MONEY Longevity

Why Only the Super-Rich Will Live to 150

1-5-0 number candles
Jana Leon—Getty Images

Only the 1 percenters will be able to afford the cutting-edge healthcare that will meaningfully extend lifespans, according to a leading expert on longevity.

Could the one percent soon get to live twice as long as the rest of us—maybe even forever?

Immortality may not be in the cards just yet, but exponential breakthroughs in technology and medicine will make possible lifespans of 150 years or more, according to Ken Dychtwald.

Dychtwald, a pioneering expert on gerontology, longevity and how the baby boomer wave will impact society, says dramatically longer lifespans will not necessarily translate into healthier years, and the longevity gains will not be experienced by everyone.

Instead, we are headed toward a one percent phenomenon, with only the very wealthy able to afford the cutting edge healthcare that adds meaningfully to life.

Uneven gains in longevity are nothing new. American men live an average of two years longer than they did in 2000, and women have an additional 2.4 years, according to mortality projections released last year by the Society of Actuaries.

Along with the gender gap, higher-income white-collar workers outlive blue-collar workers by 2.5 years, on average, from age 65. Other research points to a sizable longevity gap by educational attainment and race.

Lifespan tells only part of the story, though.

“We also have people dying longer,” says Dychtwald. “We are able to keep people alive without much quality of life in many cases. We haven’t done a great job of making healthspan match up with lifespan, which is both miserable and unbelievably costly—and frightening.”

The biggest healthspan concern is Alzheimer’s, which strikes at a 47% rate among the over 85 population.

“If we just keep living longer, but we don’t knock out this horrible disease, it will be the sinkhole of the century,” Dychtwald says. “It will take us down – every country. It will be a horror beyond horrors. And how much do we spend for research on this disease? Hardly anything.”

Other debilitating diseases that decrease healthspan include obesity, heart attacks, strokes, cancer and diabetes.

Substantial attempts to extend healthspan through more emphasis on fitness and prevention are coinciding with breakthroughs in pharmaceuticals, stem cell therapies and genetic manipulation.

Dychtwald points to the entry of a new breed of Silicon Valley entrepreneurs with big resources at their disposal.

“The talent migrating into the field is like nothing I’ve seen in my 40 years in the field, and they’re convinced there is nothing you can’t do if you can turn biotechnology into information technology,” he says.

LONGEVITY INC

Craig Venter, one of the first scientists to sequence the human genome, launched a company last year called Human Longevity Inc that plans to apply genetic sequencing to some of the most challenging issues involving aging.

Calico, a company focused on extending lifespans, was launched by Google Inc in 2013. There is also big money chasing longevity from the Facebook, eBay, and Napster fortunes.

A recent headline in The Week magazine summed it up well: “How Silicon Valley’s billionaires are trying to defy death.”

The new research money is largely private and unregulated. The big breakthroughs will be very expensive and available only to the very wealthy, at least initially.

“There will be breakthroughs in the next 15 or 20 years that will have to do with aging itself—actually stopping the biological clock,” says Dychtwald. “And I think that really rich people are going to get access to it, people who are willing to spend almost unlimited sums of money. Imagine a time when ten thousand really rich people get to live forever, or not have to get dementia.”

Those remarkable medical advances will become more widely available and affordable over time, Dychtwald says.

“But in the meantime, there will be a whole lot of people ailing and suffering,” he warns.

MONEY Best Places

See How Your Neighborhood Ranks As a Place to Age

Powell & Mason Cablecar Line, Taylor Street, Fishermans Wharf, San Francisco
David Wall—Alamy Fisherman's Wharf, San Francisco

Use this tool to see how livable your town or city is for retirees.

Should you stay or should you go? That will be a key question in an aging America, as people try to decide if their homes and communities still work for them as they grow old.

A new online tool from AARP can help with answers. The free Livability Index grades every neighborhood and city in the United States on a zero-to-100 scale as a place to live when you are getting older.

There is no shortage of lists and rankings of places to live in retirement. Many are superficial, measuring factors such as sunshine, low tax rates or the number of golf courses. More thoughtful studies reframe the question to consider quality-of-life issues that affect everyone—affordability, health care, public safety, public transportation, education and culture (See Reuters’ version at reut.rs/13Bcl4h).

The new AARP tool adds value by making it possible to score any neighborhood and community in the country – and drill down into the details. Just plug in an address to see how a location scores for seven key attributes: housing, neighborhood, transportation, environment, health, civic engagement and opportunity.

Overall, the highest-ranking large city is San Francisco with a score of 66 and rose to the top due to its availability and cost of public transportation, walkability and overall levels of health. The top medium city is Madison, Wisconsin (68) and the top small town is La Crosse, Wisconsin (70).

It is telling that even the top-ranked locations get just mediocre scores. “The numbers are telling us that no community is perfect – and most are far from perfect,” says Rodney Harrell, director of livable communities at the AARP Public Policy Institute. “The goal here is to provide a tool that helps people make their communities better.”

The timing is right for discussions to get under way about making communities better places to age. The number of households headed by someone age 70 or older will surge 42% by 2025, according to the Joint Center for Housing Studies of Harvard University. Most of those households will be aging in place, not downsizing or moving to retirement communities.

What exactly is aging in place? The Centers for Disease Control and Prevention defines it as “the ability to live in one’s own home and community safely, independently, and comfortably, regardless of age, income or ability level.”

Of course, that definition does not oblige you to age in your current place. The smart move is to assess your current location – and make a move if necessary.

That is the plan recommended by gerontologist Stephen M. Golant in his new book Aging in the Right Place (Health Professions Press, February 2015).

He challenges the orthodoxy about aging in place, explaining why it is not always realistic to stay where you are. In particular, he makes the case that a home must get a cold-eyed assessment as a financial asset, with an eye toward the cost of living in it (mortgage, taxes, and insurance) and any possible repairs or remodeling that might be needed to adapt the home as you age.

But that can be a tall order, considering the emotional ties to place that we all develop.

“It’s one of the biggest issues people face, and they don’t have a lot of information about these issues,” Harrell says. “People do build emotional ties to friends and community, but they also need information to help them make sound choices.”

MONEY Social Security

This Little-Known Pension Rule May Slash Your Social Security Benefit

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Gallery Stock

If you are covered by a public sector pension, you may not get the Social Security payout you're expecting.

Some U.S. workers who have paid into the Social Security system are in for a rude awakening when the checks start coming: Their benefits could be chopped up to $413 per month.

That is the maximum potential cut for 2015 stemming from the Windfall Elimination Provision (WEP), a little-understood rule that was signed into law in 1983 to prevent double-dipping from both Social Security and public sector pensions. A sister rule called the Government Pension Offset (GPO) can result in even sharper cuts to spousal and survivor benefits.

WEP affected about 1.5 million Social Security beneficiaries in 2012, and another 568,000 were hit by the GPO, according to the U.S. Social Security Administration (SSA). Most of those affected are teachers and employees of state and local government.

These two safeguards often come as big news to retirees. Until 2005, no law required that affected employees be informed by their employers. Even now, the law only requires employers to inform new workers of the possible impact on Social Security benefits earned in other jobs.

The Social Security Administration’s statement of benefits has included a generic description of the possible impact of WEP and GPO since 2007; for workers who are affected, the statement includes a link is included to an online tool where the impact on the individual can be calculated. People who have worked only in jobs not covered by Social Security get a letter indicating that they are not eligible.

Many retirees perceive the two rules as grossly unfair. Opponents have been pushing for repeal, so far to no effect.

Why WEP?

To understand the issue, you need to understand how Social Security benefits are distributed across the wealth spectrum of wage-earners.

The program uses a progressive formula that aims to return the highest amount to the lowest-earning workers—the same idea that drives our system of income tax brackets.

It is a complex formula, but here is the upshot: Without the WEP, a worker who had just 20 years of employment covered by Social Security, rather than 30, would be in position to get a much higher return because of those brackets.

Where is the double dip? The years in a job covered by a pension instead of Social Security.

“If you had worked in non-covered employment for a significant portion of your career, there should be a shared burden between the pension you receive from that period of your employment and from Social Security in providing your benefit,” says SSA Chief Actuary Stephen C. Goss. “Just because a person worked only a portion of their career with Social Security-covered employment, they should not be benefiting by getting a higher rate of return.”

If you are already receiving a qualifying pension when you file for Social Security, then the WEP formula kicks in immediately. The SSA asks a question about non-covered pensions when you file for benefits, and it also has access to the Internal Revenue Service Form 1099-R, which shows income from pensions and other retirement income.

If your pension payments start after you file, the adjustment will occur then.

If you have 30 years of Social Security-covered employment, no WEP is applied. From 30 to 20 years, a sliding WEP scale is applied. Below 20 years, your benefit would drop even more. (For more information, click here.)

How does this affect your checks? The SSA offers this example: A person whose annual Social Security statement projects a $1,400 monthly benefit could get just $1,000, due to the WEP.

Your maximum loss is set at 50% of whatever you receive from your separate pension, so if that is relatively small, the WEP effect will be minimal.

You can still earn credits for delayed filing, and you will still get Social Security’s annual cost-of-living adjustment for inflation, but the WEP will still affect your initial benefit.

The WEP formula also affects spousal and dependent benefits during your lifetime. However, if your spouse receives a survivor benefit after your death, it is reset to the original amount.

Can you do anything to avoid getting whacked by WEP? Working longer in a Social Security-covered job before retiring might help. Remember, you are immune to the provision if you have 30 years of what Social Security defines as “substantial earnings” in covered work. That amounts to $22,050 for 2015.

So if you have 25 years, try to work another five, says Jim Blankenship, a financial planner who specializes in Social Security benefits. “That’s money in your pocket.”

Read next: The Pitfalls of Claiming Social Security in a Common-Law Marriage

Update: This story was updated to reflect that Social Security Administration gives little advance warning to beneficiaries, instead of no advance warning, and a description of Social Security benefits statements was added.

MONEY retirement income

Why Are States Leaving Billions in Retiree Income on the Table?

Many elderly can afford to pay more in taxes. And with a growing number of needy seniors to support, states can't afford to pass up that revenue.

Illinois is the national poster child for state budget messes. My home state faces a $7.4 billion general fund deficit and a $12 billion revenue shortfall. One proposed idea for plugging at least part of the horrific shortfall: tax retirement income. But our new governor, Republican Bruce Rauner, has rejected the idea.

Illinois exempts all retirement income from state taxes—Social Security, private and public pensions, and annuities. We’re leaving $2 billion on the table annually, according to the state’s estimates. And we’re hardly alone: 36 states that have an income tax allow some exemption for private or public pension benefits, and 32 exempt all Social Security benefits from tax, according to the Institute on Taxation and Economic Policy (ITEP). States currently considering wider income tax exemptions for seniors include Rhode Island and Maryland.

With the April 15 tax day just around the corner, it’s a timely moment to ask: What are these politicians thinking?

Income tax exemptions date back to a time when elderly poverty rates were much higher than they are today (federal taxation of Social Security began in the 1980s). As recently as 1970, almost 25% of Americans older than 65 lived in poverty, according to the Census Bureau; now it’s around 9%. Today, it still makes sense to tread lightly on vulnerable lower-income seniors, many of whom live hand to mouth trying to meet basic expenses. And the number of vulnerable seniors is on the rise.

MORE SENIORS

But much of the benefit of state retirement income exemptions goes to affluent elderly households. The cost of these exemptions is high, and it’s going to get higher as our population ages. In llinois, the number of senior citizens is projected to grow from 1.7 million in 2010 to 2.7 million by 2030. That points to a demographic shift that will mean a shrinking pool of workers will be funding tax breaks for a growing group of retirees.

So there’s a real need for states to target these tax breaks to seniors who really need them. Yet one of the plans floated in Rhode Island would exempt all state, local and federal retirement income, including Social Security benefits—from the state’s personal income tax. The Social Security proposal is an especially good example of a poorly targeted break.

Currently, Rhode Island uses the federal formula for taxing Social Security, which already protects low-income seniors from taxes. Under the federal formula, beneficiaries with income lower than $25,000 ($32,000 for couples) are exempt from any tax (income here is defined as adjusted gross plus half of your Social Security benefit). Up to 50% of benefits are taxed for beneficiaries with income from $25,000 to $34,000 ($32,000 to $44,000 for married couples). For seniors with incomes above those levels, up to 85% of benefits are taxed.

If Rhode Island decides to exempt all Social Security income from taxation, more than half of the benefit will flow to the wealthiest 20 percent of taxpayers, according to an ITEP analysis.

“The poorest seniors in Rhode Island wouldn’t get a dime from this change, because they already don’t pay state taxes on Social Security,” says Meg Wiehe, ITEP’s state tax policy director.

WORKING LONGER

Another tax fairness issue is inequitable treatment of older workers and retirees. The percentage of older workers staying in the labor force beyond traditional retirement age is rising—and many of them are sticking around just to make ends meet. Those workers are bearing the full state income tax burden, effectively subsidizing more affluent retired counterparts.

Some tax-cut advocates might argue that breaks for seniors will help retain or attract residents to their states. But numerous studies show that few seniors move around the country for any reason at all. Just 50% of Americans age 50 to 64 say they hope to retire in a different location, according to a recent survey by Bankrate.com, and the rate drops to 20% for people over 65.

For those who do move, taxes are a consideration—but not the only one.

“A lot of factors go into the decision,” says Rocky Mengle, senior state analyst at Wolters Kluwer, Tax & Accounting US. “Climate, proximity to family and friends are all very important, along with the overall cost of living. But I’d certainly throw taxes into the mix as a consideration.”

Smart tax policy makers and politicians should take all these factors into consideration—especially in states that are facing crushing deficits and debt burdens. Targeted exemptions for vulnerable seniors make sense, but the breaks should be affluence-tested.

“The scales would vary state to state,” says Wiehe. “But a test that makes sure taxation isn’t a blanket giveaway with most of it going to the most affluent households.”

Indeed. In the golden years, not all the gold needs to go to the rich.

Read next: 1 in 3 Older Workers Likely to Be Poor, or Near Poor, in Retirement

MONEY Health Care

Proposed Medicare ‘Doc Fix’ Comes at a Cost to Seniors

A measure designed to head off big cuts in payments to doctors asks Medicare recipients to foot part of the bill.

Congress is headed toward a bipartisan solution to fix a Medicare formula that threatens to slash payments to doctors every year. The so-called “doc fix” would replace the cuts with a multipronged approach that will be expensive and will have Medicare beneficiaries pay part of the bill.

Congress has repeatedly overridden the payment cuts, which are mandated under a formula called the Sustainable Growth Rate (SGR), which became law in 1997, that is a way of keeping growth in physician payments in line with the economy’s overall growth. This year, unless Congress acts, rates will automatically be slashed 21 percent.

In a rare instance of bipartisan collaboration, House Speaker John Boehner and Minority Leader Nancy Pelosi are pushing a plan to replace the SGR with a new formula that rewards physicians who meet certain government standards for providing high quality, cost-effective care. If they can get the plan through Congress, President Barack Obama has said he will sign it.

The fix will cost an estimated $200 billion over 10 years. Although Congress has not figured out how to pay the full tab, $70 billion will come from the pocketbooks of seniors.

There are better places to go for the money, such as allowing Medicare to negotiate drug prices with pharmaceutical companies and tightening up reimbursements to Medicare Advantage plans. But there’s no political will in Congress for that approach.

And the doc fix needs to be done. Eliminating the SGR will greatly reduce the risk that physicians will get fed up with the ongoing threat of reduced payments and stop accepting Medicare patients. “Access to physicians hasn’t been a big problem, but if doctors received a 21 percent cut in fees, that might change the picture,” says Tricia Neuman, senior vice president and director of the Program on Medicare Policy at the Kaiser Family Foundation.

Here’s what the plan would cost seniors:

Medigap reform

Many Medicare enrollees buy private Medigap policies that supplement their government-funded coverage (average annual cost: $2,166, according to Kaiser). The policies typically cover the deductible in Part B (outpatient services), which is $147 this year, and put a cap on out-of-pocket hospitalization costs.

Under the bipartisan plan, Medigap plans would no longer cover the annual Part B deductible for new enrollees, starting in 2020, so seniors would have to pay it themselves. Current Medigap policyholders and new enrollees up to 2020 would be protected.

The goal would be to make seniors put more “skin in the game,” which conservatives have long argued would lower costs by making patients think twice about using medical services if they know they must pay something for all services they use.

Plenty of research confirms that higher out-of-pocket expense will reduce utilization, but that doesn’t mean the reform will actually save money for Medicare.

Numerous studies show that exposure to higher out-of-pocket costs results in people using fewer services, Neuman says. If seniors forgo care because of the deductible, Medicare would achieve some savings. “The hope is people will be more sensitive to costs and go without unnecessary care,” she says. “But if instead, some forgo medical care that they need, they may require expensive care down the road, potentially raising costs for Medicare over time.”

High-income premium surcharges

Affluent enrollees already pay more for Medicare. Individuals with modified adjusted gross income (MAGI) starting at $85,000 ($170,000 for joint filers) pay a higher share of the government’s full cost of coverage in Medicare Part B and Part D for prescription drug coverage. This year, for example, seniors with incomes at or below $85,0000 pay $104.90 per month in Part B premiums, but higher income seniors pay between $146.90 and $335.70, depending on their income.

The new plan will shift a higher percentage of costs to higher-income seniors starting in 2018 for those with MAGI between $133,500 and $214,000 (twice that for couples). Seniors with income of $133,000 to $160,000 would pay 65 percent of total premium costs, rather than 50 percent today. Seniors with incomes between $160,000 and $214,000 would pay 80 percent rather than 65 percent, as they do today.

Everyone pays more for Part B

Under current law, enrollee premiums are set to cover 25 percent of Medicare Part B spending, so some of the doc fix’s increased costs will be allocated to them automatically. Neuman says a freeze in physician fees is already baked into the monthly Part B premium for this year, so she expects the doc fix to result in a relatively modest increase in premiums for next year, although it’s difficult to say how much because so many other factors drive the numbers.

MONEY Pensions

Here’s a New Reason to Think Twice About Trading In Your Pension

More workers are being offered lump-sum pension buyouts. But the information packets they receive leave out crucial details, a GAO study finds.

If you are due a pension from a former employer, there is a good chance you were or soon will be offered a lump-sum payment in exchange for giving up that guaranteed monthly check for life.

Should you take it? Probably not, but making a smart decision depends on a complex set of assumptions about future interest rates, possible rates of market returns and your longevity. It is a tough analysis unless you have an actuarial background.

Unfortunately, employers are not providing enough information.

That is the conclusion of a recent review by the U.S. Government Accountability Office of 11 lump-sum-offer information packets provided to beneficiaries by pension plan sponsors.

The key failings included unclear comparisons of the lump sum’s value compared with the value of lifetime pension payouts. Also lacking were many of the explanations of mortality factors and interest rates used to calculate the lump sums.

Even more worrisome was missing information about the insurance guarantees that probably would be available to participants from the Pension Benefit Guarantee Corp in the event of a sponsor default.

That is a major problem because fear of pension failure is one of the biggest factors driving participants to accept lump-sum offers. Having PBGC insurance is like having your bank deposits guaranteed by the Federal Deposit Insurance Corp; if a plan fails, most workers receive 100% of the benefits they have earned up to that point.

The GAO did find that the packets were in compliance with the Internal Revenue Service rules on disclosures to employees. However, it urged the U.S. Department of Labor to tighten reporting requirements on lump-sum offers and to work with other federal agencies to clarify the guidance sponsors should be providing.

Better information certainly would be helpful to beneficiaries as the lump-sum trend continues to grow.

Private sector pension plans are trying to lower their risk that recipients will live longer and therefore collect more than the actuaries originally planned.

Twenty-two percent of sponsors say they are “very likely” to make lump-sum offers to former, vested workers this year, up from 14% in 2014, according to a study by Aon Hewitt, the employee benefit consulting firm.

But better information alone is not likely to lead to better decisions,” says Norman Stein, a law professor at Drexel University and an expert on pension law.

Beneficiaries often make up their minds based on emotional factors like fear of a pension plan default or the appeal of getting a large pile of cash up front, says Steve Vernon, an actuary and consulting research scholar at the Stanford Center on Longevity.

In most cases, beneficiaries will come out ahead by sticking with a monthly check from a pension, but you should evaluate the lump-sum offer against such factors as your likely life expectancy and other sources of guaranteed income (Social Security or a spouse’s pension).

Some beneficiaries accept lump sums expecting to get better returns by investing the proceeds. But an apples-to-apples comparison requires measuring the rate of return used to calculate your lump sum against risk-free investments like certificates of deposit or Treasuries. After all, most private-sector pensions are a guaranteed income source backed by the U.S. government.

You could also take the lump sum and buy an annuity, but these commercial products typically will generate 10% to 30% less income than your pension, Vernon says.

“A good measure of the lump sum offer is to calculate how much it would cost you to buy that annuity from an insurance company,” he says.

You can get an estimate of a lump-sum conversion at ImmediateAnnuities.com. Vanguard offers an annuity marketplace for its customers.

But Vernon has a more basic way to think about a lump-sum decision.

“Just the fact that employers call this ‘pension risk transfer’ should give you pause,” he says. “These big corporations want to transfer mortality and interest risk to you because they don’t want it.

“Ask yourself: ‘Why should I take something my employer doesn’t want?'”

Read next: Here’s How to Tell If You’re Saving Enough for Retirement

MONEY Getting Ahead

How to Learn to Love Your Job Again When You’re Feeling Burned Out

"There are things you can do to find joy around the edges," says career expert Kerry Hannon.

If you are counting the days to retirement because you hate your job, career expert Kerry Hannon has a message for you: “Stick with it.”

Burnout is one of the biggest problems in the workplace, especially for older workers. An annual survey on retirement by the Employee Benefit Research Institute consistently finds that about half of workers retire earlier than they expected—and that job burnout is a key factor.

But sticking it out is important to retirement security, Hannon says in her new book Love Your Job: The New Rules for Career Happiness. These are usually the highest-earning years of your career, she argues. And staying employed helps with everything from retirement account contributions to enabling a delayed filing for Social Security benefits.

Reuters asked Hannon for her tips on how older workers can stay engaged and on the job:

Q: Why is the idea of “falling in love with your job” important for older workers nearing retirement?

A: The people I interview have this palpable fear about outliving their money. They want to find work—full- or part-time. But even with the improved economy, if you’re over 50 and looking for work, it’s still hard—it takes almost 30 months longer to find a job than it does for younger people; ageism is still rampant. So, if you have a job, for gosh sakes, you should hang on to it.

Q: But what if your job is really awful?

A: There still are things you can do to find some joy around the edges—to make the job come alive for you. But it might not be specific to the job. Then, if you really need to make a change, by all means do so, but don’t leave your current job until you have a new one.

Q: What are some examples of finding “joy around the edges?”

A: Perhaps you don’t love what you do, but you do really like your co-workers or the mission of the organization. It might be the challenge of learning something new, or working from home—the things that circle around the job itself.

Extracurriculars tied to the job are one good way to get re-engaged. Many companies offer the opportunity to do volunteer work right within the organization. If you can find a volunteer gig through your employer, that can help build relationships with co-workers and bonds across departments that you might never have had otherwise. And it gets you out of your own head and gives you perspective on the needs of others.

A couple examples that I mention in the book: The National Institutes of Health has its own orchestra that plays gigs at assisted living centers and hospices. Marsh & McLennan Companies Inc has an employee choir.

You might find it by telecommuting. Research shows that telecommuting employees are happier, more loyal and have fewer absences. If you don’t have a boss hovering over you, that can give you a sense of flexibility about getting your work done.

Q: How about learning to love the job itself?

A: Learning a new work-related skill can be key. When you learn something new, your brain shifts. If your employer sponsors workshops or skill-based learning, they may not think of offering it to you if you’re older than 50 – but you can raise your hand and ask for it.

Q: How do life values change as we get older, and how does that affect the way we relate to our jobs?

A: When we are younger, our work is our life on so many levels. In your twenties and thirties, your social friends usually are your work friends. Your identity is tied up in who you are and your job. And, we are establishing ourselves in our fields.

But as we age we have families and more outside interests. In your fifties, you probably aren’t pushing your way up the ladder, perhaps even doing something that wasn’t your primary career. So, work loses its emphasis, but you want those hours to be fulfilling.

More from Money.com:

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This One Question Can Show You If You’re Smarter Than Most U.S. Millennials

MONEY IRAs

There’s Free Money for IRA Rollovers—Here’s How to Invest It

Should you take the money and run? Only if you choose the right low-cost funds.

Back in the day, you could walk into a bank to open a new account and walk out with a free toaster.

Today, you can get anywhere from $50 to $2,500 for rolling over a 401(k) into an Individual Retirement Account, or just by moving an IRA from another financial institution.

But since banks are not in the habit of giving away money, you need to ask: What is the catch?

IRA providers use cash incentives, which are cheaper than advertising or direct mail, to acquire new customers. The latest marketing twist comes from Fidelity Investments, which is offering an “IRA Match” program to new and existing customers who transfer a Roth, traditional or rollover IRA to the company. Rollovers from 401(k)s are not eligible.

Fidelity will match your contributions up to 10% for the first three years that the account is open, although you would have to roll over a whopping $500,000 or more to get that level of match.

For most people, the match will be much smaller. A rollover of $50,000, for example, would qualify for a 1.5% match in each of the next three years. That is worth $260 over three years if you max out your annual contributions at $5,500, or $290 if you are over age 50 and eligible to make additional $1,000 catch-up contributions.

Fidelity is pitching this as the way to encourage higher levels of retirement savings, the way many employers make matching contributions to workers’ 401(k) plans.

“When you look at what really works in the retirement space, you can see that the employer match is a major factor driving participation,” says Lauren Brouhard, Fidelity Investments’ senior vice president for retirement. “We wanted to take an element of what works in the workplace and bring it to the IRA.”

Similar deals abound. For example, Charles Schwab Corp frequently runs promotions offering up to $2,500 for opening a new account, including rollovers from 401(k)s. Ally Bank will pay a $100 bonus for rolling between $25,000 and $50,000, and more for larger rollovers. Just do a Web search for “IRA cash bonus” to see how pervasive the practice has become.

Should you take the money and run? Perhaps, but do not let the cash distract you from more fundamental considerations.

For starters, do not roll funds out of a workplace 401(k) plan into an IRA if it charges higher fees. You should also make sure that the new provider offers the type of retirement investments you are looking for.

If you are rolling over to a mutual fund or brokerage company, the cardinal rule is to make sure your new provider does not earn back the bonus by parking you in high-cost active mutual funds or managed portfolio services.

“It’s a free lunch, but not if you yield to the temptations,” says Mitch Tuchman, managing director of Rebalance IRA, a wealth management firm that offers low-cost IRA portfolio management. “You have to avoid falling prey to the sirens of active management.”

Instead, manage your portfolio yourself by creating a portfolio of inexpensive passive index funds or exchange traded funds, which are available through their providers’ brokerage services.

To illustrate, he suggested a portfolio of four Vanguard ETFs whose fees are each below 20 basis points: Total U.S. Stock Market, Total International stocks, Total Bond Market and Total International Bond.

You can view Tuchman’s sample portfolios here.

Read next: 5 Signs You Will Become a Millionaire

MONEY financial advisers

Proposed Retiree Safeguard Is Long Overdue

businessman putting money into his suit jacket pocket
Jan Stromme—Getty Images

The financial-advice regulations pushed by the Obama administration will save retirees, on average, an estimated $12,000.

When you are planning for retirement and ask for advice, whose interest should come first — yours or the financial expert you ask for help?

That is the question at the heart of a Washington debate over the unsexy-sounding term “fiduciary standard.” Simply put, it is a legal responsibility requiring an adviser to put the best interest of a client ahead of all else.

The issue has been kicking around Washington ever since the financial crisis, and it took a dramatic turn on Monday when President Barack Obama gave a very public embrace to an expanded set of fiduciary rules. In a speech at AARP, the president endorsed rules proposed by the Department of Labor that would require everyone giving retirement investment advice to adhere to a fiduciary standard.

The president’s decision to embrace and elevate fiduciary reform into a major policy move is huge.

“The White House knows that this is the most significant action it can take to promote retirement security without legislation,” said Cristina Martin Firvida, director of financial security and consumer affairs at AARP, which has been pushing for adoption of the new fiduciary rules.

Today, financial planning advice comes in two flavors. Registered investment advisors (RIAs) are required to meet a fiduciary standard. Most everyone else you would encounter in this sphere — stockbrokers, broker-dealer representatives and people who sell financial products for banks or insurance companies — adhere to a weaker standard where they are allowed to put themselves first.

“Most people don’t know the difference,” said Christopher Jones, chief investment officer of Financial Engines, a large RIA firm that provides fiduciary financial advice to workers in 401(k) plans.

The difference can be huge for your retirement outcome. A report issued this month by the President’s Council of Economic Advisers found that retirement savers receiving conflicted advice earn about 1 percentage point less in returns, with an aggregate loss of $17 billion annually.

The report pays special attention to the huge market of rollovers from workplace 401(k)s to individual retirement accounts — transfers which often occur when workers retire. Nine of 10 new IRAs are rollovers, according to the Investment Company Institute mutual fund trade group. The CEA report estimates that $300 billion is rolled over annually, and the figures are accelerating along with baby-boom-generation retirements.

The CEA report estimates a worker receiving conflicted advice would lose about 12% of the account’s value over a 30-year period of drawdowns. Since the average IRA rollover for near-retirees is just over $100,000, that translates into a $12,000 loss.

What constitutes conflicted advice? Plan sponsors — employers — have a fiduciary responsibility to act in participants’ best interest. But many small 401(k) plans hire plan recordkeepers and advisers who are not fiduciaries. They are free to pitch expensive mutual funds and annuity products, and industry data consistently shows that small plans have higher cost and lower rates of return than big, well-managed plans.

The rollover market also is rife with abuse, often starting with the advice to roll over in the first place. Participants in well-constructed, low-fee 401(k)s most often would do better leaving their money where it is at retirement; IRA expenses run 0.25 to 0.30 percentage points higher than 401(k)s, according to the U.S. Government Accountability Office. Yet the big mutual fund companies blitz savers with cash come-ons, and, as I wrote recently, very few of their “advisers” ask customers the basic questions that would determine whether a rollover is in order.

The industry makes the Orwellian argument that a fiduciary standard will make it impossible for the industry to offer cost-effective assistance to the middle class. But that argument ignores the innovations in technology and business practices that already are shaking up the industry with low-cost advice options.

How effective will the new rules be? The devil will be in the details. Any changes are still a little far off: TheDepartment of Labor is expected to publish the new rules in a few months — a timetable that already is under attack by industry opponents as lacking a duly deliberative process.

Enough, already. This debate has been kicking around since the financial crisis, and an expanded fiduciary is long overdue.

MONEY Social Security

Why a Better Job Market Can Mean a Social Security Bonus

Getting back to work for even a few years before you retire can make a big difference to your income.

More Americans over 55 are finally getting back to work after the long recession. The strong national employment report for January released last week confirmed that. The unemployment rate for those over 55 was just 4.1% in January, down from 4.5% a year ago and well below the national jobless rate. The 55-plus labor force participation rate inched up to 40% from 39.9%.

That is good news for patching up household balance sheets damaged by years of lost employment and savings, and also for boosting future Social Security benefits.

Social Security is a benefit you earn through work and payroll tax contributions. One widely known way to boost your monthly benefit amount is to work longer and delay your claiming date. But simply getting back into the job market can help.

Your Social Security benefit is calculated using a little-understood formula called the primary insurance amount (PIA). The PIA is determined by averaging together the 35 highest-earning years of your career. Those lifetime earnings are then wage-indexed to make them comparable with what workers are earning in the year you turn 60, using a formula called average indexed monthly earnings (AIME); finally, a progressivity formula is applied that returns greater amounts to lower-income workers (called “bend points”).

But what if you are getting close to retirement age and have less than 35 years of earnings due to joblessness during the recession?

The Social Security Administration still calculates your best 35 years. It just means that five of those years will be zeros, reducing the average wage used to calculate your PIA.

By going back to work in any capacity, you start to replace those zeros with years of earnings. That helps bring your average wage figure up a bit, even if you are earning less than in your last job, or working part time.

“Any earnings you have in a given year have the opportunity to go into your high 35,” notes Stephen C. Goss, Social Security’s chief actuary.

I ran the numbers for a an average worker (2014 income: $49,000) born in 1953, comparing PIA levels following 40 years of full employment with the benefit level assuming a layoff in 2009. The fully employed worker enters retirement at age 66 (the full retirement age) with an annual PIA of $20,148; the laid-off worker’s PIA is reduced by $924 (4.6%). Getting back into the labor force in 2014, and working through 2015, would restore $720 of that loss.

That might not sound like much, but it would total nearly $25,000 in lifetime Social Security benefits for a female worker who lives to age 88, assuming a 3% annual rate of inflation. And for higher income workers, the differences would be greater.

You also can continue “backfilling” your earnings if you work past 60, Goss notes. “You get credit all the way along the way. If you happen to work up to age 70 or even beyond, we recalculate your benefit if you have had more earnings.”

The timing of your filing also is critical. You’re eligible to file for a retirement benefit as early as age 62, but that would reduce your PIA 25 percent, a cut that would persist for the rest of your life. Waiting until after full retirement age allows you to earn delayed filing credits, which works out to 8% for each 12-month period you delay. Waiting one extra year beyond normal retirement age would get you 108% of your PIA; delaying a second year would get you 116%, and so on. You can earn those credits up until the year when you turn 70, and you also will receive any cost-of-living adjustment awarded during the intervening years when you finally file.

Getting back to work will be a tonic for many older Americans, but what they might not realize is that it is also a great path to filling their retirement gap with more robust Social Security checks.

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