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The limited Social Security do-over clients should know

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

A limited one-time Social Security do-over clients should know
Seniors have the option of undoing their Social Security application if they think that they have filed for their retirement benefits too soon, according to this article in CNBC. Retirees can reverse their claiming decision within 12 months from when they filed the application and they will have to repay all the benefits they received, the article states. “It’s a difficult process to go through, one that you wouldn’t make casually,” according to a CFP. “You need to make the decision on purpose, rather than by accident.”

What it means when companies offer clients ‘financial wellness’ plans
Many companies are now offering programs and services that are designed to help their workers boost financial wellness and enhance productivity, according to this article in The Wall Street Journal. These programs provide opportunities for employees to make payroll advances, fund emergency savings accounts and help repay student loan debt while saving for retirement, according to the article. Some companies have started adding auto-enrollment, a standard feature in 401(k) plans, to these financial-wellness programs.

3 things preventing clients from saving for retirement
Retirement saving can be challenging for many clients because of their high mortgage payments, according to this article in Motley Fool. Big spending on restaurants and meals also makes it difficult for many Americans to build their savings. Households that acquired expensive vehicles are facing hefty monthly car payments, which prevents clients from making substantial contributions to their 401(k) and other retirement accounts, according to the article.

Here alternatives to the stretch IRA strategy
With the stretch IRA strategy no longer an option for non-spouse beneficiaries, clients are advised to consider converting their traditional assets into a Roth account to help their heirs minimize the tax bite on the distributions after they're gone, according to this article in Barron's. IRA investors may also designate a charitable remainder trust as beneficiary or fund an irrevocable trust to enable their heirs to mitigate projected losses from taxation. Buying life insurance is another tax-saving strategy for IRA investors who want to leave a legacy to their loved ones.

Direct indexing, heightened competition and advisor tech platforms were just some of the critical details executives discussed.
February 7

6 considerations for retirees wanting to pay off their mortgage early
Retirees who consider paying off their home mortgage early are advised to factor in their risk tolerance and liquidity level before making a decision, according to this article in Forbes. They should also account for other debt, consider refinancing to a lower rate and reduce their housing expenses by moving to a smaller home. Those who are planning to cover the mortgage debt by drawing funds from 401(k)s and IRAs need to consider the tax consequences, as withdrawals from these accounts will trigger a tax bill and boost their tax bracket.

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