Our daily roundup of retirement news your clients may be thinking about.
Contrary to what some experts say, the U.S. is unlikely to experience a retirement crisis as data show that Americans have continued to have considerable savings for their golden years, writes Andrew G. Biggs, a resident scholar at the American Enterprise Institute. "As of 1996, the first year for which full data are available, Americans’ total retirement assets were equal to 2.7 times total personal incomes. By early 2015, retirement assets had risen to 4.1 times personal incomes," Biggs writes. Also, "the historical shift from traditional pensions to 401(k) plans has not reduced retirement saving, Boston College’s Center for Retirement Research recently concluded." –Washington Post
Although a new tax law makes the deduction for qualified charitable distributions from IRAs permanent, retirees may still get the same benefit by donating a required minimum distribution from the account and claim a charitable tax credit. Those who want to make a charitable donation from their IRAs are advised to donate appreciated stocks since they will get a tax break for the investments' full fair market value and avoid long-term capital gains. –MarketWatch
Retirees and pre-retirees need to plan and find ways to protect their assets from fraudsters, family members and other people who intend to exploit them financially in the future. Experts advise them to have an inventory of assets so they can monitor their wealth and easily provide records of these assets to a trustworthy person when they become incapacitated. They are also advised to simplify their financial accounts and look for a loved one or a professional to whom they can entrust their assets. “Whether it’s a spouse, relative, trusted friend or a professional, it’s important to make sure you have somebody that you trust who knows about your finances,” says Finra's Gerri Walsh. –The Wall Street Journal
Doing a Roth IRA conversion is recommended if clients expect to be in a higher tax rate when they retire. However, before making a decision, there are other considerations to make, such as maximizing their marginal tax bracket. “You must think about every line on your 1040 as a symphony where you may not be able to hear the individual instruments but you can surely hear the music,” says Joseph Clark of The Financial Enhancement Group. "Each line works in concert with the rest so no decision — including a Roth conversion — should take place without understanding the implications.” –USA Today
Fewer retirees are less optimistic about the economy, as Wells Fargo's Investor and Retirement Optimism Index decreased 23 points in the previous quarter. Pre-retiree optimism, however, rose 10 points over the same quarter. Decline in retiree optimism "was a very big drop, and the first time in over a year that retirees were less optimistic than non-retirees,” according to Zar Toolan, Wells Fargo Advisors' director of advice quality. –Time Money
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