Our daily roundup of retirement news your clients may be thinking about.
Filing for Social Security can be a wrong move if seniors are still employed and earning a wage income, according to this article on Motley Fool. Those who delay spousal benefit even after they reach their full retirement age are also making a mistake. Clients should ensure that they keep track of their earnings record, as their benefit will be based on their 35 highest earning years.
Investors are likely to get generous dividends as corporate earnings are increasing as a result of improving economic conditions and corporate tax cuts under the new law, according to this article on Kiplinger. However, clients are advised to be wary of several companies that may not sustain their dividends, prompting research firm Simply Safe Dividends to mark these firms as "risky."
Seniors who opt to defer their Social Security benefits until the age of 70 need not file for and suspend the benefits when they reach full retirement age, according to this article on Forbes. Even without doing anything, they are expected to earn delayed retirement credits until they turn 70. The file-and-suspend option also has downsides, like not receiving full survivor benefits and curbing their ability to claim retroactive benefits.
Making the most of 401(k) employer's matching contributions is one way for young clients can amass twice their salary for retirement by the time they reach the age of 35, according to this article from MarketWatch. They should also consider ditching "normal" expenses and build their nest egg even as they pay off student loan debt. Automating savings contributions and managing uneven cash flow are other strategies to help young clients hit their retirement targets in their 30s.
Making the most of workplace retirement plans and maximizing benefits from Social Security and other government programs will enable clients to build their nest egg faster than others, according to this article from U.S. News & World Report. They are advised to contribute consistently and max out the contributions to their retirement accounts. Clients should also consider setting up an IRA and ensure that they take advantage of all the tax breaks offered by their retirement accounts, such as tax deferral on 401(k) contributions and tax-free withdrawals from a Roth account.
