Our daily roundup of retirement news your clients may be thinking about.
A federal judge ruled that a retirement plan is required under law to show the custodial agreements it forged with a service provider, if a plan participant asks for it, according to this article. The custodial agreement should be treated as a formal instrument that serves as basis for creating and operating the plan, the judge says, adding that it determines the "important aspects about the participants' benefits under the 401(k) plan and who is, or is not, responsible for the management and investment of plan funds." — Bloomberg BNA
Retirement investors should not buy annuities simply because they are offered bonuses that are presented as a way to recoup losses from a portfolio downturn, writes Stan Haithcock. "Annuities are contracts, commodities, and should be owned for the best guarantees that contractually solve for your specific situation. That's the only annuity solution 'bonus' you should be looking for." — MarketWatch
A study has found that 401(k) participants ended up with investments that carried lower fees after the plan's investment menu was reduced, according to Money. Workers who are confused with the investments within the plan are advised to pick options that charge the lowest fees, say Olivia Mitchell and Donald Keim of the Wharton School of the University of Pennsylvania. 401(k) participants may also choose funds that have been recommended by the experts. — Money
Clients who expect to live longer are advised to plan ahead and continue working past their retirement age to make sure their nest egg will also last longer, according to CBS Moneywatch. They also need to stay fit and healthy to reduce the risk of getting illnesses that would require costly medical and long-term care. People who anticipate a longer retirement are also advised to expand and maintain their social connections to get emotional support in their advance years. — CBS Moneywatch
Retirees who intend to downsize as part of a cost-cutting strategy are advised to consider the loss of build-up in home equity and the outcome, the money they would save on property taxes and home maintenance costs before making a decision, writes Wade Pfau, a professor at the American College and principal at McLean Asset Management. They also need to account for the rental expenses over time, Pfau writes. "[Y]ou may wish to first consider whether there are opportunities through local governments for property tax deferral or other possibilities. Other options include renting out a portion of your existing home, or to open a reverse mortgage." — Forbes
Register or login for access to this item and much more
All Bank Investment Consultant content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access