New IRS 401(k) ruling aims to boost retirement income

New IRS 401(k) ruling aims to boost retirement income

Straight from the IRS: Designed to expand the use of income annuities in 401(k) plans, IRS new change makes clear that plan sponsors can include deferred income annuities in target date funds used as a default investment.

 

Your new options?

 

Torrid Tech Explains: Employees saving in their 401(k) plan at work can choose annuities from insurance companies inside their 401(k) plan so they can reduce market losses on their retirement savings by putting their savings into annuities, instead of mutual funds or target date funds.

 

http://www.marketwatch.com/story/irs-401k-ruling-aims-to-boost-retirement-income-2014-10-29

 

Afraid you may outlive your savings? Have youtried giving annuity options a try? What’s been your experience with putting your savings into annuities? Share your feedback. We’d love to hear from you!

Torrid Tech Explains Why New Gov’t Policy Is A Green Light For Advisors To Increase Annuity Options In Retirement Plans

torrid_logo.jpg

Torrid Tech Explains Why New Gov’t Policy Is A Green Light For Advisors To Increase Annuity Options In Retirement Plans

Torrid Technologies, a retirement planning software company, breaks down the government financial technobabble and explains to advisors how new U.S. Department of the Treasury and Internal Revenue Service policy changes allow them to increase their client’s annuities and why consumers should consider this option.

Marietta, GA, November 8, 2014 – Recently, the U.S. Department of Treasury and Internal Revenue Service confirmed a new policy change with a goal “to help retirees manage their savings and ensure they have a stream of regular income throughout retirement”. This is good news for financial advisors, professionals and consumers alike. And to better explain the options available, Torrid Technologies has outlined their top 5 Need-to-Know points from the policy, how the changes allow advisors to increase their client’s annuities and why consumers should consider the option to purchase annuities more readily.

 

  1. Designed to expand the use of income annuities in 401(k) plans, the change makes clear that plan sponsors can include deferred income annuities in target date funds used as a default investment

    1. Torrid Tech’s Explanation: Employees saving in their 401(k) plan at work can choose annuities from insurance companies inside their 401(k) plan so they can reduce market losses on their retirement savings by putting their savings into annuities, instead of mutual funds or target date funds.

  2. Many employer-sponsored 401(k) plans offer so-called target date funds as a default investment for participants who do not affirmatively elect a different investment.  Target date funds get their name from the fact that their allocation of investments shifts gradually from equities to fixed income as participants approach an intended target retirement year.

    1. Torrid Tech’s Explanation: In recent years target date funds have exploded in popularity by offering workers a way to reduce risk in the market as they approach retirement.  Recent abnormal bond pricing has made it difficult to achieve this result and has left many wondering whether target date funds are accomplishing their goal.

  3. The new guidance or policy provides plan sponsors an additional option to make it easier for employees to consider using lifetime income.  Instead of having to devote all of their account balance to annuities, employees use a portion of their savings to purchase guaranteed income for life while retaining other savings in other investments.

    1. Torrid Tech’s Explanation: This means the employee can choose to put some into annuities for lifetime income and still also have savings in other investments like mutual funds.

  4. Under the guidance released a few weeks ago, a target date fund may include annuities allowing payments, beginning either immediately after retirement or at a later time, as part of its fixed income investments, even if the funds containing the annuities are limited to employees over a specified age.  The guidance makes clear that plans have the option to offer target date funds that include such annuity contracts either as a default or as a regular investment alternative.

    1. Torrid Tech’s Explanation:  This means that the employer plans have the flexibility to offer the annuity as an option or as a default when employees save into their 401(k) plan.

  5. In an accompanying letter, the Department of Labor also confirmed that target date funds serving as default investment alternatives may include annuities among their fixed income investments.  The letter also describes how ERISA fiduciary standards can be satisfied when a plan sponsor appoints an investment manager that selects the annuity contracts and annuity provider to pay the lifetime income.

    1. Torrid Tech’s Explanation:  This repeats the idea the annuities can be included as part of the fixed income portion of target date funds and that a plan can meet its fiduciary standards by having an investment manager selecting which annuity options are offered.

  6. In July, the Treasury Department and IRS issued final rules on the use of longevity annuities – a type of deferred income annuity that begins at an advanced age – in 401(k) plans and IRAs as part of a broader coordinated effort with the Department of Labor to encourage lifetime income and enhance retirement security.

    1. What does this mean for you? The new policy change is another step reflecting the continuing commitment of the Administration to work in a variety of ways to further bolster retirement security and saving.

Here are a few action steps to take advantage of the green-light:

  • employers need to immediately look into changing their 401(k) plans to offer these new annuity options

  • their plan advisor needs to determine which annuities to offer and add them to their options

  • employees need to be educated about these new options, their value, and why they should take advantage of these new annuity options

  • everyone involved needs to monitor the plan to see if these new rules are working in practice, instead of in theory

Source: http://www.treasury.gov/press-center/press-releases/Pages/jl2673.aspx

 

About Torrid Technologies

Torrid Technologies offers a keep it simple retirement planning tool that allows you to hold onto a strong retirement future, even if the powers that be in Washington try to make a grab for it.  You can download a complimentary demo copy from their website at:  http://www.torrid-tech.com

Contact Information:

Torrid Technologies

1860 Sandy Plains Rd.

Suite 204-129

Marietta, GA 30066

770-884-6085

www.torrid-tech.com

miji@torrid-tech.com

###

Senior Citizens League wants more for COLA, three percent they demand

Senior Citizens League wants more for COLA, three percent they demand

Last week the Senior Citizens League released an article demanding a higher COLA in response to the Social Security Administration’s announcement of a 1.7% increase in benefits for retirees.

About $113 Missing from Social Security in 2015, Says The Senior Citizens League.

Only a day after Social Security announced a 1.7 percent cost-of-living increase for beneficiaries in 2015, The Senior Citizens League is calling for a minimum increase of 3 percent, which was the average before 2010. The group’s leader, Ed Cates, says benefits of the typical Social Security recipient will be about $5,298 lower by the end of 2015 due to the government not maintaining at least a 3 percent increase.

Are your a senior? Do you agree? Share your feedback. We’d love to hear from you!

http://www.seniorjournal.com/NEWS/SocialSecurity/2014/20141023_Minimum-Social-Security-COLA-of-Three-Percent-Demanded-by-Senior-Citizens-League.htm

No need to spend 2015 COLA increase on health costs

No need to spend 2015 COLA increase on health costs

Here’s some great news for retirees on fixed budgets that are often stretched by medical expenses. Monthly premiums for Medicare Part B and the related deductible for 2015 will remain the same as in 2013 and 2014, according to a recent announcement from the U.S. Department of Health & Human Services (HHS).

It means retirees won’t have to spend any of the latest cost of living increase (COLA) in Social Security benefits — a 1.7 percent rise — on higher Medicare premiums.

Here Steve Vernon outlines the latest about Medicare and it’s relation to the most recent COLA developments.

In what ways have you spent your COLA in the past? Do you spend it on medical costs? Share your feedback. We’d love to hear from you!

http://www.cbsnews.com/news/medicare-costs-that-wont-be-rising-in-2015

Using your $20-a-month COLA increase to make a difference

The reaction by a lot of retirees last week to the news that their Social Security checks will rise next year by an average of $20 per month amounted to “Thanks for nothing.”

The question is whether they can turn that nothing into something.

Read Chuck Jaffe’s suggestion of how to make a little go a long way…

http://www.marketwatch.com/story/how-to-make-your-20-a-month-cola-increase-make-a-difference-2014-10-27

How much of a percentage increase in COLA would you like to see? Have you noticed or paid much attention to this retirement need-to-know in the past? Share your feedback. We’d love to hear from you!

Torrid Technologies Top Retirement Planning FYI for Generation Millennial

Torrid Technologies Top Retirement Planning FYI for GenerationMillennial

                Torrid Technologies, a retirement planning Software Company, provides alternative millennial generation retirement planning approach; countering popular Pogo-Stick article

Marietta, GA, October 27, 2014 – The recent tumultuous financial headlines, recession, bubble burst PLUS more are just a few reasons why people are panicking in many circles about retirement planning. More recently, a popular media platform released a “Pogo Stick” article  that moved Torrid Technologies to release their number one retirement planning option for the younger generation.. Contrary to what is being widely circulated as ‘retirement planning for the next generation’ Torrid Technologies list their number 1 and very simple FYI that will assist millennials with considering the choices available to them.

For the purpose of informing millennials about their planning options, Torrid Technologies’ composed a simple and less radical way to go about this very important choice. As an alternative approach Torrid Technologies offers the following strategy to the next generation of retirement planners:

Top Retirement Planning FYI for Generation Millennial

Start saving for retirement as soon as you get out of college… YES! It’s that simple!

Now most millennials think that is impossible. But if your employer offers a plan then sign up immediately before your first check if you can… then you never feel like you miss the money.  Your new job will be probably be a windfall compared to college days, so start as soon as you can.  The advantage is that you have a much longer time horizon to save and accumulate.  The effect of compound interest along with ongoing savings creates a powerful snowball effect.

As a way to assist the young and unfamiliar retirement planner along their quest to a secure financial future, Torrid Technologies is offering each new millennial that subscribes to the Individual or Couples edition, access to their Financial Technobabble Translation Guide – a guide to decipher all of the financial terms that most people don’t understand (Including how this helps you avoid making costly money mistakes). To sign up visit www.torrid-tech.com.

About Torrid Technologies

Torrid Technologies offers a keep it simple retirement planning tool that allows you to hold onto a strong retirement future, even if the powers that be in Washington try to make a grab for it.  You can download a complimentary demo copy from their website at:  http://www.torrid-tech.com

Contact Information:

Torrid Technologies

1860 Sandy Plains Rd.
Suite 204-129
Marietta, GA 30066

770-884-6085

www.torrid-tech.com

miji@torrid-tech.com

###

Don’t Touch the Principal — live off the interest…. Why This is Number One of the 5 Giant Myths of Retirement Planning according to Forbes.com

Don’t Touch the Principal — live off the interest…. Why This is Number One of the 5 Giant Myths of Retirement Planning according to Forbes.com

http://www.forbes.com/sites/nextavenue/2014/09/22/5-giant-myths-of-retirement-planning/

Heard of these myths? Tell us your experience and share other myths or misunderstanding you’ve come across related to Retirement Planning.

Wanting to Retire Early? See how Time Money relates maintaining your home to ultimate financial freedom.

Wanting to Retire Early? See how Time Money relates maintaining your home to ultimate financial freedom.

http://time.com/money/3510115/retire-early-most-important-move/

Have you or someone you know experienced this? Tell us about it!

How Long Will Your 401(k) Funds Last In Retirement?

“With pensions increasingly rare and the future of Social Security uncertain, many people rely on their 401(k) plans to provide lifetime income once they retire. The problem with this strategy is that no one knows just how long that lifetime will be.

And that’s not the only thing that’s uncertain when it comes to retirement planning…”

If you’re not sure whether or not your funds will last, skip over to this detailed article where Nancy L Anderson outlines how to plan for a lifetime of income in an uncertain environment.

http://www.forbes.com/sites/nancyanderson/2014/10/09/how-long-will-your-401k-funds-last-in-retirement/

 

Are you a Financial Advisor? Do you blog about investing? Why you must STOP!

Why You Should Stop Blogging About Investing

Blogs are an excellent tool to connect directly to your clients. But don’t write about investing; it’s monotonous and BORING to say the least!!

Here, Megan Elliot tells you WHY and provides you with other options.

We’d love to hear from you. Tell us what you think about Megan’s stop-blogging-about-investment points…

Leave your comments!

http://www.advisorperspectives.com/newsletters14/39-stopblogging.php

Try RetirementView Banner
default-poup