Some in the retirement industry feared President Donald Trump's proposed overhaul of the US tax system would eliminate some or all tax advantages enjoyed by 401(k)s, individual retirement accounts and similar retirement-savings accounts, but that hasn't happened. Gary Cohn, director of the National Economic Council, said tax provisions relating to retirement accounts "will be protected."
A Fidelity Investments survey found that pre-retirees aged 55 to 61 said they're less likely to begin collecting Social Security benefits right when they become eligible. Just 28% said they expect to start claiming benefits at age 62, down from 45% of respondents who said the same in 2008.
President Donald Trump has proposed slashing federal taxation. The highest personal tax rate would fall to 35% from 39.6%, while the standard deduction would double, and the rate for corporations and most small businesses would decline to 15%.
Although there are still many details to be worked out, the Trump administration's plans to simplify the taxation structure and make drastic cuts to personal and corporate tax are bound to have consequences for advisors. Potential outcomes include more client resources to invest and an increased appetite for certain investments.
Rep. Patrick McHenry, R-N.C., vice chairman of the House Financial Services Committee, said he will introduce a bill requiring financial regulators to launch innovation offices. The offices would exchange financial technology with one another and help fintech startups get in touch with the proper government authorities, he said.
Advisors frequently make mistakes when calculating clients' required minimum distributions from retirement accounts, despite the relatively simple process, lawyer Natalie Choate says. She pointed out three common errors during a keynote presentation at the Retirement Income Summit.
The spring 2017 edition of IRI Insight looks at the retirement preparedness and confidence of baby boomers, finding that millions have limited savings and a poor understanding of the cost of retirement. More than ever, they need financial professionals to help them optimize their sources of income and ensure they do not outlive their financial resources. The spring edition also discusses empowering clients to make decisions in their best interest, the power of qualified longevity annuity contracts, and important retirement information and planning steps associated with age milestones.
IRI recently released a new report forecasting that more advisors in the years ahead will embrace a holistic retirement planning approach -- one focused on developing retirement income for clients. In its annual State of the Insured Retirement Industry report, IRI finds strong demand for lifetime income based on demographics, increasing longevity and the demise of traditional pensions. The IRI report concludes that holistic retirement planning with a focus on income-generating strategies will help advisors address this demand while adding value to the client-advisor relationship. The report also explores public policy developments affecting the industry, product innovation trends across the market and macroeconomic factors affecting lifetime income providers.