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Now might be a good time to save in Roth accounts

Retirees couple retirement by Bloomberg News
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Welcome to Retirement Scan, our daily roundup of retirement news your clients may be talking about.

Now might be a good time to save in a Roth 401(k) or Roth IRA
Contributing to a Roth account makes sense for clients who anticipate higher tax rates in the future, as the distributions won't be taxed in retirement, according to this article in CNBC. However, experts believe that achieving diversification by saving in accounts with different tax treatments can still be a better strategy. “We can’t predict future tax rates, but we can tax-diversify, hedging our bets by dividing savings between Roth and traditional,” an expert says.

One retirement risk you may have overlooked
The sequence of returns risk is one that many clients fail to account for when planning for retirement, according to this article in Kiplinger. To protect themselves, clients are advised to consider using annuities and other products that won't force them to draw money from their portfolios. They should also divide their portfolio into buckets intended to meet specific financial goals.

5 ways to maximize retirement contributions
Clients are advised to take advantage of their employer's 401(k) match to maximize their retirement plans, according to this Motley Fool article. They are also advised to avoid changing jobs if they are not yet fully vested in their current plans. Additionally, it's smart to max out contributions to their 401(k)s and HSAs. Maxing out pre-tax contributions to a traditional IRA could mean a lower tax bill — while funding a Roth IRA will boost after-tax income in retirement.

More often than not, wirehouses were on the losing side of these moves.
December 30

Reduce clients’ taxes with last-minute moves before the end of the year
With a few days before the new year, clients can minimize their 2019 tax bill by maxing out pre-tax contributions to their retirement plans, according to this article in Bankrate. Clients who want to invest in mutual funds are advised to hold the assets in a retirement account to avoid taxable year-end distributions. Those who are in a lower tax bracket should consider selling appreciated investments in non-retirement accounts, as capital gains will be subject to zero tax. “By selling, and realizing the gains, then repurchasing the investment, you would be able to step up your cost basis without paying additional federal tax,” says an expert.

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