Clients' retirement may be saved by a side hustle

Our daily roundup of retirement news your clients may be thinking about.

Your retirement may be saved by a side hustle
Having a side hustle in the gig economy can help clients who are already retired or are approaching retirement to boost their savings and enhance their prospects, according to this article from the Washington Post. “The gig economy ushered in a new way of working, which in turn has ushered in a new way of retiring,” says online investment firm Betterment, quoted in the article. “Whether they’re full-time gigers or side-hustlers, today’s workers don’t feel they can save enough for retirement,” the article says. “They’re often saddled with debt or lacking traditional employer-sponsored retirement plans, and intend to turn to gig jobs to supplement or even replace traditional retirement savings.”

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An Uber Technologies Inc. logo sits on a smartphone display in this arranged photograph in London, U.K., on Friday, Dec. 22, 2017. Uber will be regulated in European Union countries as a transport company after the bloc's top court rejected its claim to be a digital service provider, a decision that could increase legal risks for other gig-economy companies including Airbnb. Photographer: Chris J. Ratcliffe/Bloomberg

Opinion: Federal government should fix the pension coverage gap
Instead of states establishing their own "Auto IRA" program, a proposal by Congressman Richard Neal, D-Mass., could help address the pension coverage gap among private sector workers, according to this article on MarketWatch from Alicia H. Munnell, director of Boston College Center for Retirement Research. The bill would require companies that have been in business for at least three years and have more than 10 employees to enroll their workers automatically to a 401(k) plan at a 6% contribution rate, writes the expert. "It would be wonderful if the Congress could move on this issue before we well-intentioned fixers create a labyrinth of complicated structures."

Everything clients need to know about target-date funds
Retirement investors are advised to understand how a target-date fund works, including the rules that apply, before investing in the fund, writes an expert on CNBC. "If you decide to invest in a target-date fund, it is important to do some research on the investment company, expense ratios and how the target-date fund is rebalanced throughout the years," writes the expert. "Target-date funds can be good choices for many people, but as with all other investments, they do require an upfront investment of time to determine the best strategy for you."

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These retirement funds may all look alike, but can be very different when it comes to returns, asset allocation and expenses.

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The biggest Social Security mistake you can make
Delaying Social Security benefits actually may not be a smart move for some seniors, as this would force them to deplete their primary sources of income faster and earlier than planned, writes an expert on Kiplinger. Although this strategy would enable seniors to shrink required minimum distributions from tax-deferred accounts and subsequently their tax bill, this move would only benefit retirees if the amount of savings on taxes would be bigger than the taxes they would pay beforehand, writes the expert. "So this strategy should be considered only with the help of a financial adviser and/or tax professional."

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Gig economy Retirement income Social Security Social Security benefits IRAs DB plans
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