Our daily roundup of retirement news your clients may be thinking about.
Planning for the dementia factor in retirement
A client cannot pre-elect an IRA rollover in the event she inherits an IRA from her deceased spouse and becomes incapable of executing the rollover because of dementia or any disability, according to this Q&A column from Morningstar. Under the IRS rules, the spousal election can only be executed after the death of IRA account holder. IRA investors who want to prepare for such a scenario may consider transforming their account into a Trusteed IRA or the spouse who is named beneficiary may name a guardian by executing a power of attorney in case dementia makes her legally incompetent to roll over the inherited IRA to her own account. --Morningstar
Some Americans are leaving $100,000 in Social Security money on the table
Deciding a claiming strategy is crucial to determining how much in benefits retirees are expected to receive from Social Security, as they can lose substantially if they make the wrong move, according to this article on the Motley Fool website. The number of claiming strategies to consider increases can be more than 8,000 if clients are married. "Social Security provides half to three-quarters of retirement income for most Americans, so the importance of getting the most from this benefit cannot be overstated, says Christopher Jones of Financial Engines. --The Motley Fool
Bear-market signs have investors thinking defense
A close look at market trends suggests there could be a bear market next year, according to this opinion piece from MarketWatch, so clients who are retired or nearly retired are advised to take on a defensive stance in investing. They may be better off in a high cash position, but the same cannot be said if they rely heavily on dividends for income. Using single ETFs is a better option, and investors are advised to assess their emotional state and determine if they are up to the challenge of playing defense and offense when the bear market sets in. --MarketWatch
Six financial mistakes people make when retiring abroad
Closing bank accounts is a mistake that Americans should avoid if they intend to move to another country after retiring, according to this article in The Wall Street Journal. Some banks also refuse clients who live abroad, so they should check their bank's policy and move their cash if the bank don't entertain expats. Would-be expats need to make a background check about banks in the country where they will relocate and ensure they file their U.S. income tax returns. Failure to account for double taxation when budgeting and to file tax disclosures can have costly consequences, so they should make sure they include these items on their must-do list.--The Wall Street Journal
Pushing aside 401(k)’s for mandatory savings plans
Blackstone President Tony James and labor economist Teresa Ghilarducci are pushing a proposal that would require all employers to participate in a government-sponsored plan without their own 401(k) plans. The plan --dubbed Guaranteed Retirement Accounts-- would address the flaws of the existing defined contribution retirement system, which benefits few workers and provides insufficient savings and replacement income after they retire, the experts argue. “There’s really no alternative. It needs to be mandated,” James says. --The New York Times
- Social Security Tips for the Astute Retirement Advisor
- Advisors: Will Your Clients End Up on Medicaid?
- New Products Address Shortcomings of Long-Term Care Insurance
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