Debt is just part of why millennials struggle to save for retirement
Welcome to Retirement Scan, our daily roundup of retirement news your clients may be talking about.
Debt isn’t why millennials are struggling to save for retirement
Approximately 66% of millennials lag behind in their retirement savings targets, with 37% of the respondents blaming the hefty housing costs for this failure, according to a report from TD Ameritrade in this article in CNBC. To reduce their housing expenses and free more money to save for retirement, millennials may want to split the rent with roommates and stick to their housing budget when looking for a place to rent. They should also consider relocating to a cheaper location.
3 retirement savings options for the self-employed
Roth IRAs, just one method for self-employed clients to build their retirement savings, doesn’t come without its tax caveats, according to this article in The Seattle Times. Although clients who own one won't get an upfront tax deduction for their contributions, they won't owe taxes on the future distributions. SEP-IRAs and solo 401(k)s are other tax-advantaged savings vehicles that self-employed clients can use to secure their retirement.
Clients planning to work in retirement? Here’s what they need to know
Seniors who consider working in retirement should be aware of the consequences before making a decision, according to this article in the Atlanta Journal-Constitution. Although working in retirement would enable them to continue making money, it can have an impact on their Social Security and other sources of income. For example, a portion of their Social Security retirement benefits will be taxable if their combined income exceeds a certain limit.
Ways clients can use a supplemental executive retirement plan
Working clients are advised to take advantage of supplemental executive retirement plans provided by their employers, according to this article in Yahoo Finance. Companies don’t have to offer a SERP to all their workers, as the plan is given to employees with higher salaries as part of a larger compensation package. A SERP presents tax benefits to workers and does not limit the employees’ contributions. “SERPs are a great way to reward key employees above and beyond traditional retirement plans,” an expert says.