Will the 'tax torpedo' blow up your retirement?
Retirees can avoid the "tax torpedo" by managing the income they get from Social Security and other sources, according to this article on CNBC. The term refers to the time when retirees owe tax on their Social Security benefit because of a sudden increase in taxable income. It usually occurs at age 70 1/2, when retirees start taking required minimum distributions from their 401(k), traditional IRA and other tax-deferred retirement accounts. "I've had many of my clients pushed into a whole different tax bracket by having to take the RMD. Many of my clients will pay the same or more in retirement as they were paying while they were working," says a certified financial planner.

(Bloomberg News)
(Bloomberg News)

One-third of Americans fear they'll never repay their student loans
A survey by COUNTRY Financial has found that 36% of Americans voiced concern that they would not be able to pay off their student loan debt, according to this article on Motley Fool. College students are advised to consider the consequences of taking a student loan to cover their tuition costs. Many people fail to save enough for retirement because of hefty student loan debt. A study by Morningstar shows that clients lose $0.35 in retirement savings for every dollar of student loan they pay.

4 reasons to hold a retirement dress rehearsal
Seniors should give retirement a trial period before leaving the work force for good so they can figure out the new expenses that come with the new lifestyle, according to this article on Kiplinger. This would also allow them to know if they are still physically able to do the activities they have planned for retirement and if they would enjoy doing their hobbies full time. By rehearsing, seniors could also determine if they should live close to their loved ones or keep some distance from them.

Ask Larry: Should I file for spousal benefits?
A 69-year-old client is advised to file a restricted application for spousal benefits on his wife's record, according to this article on Forbes. Such a move would not hurt his retirement benefit when he starts collecting it at age 70. If he applies online, they should review the copy of application that would be sent to them and ensure that the application includes a statement indicating that he is restricting his application to spousal benefit only.

The GOP's 401(k) ideas raise a big question
Middle-income clients stand to lose from any plans to reduce or scrap the tax deduction for 401(k) contributions, according to this article on CBS Moneywatch. That's because they will pay the taxes at a time when they are at a higher tax bracket than when they retire and start taking the distributions.

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