Retirees are facing a bigger risk than market volatility
Welcome to Retirement Scan, our daily roundup of retirement news your clients may be talking about.
Clients may have longer than they think to invest for retirement
As people are expected to live longer, the biggest risk retirees face is not market volatility, but the possibility of outliving their savings, according to this article from Fortune. To ensure that clients will have enough savings to support them through their post-career years, investors have to increase their risk exposure for bigger returns. Investing early and working longer can also help seniors avoid running out of money in retirement.
What clients need to know about Roth conversions
Recent changes to the tax code no longer allow recharacterizations of Roth conversions, according to this article from MarketWatch. Converted assets into a Roth cannot also be included in computing required minimum distributions. A conversion can be a wise move if it will trigger a smaller tax bill than when the money remains in the traditional retirement account and is withdrawn as retirement income.
Don't overlook advantages of making insurance part of your clients’ retirement plan
Life insurance can be a great tool for clients to help secure their retirement years, writes an investment advisor in Kiplinger. Life coverage offers numerous advantages, such as income-tax exemption of death benefits for the beneficiaries. The heirs may also not owe estate taxes on the insurance payments, provided the estate won't exceed the taxable limit, which is $11.4 million for singles and $22.8 million for couples filing jointly. Policy owners also won’t pay taxes on pre-death benefits for chronic or terminal illnesses.
Why this is a pivotal year for claiming Social Security
2019 is a pivotal year for claiming Social Security benefits, an expert writes in this Morningstar article. That's because this is the last year for seniors turning 66 to defer their retirement benefits and just claim their spousal benefits on their spouse's record. "The difference between collecting at 70 versus my full retirement age is an extra 32% in Social Security benefits," the expert says.