should be flexible in their withdrawal rate instead of following the 4% rule to survive in a bear market during their golden years, according to Kiplinger. Retirees should also be dynamic with the assets they sell to create income, use annuities and dividends and be careful with market movement during the "fragile decade," the five years before their retirement to five years after retirement, because a loss during this period could heavily impact one's retirement.
Wanting to return money into an IRA could be possible and tax-free depending on certain situations, according to MarketWatch. If you withdrew money from your IRA, you have a 60-day window to roll over the withdrawal into the same IRA or a different IRA and face no tax consequences. Reverting a Roth IRA back into a traditional IRA can be done by Oct. 15 of the conversion year with paying any taxes. The article also discusses returning withdrawals from inherited IRA and withdrawals for home purchases.
People looking to maximize old 401(k) from previous jobs to save for their retirement can move it to an individual retirement account, according to this article in CNBC. Upon movement from 401(k)s no tax is paid because both 401(k)s and IRAs are paid with pre-tax money. People can also choose to cash out the 401(k) but if the person is younger than 59-and-a-half, additional taxes on the proceeds are due plus a 10% early withdrawal penalty.
Network marketing or multi-level marketing, which is often viewed as another term for a pyramid scheme, can actually play an important role in how well older people transition into retirement, according to this article in Forbes by an outside contributor. The writer says that most retirement planning is about money and finances, but once a client focuses on the social aspects of their lives, network marketing can have some benefits. Network marketing companies can help address non-financial gaps and psychological gaps experienced by retired people or couples during retirement. Many networking marketing firms offer weekly calls, local meetings and conferences, which could help retirees build knowledge, develop new skills while meeting new people.
