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

A different kind of diversification pays off for retirees
Clients will be better off using the income allocation strategy than the asset allocation approach when building a retirement portfolio, writes an investment adviser on Kiplinger. Income allocation enables clients to develop a plan consisting of different steady income streams in retirement, and a study has found that it results in larger income, reduced volatility and greater economic returns compared with asset allocation, writes the expert. Income allocation also boosts after-tax income by 50% while reducing income volatility from 69% to 19%.

Source: Bloomberg News


Retirement mistakes to avoid when changing jobs
Workers who plan to switch jobs should consider the vesting schedule of their prospective employer's 401(k) plan aside from the matching contribution it offers before making a decision, according to this article on Fox Business. That's because they may lose all or a portion of their employer's financial contributions if they resign before the vesting schedule. “If you plan on being a job hopper, then the vesting schedule will matter,” says an expert.

This simple chart will show you how close you are to early retirement
This article on CNBC shares a chart developed by a financial blogger that enables clients to determine how close they are to early retirement based on their monthly savings and investments. The expert assumes that clients need to have at least 25 times their current annual income to achieve financial independence, and this is in synch with the "4 percent rule" that early retirees usually use. For example, the chart shows that clients who save $6,000 every month, they will be financially independent in four years if they have an aftertax annual income of $85,000.

How being the bank of mom and dad can ruin your retirement finances
Parents who tap their retirement savings to support their adult children are likely to depend on their children in their golden years, writes a Forbes contributor. "Kids and parents should know they will both pay high costs over time if retirement accounts are drained now to pay for expenses like college tuition," writes the expert. "Parents who give to adult children often expect a payback in old age."

Homeowner's insurance: 10 tips for older Americans
Seniors are advised to check if their homeowner's insurance coverage is updated, according to this article on USA today. They should also consider raising their deductible, signing up for duplicate premium notices and raising their credit scores. Seniors should also shop around for better coverage, get umbrella insurance and riders, and avoid canceling their homeowner's policy. Review their liability coverage is also recommended especially if they are running business from home. “Depending on the business and whether customers will be onsite, additional liability coverage may be necessary,” says an expert.