Our daily roundup of retirement news your clients may be thinking about.
What's next for American fertility rates - and Social Security?
The U.S. needs to maintain its fertility rate and keep its population growth steady to ensure Social Security's sustainability, writes an expert on Forbes. A low-fertility scenario could result in a decline in Social Security's taxable payroll, which could put the program at risk, writes the expert. Immigration could be a solution to a low fertility scenario but this could pose new issues for the government.
401(k) to IRA rollover: Everything you need to know
An IRA rollover is an option for workers who resigned and don't want to leave their 401(k) assets with their former employer, according to this article on Yahoo Finance. They may move the funds to a traditional IRA, where the transfer will trigger no income taxes, as the account is a tax-deferred account like a 401(k). Clients may also opt to move the money to a Roth IRA but will owe income taxes for the rollover.
In a volatile market, retirement investors may find this type of bond fund appealing
Retirement savers who invest for income and have low tolerance for risks may want to include stable value funds in their portfolio, writes an expert on MarketWatch. "Although the bonds that underlie stable value funds may fluctuate in value, these funds offer capital preservation in rising-rate markets, along with income, which is usually higher than money market yields," writes the expert. "And, as rates rise gradually, so does the income that stable value funds generate."
What to do with an old life insurance policy
A retiree will be better off transferring her old whole life insurance policy to a hybrid long-term care/life insurance policy on tax-free basis, certified financial planner on Kiplinger. The new hybrid coverage would allow her to cover the cost of a nursing home or home health care in the future, writes the expert. "That was extremely important to her, given she didn’t want to burden her kids or use up her nest egg, but also because the optimizer showed a very low retirement success rate if she needed long-term care in the future."
Retiring to ocean breezes and cheap rent. What’s the catch?
Retirees who relocate overseas solely to reduce their cost of living are likely to end up being unhappy, according to this article on Nasdaq. To avoid this scenario, retirees should move abroad if they have a sense of adventure, their spouses are with them and create a re-entry plan. They should also have a sense of purpose, by doing volunteering work in facilities such as schools and orphanages. "This can be the best way to become a real part of your new community," says an expert.