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Does Social Security still have a minimum benefit?

Does Social Security still have a minimum benefit?
Social Security offers a special minimum benefit to enable certain low-income workers to receive a higher benefit than what the traditional formula would allow, according to this article from Fox Business. To qualify for the special minimum benefit, clients should have reported a minimum amount for at least 11 years. This amount is adjusted yearly for inflation. For example, workers would get credit for the special minimum benefit this year if their annual income reaches $14,805.

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Social Security checks are printed at the U.S. Treasury Philadelphia Finance Center in Philadelphia, Pennsylvania on February 11, 2005. Photographer: Dennis Brack/Bloomberg News

When, and when not, to borrow from your 401(k)
Taking a loan against a 401(k) plan is an easy way for cash-strapped clients to raise money, as it will require no credit check, trigger less paperwork and charge lower interest rates compared with credit cards and other financial loans, according to this article on MarketWatch. However, a 401(k) loan should be a last-resort option, as it would result in an opportunity cost that can offset the interest that they will pay on the loan. Those who fail to repay the loan on time will face income taxes and possibly an early withdrawal penalty, as the unpaid loan will be treated as a taxable distribution.

Your RMD amounts are more conservative than you might think
Although retirees need to start taking required minimum distributions from traditional retirement accounts when they reach 70 1/2 and pay taxes on the withdrawals, they can reinvest the money in a taxable account or a Roth IRA if they don’t need the funds, writes an expert on Morningstar. If the RMD amount is too big for their needs, they can reduce the withdrawals from other accounts, writes the expert, adding that retirees have to withdraw the funds anyway as they age, especially when they don’t have heirs. “It's worth noting that the assumptions underpinning the distribution periods for RMDs on the Uniform Lifetime Table... are conservative.”

The do over trust: protecting your adult children from themselves
Parents in California and 25 other states have the option of fixing their broken irrevocable trusts as these states now have so-called “decanting” statutes, writes an expert on Kiplinger. “The process known as decanting lets you ‘pour’ the assets out of an old inadequate irrevocable trust into a new irrevocable trust with more suitable administrative and dispositive provisions for the changed circumstances,” the expert explains. “This ‘Do-Over Trust’ can rectify unwanted provisions of an old trust with new terms in a new trust.”

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