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Retiring early with kids may be harder than clients think

Welcome to Retirement Scan, our daily roundup of retirement news your clients may be talking about.

Retiring early with kids may be harder than clients think
Retiring early can be a disastrous financial move for parents who have children, writes an expert for MarketWatch. “They have no idea how much it costs and how much energy it takes to raise kids, especially in an expensive metropolitan area,” the expert explains. “Even for those who claim to have retired early with kids, chances are high one or both parents are making side-hustle money out of necessity, one spouse is working a full-time job, or the couple has had to drastically cut their lifestyle to the bare bones.”

The new Tax Cuts and Jobs Act has scrapped taxes on the child's excess unearned income at the same rate as the parents.

Ways clients can make their money last in retirement
Seniors who want to avoid outliving their retirement savings should reduce their fixed expenses, maximize their Social Security benefits and consider creating guaranteed income sources, according to this Forbes article. They should also have a retirement spending plan, account for the impact of inflation on their cash flow and stay healthy. Retirees should also engage in tax planning and develop a tax-efficient strategy for tapping their investment portfolios.

What to use instead of high cost LTC insurance
Clients who cannot afford long-term care insurance have alternative strategies in order to prepare for the cost of long-term care, according to this article in Yahoo Finance. These options include group long-term care insurance, long-term annuities, pensions and life plan communities. Clients with high deductible health insurance plans also have the option of funding a health savings account, which will allow them to save for long-term care and other future medical expenses on a tax-free basis, according to the article.

All 20 funds posted losses over the last year.
January 23

3 retirement questions clients should be able to answer by age 40
Clients are advised to determine the age they intend to retire by the time they reach the age of 40, according to this article in Motley Fool. They should also calculate how much income they can expect from Social Security and how much savings they need to have to secure their golden years. Those who are in their 40s should also ensure that they have a plan on how to cover their healthcare expenses in retirement. This means getting long-term care insurance and contributing to a health savings account, which offers triple tax benefits.

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