When To Step In And Help Elderly Family Members With Finances

Our daily roundup of retirement news your clients may be thinking about.

When to step in and take over an older parent’s finances

Retirees should delegate the management of their finances to their children before they reach advanced years and their health starts to decline, writes an expert on The Wall Street Journal. "If anything, many families are too slow to act... Older parents, hoping to stay independent, are quick to minimize difficulties; adult children, reluctant to meddle, may ignore red flags," writes the expert. "But the consequences of waiting can be dire: closed accounts, damaged credit, money lost to scam artists—even foreclosure."

New study identifies a key tactic to boost your retirement savings

Studies show that people are more likely to increase their savings rate for retirement if they are shown computer-generated representations of what they would look like in their golden years, writes an expert on Yahoo Finance. Clients will not need to boost their amount of money that they set aside if they start saving as early as they can, writes the expert. "Starting early is more important than earning higher returns. You’re better off earning 6% for thirty years than 9% for twenty years."

Why married men are so terrible at retirement

Men are not really good at retirement because they fail to make the necessary preparations for everyday life in the golden years, writes a Forbes contributor. Retirement is also the time for couples to agree on every decision they make, but men are not used to consulting their spouse, writes the expert. "Another issue is that financial service professionals and HR departments are contributing to the problems both married men and couples face because they’re still telling everyone if you just enroll in the retirement plan and come to our annual meeting about your investment options, life will be good when you get to the finish line."

True or false: Test yourself on Social Security basics

Clients may want to check out this article on Kiplinger that offers a test to gauge their understanding of Social Security rules. A report from the American College of Financial Services claims that only about a quarter of seniors aged 65 and older could pass a quiz on retirement income literacy. "The lack of literacy in retirement income planning in the United States indicates that many people are unable to make informed decisions about their own retirement and Social Security benefits," states the article.

How to pay zero taxes legally in retirement

Seniors are likely to move to a higher tax bracket in retirement because of the required minimum distributions that they have to take from their tax-deferred accounts and Social Security benefits, according to this article on Entrepreneur. One option to avoid taxes legally is to buy dividend-paying whole life insurance using their retirement savings. “The essence of this strategy is to take advantage of the tax-deferred growth on the earnings within life insurance policies by using tax-free loans to access the cash when needed," says an expert. "So you borrow the money from yourself instead of the bank, then pay yourself the interest and repay the loan you took from your policy.”

Author: Margarida Correia
Source: SourceMedia.
Retrieved from: bic.financial-planning.com
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