How your client might lose Social Security benefits
Our daily roundup of retirement news your clients may be thinking about.
Clients could lose their Social Security benefits
Clients could lose a portion of their Social Security benefits if they file while still working, according to an article on Motley Fool. Lower-earning spouses who took time off to raise children or care for an aging parent may not get a benefit based on the taxes they paid into the system. Additionally, retirees are likely to get reduced benefits after 2034, when Social Security trust funds are expected to run out of money, according to an expert.
Top regrets of retired clients
About 55% of retirees have regrets about the way they planned for their golden years, according to a recent study. Individuals reported depending too much on Social Security for income, while others said they should have paid down their debt by the time they retired, according to an article in The Washington Post. Many retirees said they did not save enough to secure retirement, according to the study.
3 year-end IRA and 401(k) moves
Retirees who are 70 1/2 and older should ensure that they take the required minimum distribution from their traditional 401(k) and IRA by the year's end, according to an article in Forbes. Those who consider donating to charity have the option of making a direct donation from their IRAs using qualified charitable distribution, which is a tax-efficient strategy, as the donated amount will be counted toward their RMD but will be excluded from taxation. Maxing out 401(k) and IRA contributions is another tax-saving option to consider before the year ends.
How your client can (efficiently) withdraw money from retirement accounts
Conventional wisdom dictates that retirees who need to generate income from their portfolio should draw from taxable accounts first before tapping their tax-deferred and Roth accounts, according to this article on TheStreet. However, this approach could result in larger income taxes, one advisor says. This strategy also does not account for the tax circumstances of both retirees and their heirs, the expert adds.