Our daily roundup of retirement news your clients may be thinking about.

Why clients should save Roth IRA and HSA distributions for 2016

Under the new law, Medicare premiums in 2018 will be based on tax returns for 2016, so retirees are advised to find strategies to reduce their tax burden, according to this article on MarketWatch. Some tax reduction strategies include setting aside Roth IRA and health savings account distributions for next year and accelerating their 2016 income into 2015. Clients also need to review their Roth conversion strategy since the converted amount will be included in their taxable income. -- MarketWatch

Tailoring retirement plans to companies with a handful of workers

New providers, such as San Francisco-based start-up ForUsAll, are offering services to manage 401(k) plans to small businesses, according to this article in The New York Times. Providing a retirement plan to employees is a challenge for small businesses, as workers pay higher administrative fees compared with their counterparts in large firms. "We challenged ourselves to imagine what an ideal 401(k) looks like for a small business if we rebuilt it from the ground up," says ForUsAll CEO Shin Inoue. – The New York Times

Reducing all that IRA paperwork

Retirement savers can avoid the stress of managing a lot of paperwork by merging their 401(k) assets with their previous employers into their current plan, or roll these old assets over into an IRA, according to this article on USA Today. They may also consider using online statements for additional discounts, as well as keeping their statements with online storage companies. Looking at these statements too often is not advisable, so clients may limit their review of their statements once a year or when they have to compute for their net worth or rebalance their portfolio. – USA Today

Is a 401k loan ever a good idea?

Borrowing from a 401(k) plan is a good option for several reasons, such as funding a down payment for a home or making home improvements, according to this article on The Motley Fool. However, clients are advised to explore other options, such as tapping emergency savings, home equity loan or line of credit or personal loan, and compare the benefits and costs, such as interest rates. Also, even if the interest of a 401(k) loan is smaller than those charged by other options, borrowing from the plan could mean missing out on the potential returns of the borrowed amount. – The Motley Fool

Planning to work longer before retiring? Not the best idea, experts say

Many clients plan to continue working until they turn 68 because they don't have sufficient savings and have no confidence that Social Security and other income sources will be adequate to cover their needs, according to a study by Northwestern Mutual. "People don't generally have a savings strategy that's going to be able to afford a modern retirement," says Northwestern Mutual's Rebekah Barsch. "Saying we're going to work until 70 is at direct odds with the actual retirement ages the actual population ends up in." -- Forbes

Read more:

Register or login for access to this item and much more

All Bank Investment Consultant content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access