Senate tax tweak would curb pretax 401(k) catch-up contributions
401(k) participants aged 50 and above would no longer be able to make catch-up contributions on a pretax basis to their retirement plans under the Senate version of the GOP tax proposal, according to this article on CNBC. "The impact of taking away pretax contributions doesn't affect really wealthy people," says an analyst. "It affects those in the middle who make enough money to use the catch-up, but still need to contribute on a pretax basis to accumulate more money now."
To retire, mind your P's: Purpose, planning and procrastination
Investors should ensure that they have a purpose for all the financial vehicles in their portfolio to improve their retirement prospects, according to this article on Kiplinger. They should also develop a retirement plan and should not procrastinate when building their nest egg. By having a purpose, planning well and avoiding procrastination, clients will be fine even while navigating the critical years before and after retirement.
Ask Larry: Will my mother get half my father's amount when he files?
A senior who opted to retire at age 62 cannot get the full 50% of her husband's Social Security retirement benefit when the husband retires at full retirement age and she files for excess spousal benefit, according to this article on Forbes. Her overall benefit will only increase if 50% of her husband's full retirement benefit rate is greater than her full retirement benefit rate.
Divorce tips for financial security
Divorce is on the rise among Americans over 40 and the rate doubles among couples in their 50s, and the split could greatly reduce their ability to save for retirement, according to this article on CBS Moneywatch. Couples who intend to file a divorce are advised to account for their income, assets and other finances. Hiring a legal and financial professional can also help them determine the first steps to take to make the process less complicated.
Yes, you can save for college and retirement
While people can save for retirement and college at the same time, clients should put their nest egg ahead of college savings, according to this article on NerdWallet. That's because there are no loans available when they get cash-strapped after they retire. Clients may also direct savings earmarked for other things to retirement or college and sock away bonuses and other windfall into their retirement and college savings accounts.