Our daily roundup of retirement news your clients may be thinking about.
Some clients have the option to take a "mini retirement", which means taking a hiatus from their employer and industry for a time, according to this article on CNBC. Those who consider taking such an option are advised to make a number of considerations before making a decision. For example, they should have a solid budget to cover their needs, get health insurance and determine whether they can afford to miss out on the opportunity to earn and continue building their nest egg.
Clients will need to rethink retirement and plan differently, as they are likely to live longer and have a more productive life than those who came before them, according to this article on TheStreet. For example, when it comes to income investing, "I think it starts with a plan, but I do think maybe we need to revisit the plan," says an expert. "In the old days we used to have this magic formula and as you approached retirement, you automatically lived off the income that you were getting from your fixed income in your portfolios."
Clients are advised to plan ahead for their required minimum distributions from tax-deferred accounts to minimize the tax bite on the income in retirement, according to this article on MarketWatch. For example, they should consider converting traditional IRA and 401(k) assets into a Roth in the years leading to retirement. This strategy will minimize their RMD amounts including their tax bill and enable them to create a source of aftertax income in the golden years.
Planning and reviewing beneficiaries are among the things that clients should do before the year's end to avoid tax mistakes in their retirement accounts, according to this article on USA Today. Retirement savers should also be careful when doing rollovers, donate to a charity through a qualified charitable distribution and consider converting retirement assets into a Roth.
