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

Why retirement savers are in better shape than ever
A report from Fidelity Investments shows that people are saving more money for retirement and setting up more retirement accounts, with fewer savers borrowing from their funds, according to this article on Money. The average balance in Fidelity-administered 401(k) plans jumped by $4,300 to $92,500 at the end of 2016 from 2015 figures, while the average balance of Fidelity-administered IRAs stood at $93,700, up $3,600 from prior year levels. The increases could be attributed mainly to the rising stock market and growing economy, improved employment rate and stronger property values, says Fidelity.

Source: Bloomberg
Source: Bloomberg

You might need nearly $350,000 to pay for health-care costs in retirement
A report from the Employee Benefit Research Institute indicates that a retired couple aged 65 will need to have at least $349,000 in savings to have a 90% chance of covering their health-care expenses in retirement, according to this article on MarketWatch. “[I]ndividuals should be concerned about saving for health insurance premiums and out-of-pocket expenses in retirement for a number of reasons," write the authors of the EBRI report. "Medicare generally covers only about 62% of the cost of health-care services for Medicare beneficiaries ages 65 and older, while out-of-pocket spending accounts for 13%."

Do your clients know who gets their assets when they die?
A will is not a guarantee that clients will leave their assets to the intended heirs after they die, according to this article on Motley Fool. In most cases, the will has control on insurance policies, IRAs and other similar accounts. Read the article to learn important tips to avoid any undesirable tax outcome and to ensure that the clients' last wishes for their retirement accounts and insurance policies will be honored.

Ask Larry: When should I file for benefits?
A 63-year-old wife will have to wait for her 62-year-old husband to apply for his own Social Security retirement benefit before she can apply for a spousal benefit on his record, according to this article on Forbes. That is because both of them do not qualify to file and suspend their benefits. The wife will also not be deemed to have filed for a spousal benefit if she applies for her own retirement benefit before her husband submits his application for his own benefit.

When is it OK to withdraw or borrow from your retirement savings?
Clients are advised to weigh their options before making hardship withdrawals from their retirement accounts, according to this article on CBS Moneywatch. For example, instead of borrowing funds from their traditional 401(k)s or IRAs, clients are better off tapping assets in their Roth accounts, as qualified withdrawals will trigger no tax liability. To minimize the damage of hardship withdrawals in the future, clients should consider making contributions to a Roth 401(k) if the plan offers such an option, and they should also build an emergency account so they will have available funds for unforeseen expenses.

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