Your client was laid off before they could retire? Here’s what to do
Welcome to Retirement Scan, our daily roundup of retirement news your clients may be talking about
Clients laid off before they’re ready to retire? Here’s how to plan accordingly
Older workers are advised to be proactive and prepare for the possibility of getting laid off in the years before retirement, according to this Forbes article. They are advised file for unemployment insurance, revise their budget, review their savings and register for health coverage through Medicare or a private plan, according to the article. They are also advised to leverage their experience and expertise, such as offering consulting services, and shift to a less stressful job. Losing a job means moving to a lower tax bracket, and this creates tax-planning opportunities, such as converting traditional assets into a Roth and selling appreciated stock.
5 ways the Secure Act could harm retirees
Clients are advised to be aware of the major changes under the Secure Act that could hurt their retirement prospects and the legacy they intend to leave behind for their loved ones, according to this article in Kiplinger. For starters, non-spouse beneficiaries could face a bigger tax bite on withdrawals from inherited IRAs because of the elimination of the stretch IRA option. The increase in the RMD age change from 70 1/2 to 72 also creates confusion for new retirees.
Clients looking for retirement income? They may find it in closed-end funds
Seniors who want to boost their retirement income amid the current, low interest-rate environment may consider closed-end funds as part of their income-generating strategies, writes an expert in MarketWatch. "CEFs may offer higher average yields than category peers, such as open-end funds and ETFs," according to the expert. "This 'closed' structure can serve as an advantage to managers seeking to generate reliable income."
Here’s how much a client forfeits if they don’t grab their employer’s 401(k) match
Workers are advised to ensure that they take advantage of their employers' 401(k) matching contributions, as missing out on this benefit means giving up a part of their compensation, according to this article in CNBC. “It’s so important to take every bit of money your company wants to give you,” says a CFP. “Your employer is saying they’ll give you money, and to get it, you just need to set aside savings for yourself every year.”