Our daily roundup of retirement news your clients may be thinking about.
Will spousal benefits decrease if husband files early?
A client applying for a Social Security spousal benefit on her husband's record can expect 50% of his Primary Insurance Amount, or the benefit amount at full retirement age, according to this Q & A article from Forbes. The spousal benefit will be reduced if she has not yet reached her FRA and will get either her spousal benefit or her own retirement benefit, whichever is higher, as she will be deemed to have filed for both. Her spousal benefit will remain unchanged whether her husband files early, although her widow's benefit could be reduced.
Who's better off — today's retirees or yesteryear's?
A report from United Income shows that the average life expectancy of 60-year-old seniors has climbed to nearly nine years compared with 1900 levels, according to this article on CBS Moneywatch. The report also shows that the number of retirees without any physical and cognitive impairments also rose to 62% from 25% in 1963. Fewer retirees are living on minimum wage, with the median amount held by retirees in 2016 increasing by more than 50%, the report also shows.
The silly mistake 1 in 5 retirees needlessly make
A survey by the Employee Benefit Research Institute has found that 44% of workers rolled their old 401(k) assets into an IRA after changing jobs, according to this article on Nasdaq. Some 29% opted to keep the funds in the plan, with 20% cashing out the assets and transfer the money to another investment or savings account, the survey found. Cashing out is a bad financial move, as this will trigger a 10% penalty on top of the tax bill and missed benefits.
Make sure this key ingredient is part of your retirement
Clients are advised to live a healthy lifestyle as part of its preparation for the golden years, writes an expert on CNBC. "When people reach retirement, they believe they can make up for decades of unhealthy behaviors like sedentary lifestyles or poor eating habits, because they won't be working as much and will have more time," writes the expert. "While improving behavior will help at any age, it won't make up for years of unhealthy actions that have led to chronic conditions from diabetes to heart disease."