Our daily roundup of retirement news your clients may be thinking about.
More states should consider offering or enhancing their property tax deferral program similar to California’s Property Tax Postponement Program, writes Alicia H. Munnell, director of Boston College Center for Retirement Research. The program makes it easier and cheaper for seniors to tap home equity and create an income stream in retirement, explains the expert. To improve their property tax deferral program, states should launch an extensive education campaign about it, simplify the application process and offer a more reasonable interest rate.
The country's retirement system is failing many Americans, with retirement plan coverage is on a decline over the last 20 years, writes a Forbes contributor. "Just 40% of workers were covered by any type of retirement plan through their workplace in 2017, 4 percentage points lower than in 2014...," writes the expert. "The lack of retirement plan coverage hits some groups more than others. And, though employer-provided retirement plan coverage declined for every demographic group, some groups lost more than others."
Seniors who consider downsizing in the golden years should ask themselves some questions before making a decision, according to this article on personal finance website Motley Fool. For example, they should ascertain whether they can still maintain their current home and moving to a smaller home will enable them to boost their savings. Those who opt to stay in their big house can rent out some parts of their home for extra income.
Pre-retirees are advised to engage in tax planning as early as possible to avoid unforeseen tax liability in retirement, writes an expert for Kiplinger. This means thinking beyond the basics and their current situation and taking into account their tax-deferred IRA or 401(k), explains the expert. "Your goal should be to get yourself into the lowest tax bracket possible every year in retirement. That means divvying up your nest egg into different tax 'buckets.'"
Staying in a nursing home in retirement is a very expensive option, with the cost approaching $90,000 based on an estimate by Genworth Financial, according to this article on CNBC. Clients who are likely to live in a nursing home in their advanced years should consider buying traditional long-term care insurance or life insurance. It is also important to create a plan to cover the cost of long-term care whether they intend to get insurance or not.
