Our daily roundup of retirement news your clients may be thinking about.
How the new "age tax" would affect older Americans
Americans aged 50 and older would pay bigger health insurance premiums under the new health care bill that cleared the House of Representatives recently, according to this article on Motley Fool. Health insurance premiums for seniors should not exceed three times the amount that younger clients pay under the Affordable Care Act, but the legislation wants an "age rating" that could raise the default rate for seniors' premiums to five times the premiums for younger clients. This would translate to $3,200 increase in annual insurance costs for seniors age 60 and older, according to a study by AARP.
Avoiding the IRA beneficiary tax trap
The "Stretch IRA" or "Multi-Generational IRA" is an option for investors who want their beneficiaries to get the benefits of tax-deferred earnings, according to this article on Kiplinger. The option will enable the beneficiaries to avoid the hefty tax bill on the lump sum distribution from the account after the IRA owner dies. They will owe taxes only on the required minimum distributions that they have to take after the IRA owner's death.
Testosterone is the enemy of smart investing decisions, study finds
A study links high testosterone levels to poor investing decisions, according to this article on MarketWatch. In the study, two groups of men were given a testosterone gel or a placebo and were asked questions to gauge their ability to process information. "What we found was the testosterone group was quicker to make snap judgments on brain teasers where your initial guess is usually wrong," says one of the researchers. "The testosterone is either inhibiting the process of mentally checking your work or increasing the intuitive feeling that 'I'm definitely right.'"
6 times rolling your 401k into an IRA could cost you
Rolling 401(k) assets into an IRA can be unwise for clients who intend to leave the labor force early, according to this article on Forbes. Such a move is also not recommended if they face low fees in their 401(k) plan, hold company stock in the plan, want to continue working past the age of 70 1/2. Those who plan to take a 401(k) loan and get more legal protection than expected from the plan are better off leaving their 401(k) assets alone.
Social Security's website is about to make a big security upgrade
Beginning June 10 clients who hold an account on the Social Security Administration website will need to enter a two-factor authentication that the system will send to their email or text message to get access to their account for added security, according to this article on Money. “Using two ways to identify you when you log on will help better protect your account from unauthorized use and potential identity fraud,” says the agency.
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