Welcome to Retirement Scan, our daily roundup of retirement news your clients may be talking about
Clients could still suffer significant losses to their retirement savings even if they have achieved an acceptable level of diversification in their portfolios, a Forbes contributor writes. "The main issue that can hit many traditional asset allocation models is the fact that many mutual funds and ETFs are created with lopsided or unequal allocations toward certain sectors of the economy," the contributor writes. "To help address specific investment concerns, clients can look to a series of mutual funds and ETFs that are referred to as equal weighted investments."
Retirees in Memphis, Tennessee; El Paso, Texas; and Wichita, Kansas can expect their $1 million in savings to last longer if they live in other cities in the U.S., according to a study in this article from MarketWatch. Average retirement expenses amount to $50,860 per year, which translates to $712,040 over 14 years and $864,620 over 17 years, according to GoBankingRates’ analysis of data from the Bureau of Labor Statistics. “When you factor in the average monthly Social Security benefit of $1,381.79 and consider the average cost of living in the United States, $1 million could actually last as long as 29 years, 1 month and 24 days,” says an expert at GoBankingRates.
Clients are advised to contribute the maximum amount to their Roth IRA to optimize the tool’s benefits, according to this article in TheStreet. Roth IRA contribution limits vary, depending on a client’s filing status. Clients may also want to convert some of their traditional IRA assets into a Roth, although they may have to pay taxes on the portion representing their pretax contributions and earnings. Those who cannot contribute directly to a Roth may opt for the backdoor strategy, which allows them to contribute to a traditional IRA and convert the contribution to a Roth.
They’re more expensive than their passive peers. But did they beat their benchmarks?
Seniors who are planning to file Social Security early are advised to weigh their options before making a decision, according to this Motley Fool article. That's because filing early would reduce the monthly benefit payouts and their total retirement benefits if they will have a longer retirement horizon. This option might also prompt them to stop working earlier than expected.
