Our daily roundup of retirement news your clients may be thinking about.
Clients are advised to review their investment portfolio before and after they retire, according to Kiplinger. “This is where the rubber meets the road,” says a financial planner. “As you get into your fifties, you need to start looking at where you are and start ramping up your retirement and investing planning.” Reducing asset allocation in stocks is not always a good move especially if it would increase the odds of not having enough funds for their living costs and other expenses in retirement. –Kiplinger
A 62-year-old client who experiences a monthly budget shortfall of $250 should consider collecting his Social Security retirement benefits early, according to this article on Yahoo Finance. He would need to withdraw $12,000 from his savings account and give up $33,840 in retirement benefits if he opts to delay the benefits until he turns 66. Also, he will reach the breakeven point when he turns 81, so the option to file early makes a lot of sense. –Yahoo Finance
Based on a study by The American College of Financial Services, many people are unaware that their home equity can be tapped by way of a reverse mortgage to generate an income stream in retirement, according to Forbes. Only 25% of the survey participants knew that the reverse mortgage is a nonrecourse loan, meaning their debt could not go bigger than the home value. Also, a big number of respondents still don't know that a reverse mortgage could be more beneficial if taken earlier and they will qualify for it as soon as they reach the age of 62. –Forbes
Retirement savers who consider including a socially responsible investment fund in their 401(k) plans need to make sure it is truly an SRI fund before they invest in them, according to this article on USA Today. They also should treat SRI funds as satellite funds and evaluate them based on the same parameters they use for other investments. While SRI funds may already be offered in the 401(k) plan's brokerage account, the funds may not be available yet in the plan's investment account.
A new rule issued by the Labor Department that imposes fiduciary standard on financial advisors providing guidance on retirement accounts faces a new lawsuit filed by the American Council of Life Insurers and the National Association of Insurance and Financial Advisors. The rule “is not reasonable and balanced and, even worse, it will harm, not help, American retirement savers, who now, more than ever, need access to the guaranteed lifetime income products,” the groups said. The U.S. Chamber of Commerce, the Financial Services Roundtable and the Securities Industry and Financial Markets Association earlier this week filed a separate lawsuit to challenge the rules.
