Ways clients can pay off their debt in retirement
Welcome to Retirement Scan, our daily roundup of retirement news your clients may be talking about
How clients can pay off their debt in retirement
Paying off debt can be challenging in retirement, but there are ways to help retirees reduce, if not scrap the debt burden, according to an article in Forbes. One option is to consider refinancing, as this strategy could help them reduce the cost amid the dwindling interest rates. They may also want to downsize their home, according to the article. “Not only will you reduce your monthly mortgage payments, but you will likely spend less on other bills like lawn care, heating and air conditioning,” says an expert.
5 steps for women to improve their retirement readiness
Women who want to be more prepared for retirement are advised to max out their 401(k) and IRA contributions and continue funding their savings vehicles — even while out of work to attend to their caregiving responsibilities, writes Morningstar's Christine Benz. They should also invest more aggressively, work longer and create a Social Security claiming strategy that will maximize retirement benefits, according to Benz. Developing a plan to cover medical expenses and saving in a tax-advantaged HSA can also help women improve their retirement prospects.
Alternate strategies for stretch IRAs
The Secure Act has scrapped the stretch IRA strategy for some non-spouse IRA beneficiaries, and seniors who want to minimize the tax impact are advised to name a minor, disabled, chronically ill or one who is not more than 10 years younger as beneficiary, writes an expert in Kiplinger. That's because these heirs can still use the stretch IRA option, according to the article. IRA owners should also consider the tax situation of their heirs. "You might want to leave a taxable traditional IRA to the one in the lower income-tax bracket, while leaving a Roth IRA or highly appreciated stock to the child in the higher tax bracket."
If these things apply to your clients, they must postpone retirement
Seniors who have not yet saved enough to secure their retirement are advised to put their plans on hold and reassess their strategies, according to this article in Motley Fool. For starters, they are advised to consider deferring their retirement if they are carrying a considerable debt load, according to the article. Those who have no plans on how to spend their free time will be better off postponing their retirement, as they might experience boredom and depression if they don't have a bucket list of activities to keep them active.