Contingency planning for clients relying on pensions Financial advisors should help create a contingency plan for their clients who expect to get their retirement income mostly from a pension plan, writes an expert on The Wall Street Journal. Many public and private pension plans are facing financial woes, with many of them reducing pension payouts to their beneficiaries, the expert says. "As you create the plan, examine your client’s pension and determine what the funding level is. The funding level gives you insight into its financial viability as an eventual income stream, and into the financial strength of the pension entity itself."
Retirement savings moves that cut your tax bill Making catch-up contributions, diversifying investments in 401(k) and other retirement accounts, and contributing to a health savings account are financial moves that pre-retirees should consider to maximize their tax savings in the long term, according to this article on CNBC. Those who have left the workforce for good may want to convert some of their traditional IRA assets to a Roth to minimize the tax bite on required minimum distributions, which are mandatory when they reach 70 1/2. They should also ensure they take their RMDs before the deadline, to avoid the penalty, which is 50% of the RMD amount.
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