Wealthy retirees are often too scared to spend
Welcome to Retirement Scan, our daily roundup of retirement news your clients may be talking about.
Why many retirees are too scared to spend
Many wealthy retirees who benefited from the booming economy in recent years remain frugal out of fear that they will outlive their savings, according to an article from Bloomberg. However, this should not be the case, especially for those who have saved more than enough to secure their retirement. “They keep denying themselves today for fear of what could happen tomorrow,” an expert says.
Separation is wiser than divorce ... sometimes
Couples who consider filing for divorce after the age of 55 will be better off opting for a legal separation if being divorced could mean losing health care coverage, according to an article from Forbes. “If many people understood the long-term care and health insurance consequences, they might decide instead to get a separation agreement or give up on the divorce. If you don’t have health insurance and you have a serious accident or illness, financially you are done,” says an attorney.
What clients should know before borrowing from their 401(k)s
Workers who need to dip into their 401(k) savings to recover from a financial setback should consider the consequences before making a decision, according to an article from CNBC. For example, they can take out a loan without taxes, provided they meet the requirements, while withdrawals will be subject to 20% withholding taxes and a 10% penalty if they are below the age of 59 1/2. A hardship distribution is another option, but it could boost their gross income and trigger more taxes.
A common Social Security scam that could cost clients thousands
Many clients are falling for fraudsters who will call them and pose as Social Security Administration officials to obtain personal financial information, according to a Motley Fool article. More have become victims of this scam, which can cost thousands of dollars. To avoid this scheme, clients are advised to never give out their Social Security number and financial information over the phone or email and create a mySocial Security account on the program’s website to monitor their record.