Tax Strategy Scan: The RMD delay with fewer consequences

Ways around having to pay as much as a 50 percent penalty, plus, inheriting Roth IRAs, more efficient retirement portfolios, and other highlights from our weekly roundup of tax-related investment strategies and news your clients may be thinking about.

Strategies that can avoid a 50% hit to your client's retirement savings: RMDs can be a drag for the unprepared client and can cost them as much as a 50 percent penalty if they fail to take them. Advisors can point out several options that can provide clients some tax advantages, offer a lifetime stream of income or help them leave a legacy to future generations, according to CNBC. Here's how longevity insurance, munis, 529 contributions and charitable giving can help. -- CNBC

How a Roth IRA conversion can help you pass on more wealth: A recent study shows that Roth IRA conversions can help clients leave a larger legacy to their heirs, according to Money. But determining how beneficiaries come out ahead when they inherit money in tax-deferred or tax-free accounts depends on a number of factors. This includes the client's marginal tax rate when converting savings to a Roth, their heirs' marginal tax rate when they withdraw the funds, how taxes are paid on the conversion, and how long the money remains in the Roth. -- Money

Stock-trader-pensive
A trader works on the floor of the New York Stock Exchange (NYSE) in New York, U.S., on Monday, Nov. 21, 2016. U.S. stocks were set for the highest closing level on record, led by energy companies, as oil jumped on optimism OPEC will agree to cut output. Photographer: Michael Nagle/Bloomberg

Find the right investments for your client's retirement portfolio: Here's a checklist from Morningstar that advisors can use to help clients keep their retirement plans on track. A client's knowledge level, desire to be hands-on, tax status, and tolerance for short-term volatility can help identify the right investments. -- Morningstar

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