Our daily roundup of retirement news your clients may be thinking about.
Despite the many benefits that IRAs offer, many people do not use them as a retirement saving tool, according to USA Today. Data from the Investment Company institute show only 14% of households made contributions to an IRA. It is a good place for people to put their 401(k) assets with previous employer, and can be also used by teens who want to start building their nest egg. –USA Today
Parents should know that their child may be entitled to Social Security benefits on their record if they are retired, disabled or their spouse is deceased, according to the Motley Fool. To be eligible for Social Security benefits, the child must be below the age of 18, or he or she is 18 and older but a full-time student in elementary or high school. The child also qualifies for Social Security if he or she is 18 or older and became disabled before reaching the age of 22. –Motley Fool
People need to contribute to their IRA regularly to make sure they will have enough savings for their retirement, according to Forbes. While they have made contributions to an IRA, many of them failed to invest the money, preventing their funds to grow by compounding over time. When picking investment options for long-term growth, clients may consider stock funds and diversified funds with market-level risk. –Forbes
Although millennials could end up with bigger retirement savings if they forgo traveling to save and invest the money for a long time for compounding growth, they also need to consider the opportunity cost of saving, according to Forbes. “If you have a choice between a once in a lifetime trip to place XYZ or adding more money to your 401(k), you should choose the former if it’s something you really want,” an expert says. “Everything has a cost, and the cost of saving at the expense of travel is the experience you won’t ever have or get back.” –Forbes
Traditional retirement is a thing of the past as pre-retirees want to continue working and pursue a more active lifestyle in their golden years, according to this article on CNBC. A study found that people who are approaching the traditional retirement age "seek a greater sense of purpose, more intellectual stimulation and increased social engagement and fulfillment." Clients who have a new look at retirement are advised to create a solid financial plan to enable them to secure their golden years. –CNBC
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