4 expensive IRA rollover tax traps and how to avoid them

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Welcome to Retirement Scan, our daily roundup of retirement news your clients may be talking about.

Avoid these 4 IRA rollover tax traps
Additional taxes await clients who do not roll over their IRA the correct way, according to this article in MarketWatch. For example, clients can roll over retirement assets into the account just once each year. Doing so more often will subject the withdrawal to income taxes and a 10% penalty. To avoid this tax trap, clients can directly transfer funds to another trustee's account.
Women age 65 and over are finding more success in business
More women are starting businesses after age 65, according to this CNBC article, though these entrepreneurs are still a minority: Most leave the labor force before that age, an expert said. But the trend may be changing: The entrepreneurial activity of senior women increased to 3% from 2.3% more than a decade earlier, both figures being higher than the national average.

California becomes 7th state to sponsor its own retirement savings plans
California is the seventh state to offer state-sponsored retirement plans, according to this article on CNBC. While it does not affect clients who have access to a 401(k) plan through their employer, the CalSavers Retirement Savings Program "could help bridge the gap for as many as 55 million U.S. workers who do not have access to an employer-sponsored plan," the article said. The CalSavers program's average contribution rate is 4.93%. By the end of the year, CalSavers will also offer a pretax IRA option, according to the article.

What the best 401(k) plans look like
"The difference between a high-quality 401(k) plan and a low-quality one can add up to tens of thousands of dollars" in lost savings and unnecessary fes over a client's career, says one expert in this Forbes article. Clients getting a job offer should ask whether and how much the company matches contributions to their 401(k). If there is no match or if it's too low, clients should "consider asking for a higher salary to compensate," according to the article.

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