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Your clients’ retirement money may not be as safe as they think

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

Clients’ retirement money may not be as safe as they think
Clients who invest their retirement savings in mutual funds, annuities and other financial products from a bank are not covered by insurance, according to this article in The Washington Post. The Federal Deposit Insurance Corporation extends coverage only to individual accounts, joint accounts, retirement accounts and trusts. “Notice, nothing mentioned about mutual funds, annuities, etc. Those would be the investment products offered by banks that are not deposit accounts, and thus, not insured by the FDIC, regardless of dollar amount,” says a spokesperson for the FDIC.

Eldlery woman holding cane Bloomberg News image

5 habits that put young workers on track for retirement
Young clients who want to stay on track for retirement are advised to manage their living expenses, build an emergency fund and scale back on traveling, according to this CNBC article. They should also invest as early as possible. Parents can also set up a Roth IRA for their children who are earning an income, as they will pay taxes on the contributions at lower rates and receive tax-free growth and distributions in retirement.

20 places to retire near the mountains
Huntsville, Alabama; Anchorage, Alaska; Phoenix, Arizona; and Fayetteville, Arkansas are among the best retirement locations in the U.S. that are close to mountains, according to this article in Kiplinger. The list is based on factors that include cost of living, safety, median incomes and poverty rates for retirees. The list also includes Carlsbad, California; Denver; Hilo, Hawaii; and Pittsfield, Massachusetts.

Those leaving the workforce before 65 need more cost-effective places to live.
September 9

How clients can stop getting hefty tax bills in retirement
Seniors may see a heftier tax bill after they retire, as they could receive bigger taxable income than their pre-retirement earnings, according to an expert in this Forbes article. To minimize the tax bite, seniors should consider delaying Social Security benefits and hold taxable investments in tax-advantaged savings vehicles. Retirees who want to make charitable donations may also opt for tax-saving strategies, such as donating directly from their IRAs through a qualified charitable distribution.

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