Welcome to Retirement Scan, our daily roundup of retirement news your clients may be talking about
Creating an emergency fund and investing in various long-term savings accounts are among the strategies young clients are advised to consider to become financially independent and prepare for retirement, according to this article in CNBC. They are advised to start saving in these accounts as early as possible and contribute enough to their 401(k)s to qualify for their employer's matching contribution. “Do what you can. Just start. If you put these limits on you that, ‘Well I have to be able to do 6% or 10%’, you might not get started. If you can do 1% right now, if you can do $20, that’s something,” an expert says.
Clients are advised to focus more on the risks than on market volatility when building and maintaining their investment portfolio, writes Morningstar's Christine Benz. They should understand that they cannot avoid volatility but can "harness it for [their] benefit," she writes. "Diversifying your portfolio among different asset classes and investment styles can also go a long way toward muting the volatility of an investment that's volatile on a stand-alone basis."
Clients can expect to retire with considerable savings if they have been building their retirement savings consistently over the years, according to this Motley Fool article. They are also likely to retire comfortably if they have defined their savings goals and developed a plan to achieve these targets. Deciding how much of their income will from Social Security can also help them secure their retirement.
There is a significant change in the way Americans view retirement, according to this Forbes article. “Most near-retirees — defined as full-time workers age 45 and up, essentially the members of Generation X — envision a retirement that includes part-time freelance work, citing the gig economy as a way to boost late-life income on their own terms," according to a study by the Empower Institute. "They also view working in the gig economy as a way to pursue another passion.”
Direct indexing, heightened competition and advisor tech platforms were just some of the critical details executives discussed.
Moving 401(k) funds to an IRA can be a smart strategy for clients who want to better manage their retirement assets, according to this article in TheStreet. The IRA transfer will not trigger a taxable event. For pre-retirees who want to transition from growth to income, transferring their 401(k) assets to an annuity is the better option. Aside from guaranteed income in retirement, some annuities also offer tax benefits and are protected in some states from creditors.
