The importance of knowing the rules of social security

Our daily recap of news about retirement that your customers may be thinking about.

Truth or consequences of social security
Clients need to understand how social security works because it is a "fundamental element" of their retirement income plan and has a major impact on their financial security in the future, writes a certified financial planner for Kiplinger. "There are hundreds of claim strategies that take into account your age, your marital status and the age of your spouse, and which spouse is or was the highest economic support," the expert writes. "You will also have to ask yourself how your social security income will affect your income tax."

Companies with newly liquidated pensions see an opportunity to offload risk
According to pension consultants, more and more employers are about to shift the responsibility of paying retirees to insurers as corporate pensions reach the highest level of capitalization since the financial downturn, according to the report. article on The Wall Street Journal. Being in a higher funding level "makes risk transfer more affordable," says one analyst. "A plan sponsor funded at only 80% will need to invest more than the better funded one."

Gray divorces and tax changes complicate retirement
According to this article, home and retirement accounts are the two most important assets for divorcing couples. on USA News & World Report. Due to the new tax legislation, the person making the payment can no longer deduct support payments and the recipient is not required to report the money as part of his or her taxable income. Spouses should consider taxes when they are looking for a share of retirement and investment accounts. "If I ask you if you prefer to have $ 1 million in cash or $ 1.5 in a brokerage account, you will say," I would prefer $ 1.5 million. "But if there are capital gains embedded, the real value could be $ 800,000," says one expert.

3 Reasons Why 62 Year Olds Should Take Social Security Now
Older people should consider collecting Social Security retirement benefits at age 62 if some family members are waiting to apply for benefits in their file, according to this article on the personal finance website Motley Fool. Claiming early is also a good option for seniors who wish to increase their survivor benefits to the level of their deceased spouse's record. Those who are entitled to state pension benefits at a later age should consider filing their social security claim earlier to avoid a reduction in benefits resulting from the elimination of disadvantage provision.

5 big pitfalls of retirement and how to fix them
Insufficient savings, the inability to pursue one's personal passions and isolation are some of the pitfalls that clients should avoid in retirement, writes a MarketWatch expert. Waiting for milestones, feeling inadequate and less confident are other pitfalls that seniors should work to get rid of, adds the expert. "I think those who understand the circumstances, situations and events that they may be facing in retirement have a better chance of avoiding snags and feeling fulfilled in the third chapter of their lives."