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Multiyear tax planning may help stretch retirement savings

Welcome to Retirement Scan, our daily roundup of retirement news your clients may be talking about.

Multiyear tax planning could help clients stretch their retirement savings
Engaging in a multiyear tax planning strategy allows clients to save on taxes and make the most of the tax brackets under the current tax law, a CFP writes in Kiplinger. Clients are advised to think of the years as empty buckets and keep the amount of income into each bucket level per year. “If you put too much in one year, you might be climbing into a higher bracket and paying more tax. If you put too little in another bucket, you’re not taking full advantage of all the money that can go into the lower tax bracket for that year,” the advisor explains.

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What makes retirees happy?
Social spending is crucial to people’s satisfaction in retirement, an expert says in this article from Morningstar. “[T]he happiest retirees are the ones who are careful about maintaining opportunities for social interaction,” he says. “Building long-lasting close friendships is an investment. It takes time, it takes effort. But the payoff is that those friendships become even more important in retirement than they were before retirement.”

Why is it still so hard for women to save for retirement?
While retirement saving is tougher for women than for men because of income inequality, millennial women’s savings behavior prevents them from economizing as much as their male counterparts, according to this article in MarketWatch. An expert says millennial women should start saving in their retirement plans as early as possible and take advantage of the employer match, contributing at least 15% of their income. “When you’re starting out, you probably can’t do all of that, and that’s OK, you can start at a lower amount, and ramp that up over time. The greatest asset you have is time. And that compounded growth can really be magic,” explains the expert.

From public service to operating a craft brewery, planners are keeping busy outside the office.
January 2

7 ways to lower clients’ retirement income risk
Including annuities in the portfolio is one way for clients to reduce their retirement income risk, according to this article in U.S. News & World Report. That’s because these financial products can protect retirees against the sequence of return risk at the beginning of retirement. Dividend investing, variable withdrawal plan, the bucket strategy and maximizing Social Security benefits are also other ways for clients to boost their financial prospects in retirement, according to the article.

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