Our daily roundup of retirement news your clients may be thinking about.
Gaps in the law and enforcement by the Internal Revenue Service allow corporate and private-equity executives to amass millions of dollars in tax-favored retirement accounts, according to a study by Government Accountability Office. Litigation over asset values in IRAs is complex and time-consuming, making the task a major challenge for IRS, which is given only three years to challenge an individuals tax return, the report says. The result is a revenue loss to the federal government through a circumvention of the longstanding rationale for IRA contribution limits, the report adds. -BusinessWeek
Income requirements could be a major hurdle for retirees to qualify for a jumbo mortgage, according to this article on The Wall Street Journal. Retirees need to present tax returns, bank statements, and other documents to prove that their pension, IRAs and other assets provide a steady income stream for at least three years, experts say. Hiring a financial adviser before retiring is recommended so clients can decide whether they should pay cash or take a loan when buying a home. The Wall Street Journal
Premiums for Medicare Part B will be $104.90 but a surcharge could boost monthly bill up to $335.70 if adjusted gross income plus tax-exempt interest exceeds $85,000 for singles or $170,000 for joint filers, according to this article on Kiplinger. The most recent tax return on file will be used by the Social Security Administration as a basis for determining whether clients are required to pay the surcharge for 2015. Clients whose income has decreased as a result of divorce, death, or another life-changing event may seek to lower the surcharge. Kiplinger
While experts believe that retirement saving should be encouraged among Americans, only 53 percent of the workers participate in a retirement plan based on government data, according to an article in U.S. News & World Report. Those who fail to have retirement savings are likely to lose considerably, but most employees have no idea of the consequences of not setting aside for their golden years, according to Ben Pahl, an advisor with the Tranel Financial Group. "Financial literacy in our society is very low," Pahl says. Yahoo Finance
Helping adult children financially may take a toll on retirement savings, so retirees are advised to know if the assistance is necessary or not, according to this article on MarketWatch. Before helping adult children with money problems, retirees need to make a number of considerations. The bottom line is that they need to ensure that the financial aid they provide will not enable their adult children to spend more than they need. MarketWatch
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