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Clients face tax consequences for botching this year-end retirement move

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

Clients face tax consequences for botching this year-end retirement move
Retirees who are 70 and older this year are advised to ensure they take the RMDs from their traditional 401(k) and traditional IRAs, according to this article in CNBC. These mandatory withdrawals will trigger a tax bill, so procrastinating would be a mistake. “Now is the time to do it,” says Ed Slott, a retirement expert and CPA. “I wouldn’t mess around with waiting and getting it out in the last minute.”

How to sensibly handle an early fortune
Millennials who are lucky enough to retire earlier than expected are advised to avoid making hasty moves, as they are likely to make emotional decisions, an advisor writes in Kiplinger. They are advised to hire a team of trusted professionals in order to ensure they will manage their wealth effectively, the expert writes. “The primary objective should be building on your current assets to create sustained lifelong financial security for yourself and any heirs.”

Many baby boomers are making this retirement plan mistake
Nearly 38% of baby boomers are making the mistake of having a higher stock allocation than what they ought to hold in their portfolio, according to analysis from Fidelity Investments in this Motley Fool article. Roughly 7% of baby boomers are even fully invested in the stock market, the study also found. Older clients are advised to reduce their stock allocation in order to minimize their exposure to market volatility, as they will no longer have enough time to recoup losses from a market slowdown.

Double-digit gains produced by the mutual funds and ETFs with the most AUM were not enough to best the broader market.
November 20

How clients can retire from retirement and keep their balance
Retirees who consider returning to the workplace are advised to engage in careful planning, as their priorities and circumstances are no longer the same, according to this Forbes article. These clients are advised to ensure they have a clear reason for their decision to unretire, set certain boundaries at work and continue doing the things they enjoy in retirement. They should also consider getting advice from the people who can help them adjust with changes in the workplace.

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