Welcome to Retirement Scan, our daily roundup of retirement news your clients may be talking about.
Clients who work in the gig economy can open retirement accounts with tax-deductible contributions and tax-free investment growth, according to this article in CBS Moneywatch. In addition to traditional and Roth accounts, self-employed clients can open a simplified employee pension. Self-employed 401(k) profit-sharing plans are another option, the article says.
Stock market performance and inflation are far greater threats to clients' retirement than the solvency of Social Security, an expert writes in MarketWatch. "There is nothing about Social Security’s finances today that hasn’t been known for decades," writes columnist Mark Hulbert.
Rates for three-year CDs began dipping earlier this year. However, clients may still be able to lock in favorable rates from smaller banks and credit unions, which often wait longer to adjust their CDs, according to this MarketWatch article.
Just 9% of companies offer annuities in their 401(k) plans, but that might change if the Senate passes the federal Secure Act , according to this CNBC article. The bill would protect employers from liability when an annuity fails, removing a barrier to offering them in plans. However it would increase the need for clients to know how their contracts work. For example, annuity payments aren't subject to income tax — but only if the contract was bought with after-tax money.
