Our daily roundup of retirement news your clients may be thinking about.
Universal life insurance, a 1980s sensation, has backfired
Many older Americans are now facing hefty life insurance premiums due to dwindling interest rates, according to this article from The Wall Street Journal. This is further aggravated by the aging of earliest policyholders. â€śEasily 90% or more [of older policies] actually were in trouble or soon to be in trouble,â€ť with many seniors â€śsitting on a ticking time bomb, and most probably arenâ€™t aware of it,â€ť says a life insurance expert.
Nobody likes banking fees â€” but 1 in 6 wonâ€™t try to avoid them
A survey by NerdWallet has found that 16% of Americans would not make any moves to get rid of money management fees even if there are quick methods that will enable them to avoid these fees for bigger long-term savings. â€śIt takes less time and effort than most people think to avoid or reduce financial fees, and the payoff is worth it,â€ť says a retirement specialist with NerdWallet. â€śNext time youâ€™re stuck in traffic for an hour, use the time to call your bank and ask which of your account fees can be eliminated.â€ť
How the new tax code changes retirement saving
A financial advisor says that IRAs have changed under the new tax code, which no longer allows investors to recharacterize their accounts, according to this article on CNBC. “This is critical, because if you are converting your traditional IRA at this point, it is permanent from 2018 and going forward,” says the expert. “So make sure you understand your options and get it right the first time.”
Social Securityâ€™s COLA increase probably wonâ€™t help retirees much
A month before Social Security announces the cost-of-living adjustment for 2019, the Senior Citizens League anticipates an increase of 2.8%, according to this article on MarketWatch. While this could help retirement benefits keep up with inflation, it will not be enough to offset the rising healthcare and housing costs. â€śYou keep up with inflation because of the increase in Social Security, but you are probably falling behind a little bit,â€ť says a financial advisor.