When it comes to investing, it pays to keep it simple
Clients who intend to invest in the long term are better off making their portfolio simple, transparent and diversified, according to this article on MarketWatch. A simple portfolio has a fixed allocation of stocks, Treasury securities and bonds that is rebalanced on a periodic basis. Being transparent means investors can explain and understand their portfolio's assets and also know the daily prices of these investments. --MarketWatch
Student loans getting in the way of retirement
Student loan debt is affecting the ability of many Americans to save for retirement, according to this article on CBS News. Graduates incurred a student loan debt of $35,000 on average, and this means losing almost $700,000 in retirement savings over five decades, according to a study. "Your fate is you're not going to retire until your 75, which is pretty sobering," said NerdWallet's Farnoosh Torabi. --CBS News
Why market timing is especially bad for retirees
Retirement investors should adopt the buy-low and sell-high strategy to secure substantial returns from their investments, and they need to avoid market timing because it is a risky move, according to this article in U.S. News & World Report. Timing the market could result in a wrong decision that could affect their retirement plans and could mean a hefty tax cost. Also, market timing requires a lot of time from investors, can be stressful and no longer feasible as they age. --Yahoo Finance
Will the 4% rule work for your clients?
New retirees may consider tapping their nest egg at a withdrawal rate higher than the recommended 4% rule if they believe they will have 20 years to live, according to this article on CNNMoney. The 4% rule will enable retirement savings to last for three decades, and adopting the rule may not make sense if the client suffers from a serious or terminal illness and is not expected to live for 30 more years. Based on data the Society of Actuaries, an average 65-year-old man could expect 21 to 22 more years to live, while a 65-year-old woman could live for 23 to 24 more years. --CNNMoney
The fake fix for disability insurance
While lawmakers lauded the new budget law that includes provisions aimed at fixing Social Security's financial woes, the new law will not address the program's disability insurance, writes Andy Koenig, senior policy adviser at Freedom Partners Chamber of Commerce. The law only "tweaks the soon-to-be-bankrupt Social Security Disability Insurance program—but only shaves off between 1% and 1.5% of the program’s long-term shortfall," Koenig writes. "All Congress really did was delay insolvency by siphoning money from the rest of Social Security. Put another way, lawmakers “solved” the problem by bailing out one failing program with money from another failing program." --The Wall Street Journal
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