Welcome to Retirement Scan, our daily roundup of retirement news your clients may be talking about.
Despite the stock market's robust performance in recent years, many seniors are likely to retire poor because they have little or nothing saved in retirement accounts, according to this article in MarketWatch. Their retirement prospects are further aggravated by the disappearance of pension plans and the financial woes facing Social Security. To help secure their retirement years, clients should pay down their debt, seek help from a financial advisor and reduce spending by downsizing and giving up their vehicle.
A report from Vanguard says that workers' median 401(k) contribution is 6% of their income, which is not enough to secure their retirement years, according to this Money article. To ensure that they will have a comfortable life in retirement, workers should be contributing 12% to 15% of their pay, Vanguard says. Clients who started saving late should boost their savings rate to make up for lost time, especially when portfolio returns are dwindling.
A survey by Bankrate has found that real estate is the most popular investment among millennials, according to this CNBC article. However, owning a real estate property is not the best investment option, as it triggers hefty expenses, including insurance, maintenance and property taxes. Investing in the stock market can be a better and easier move for millennials, as they can start using a tax-advantaged 401(k) or IRA and they will have more time to grow their assets.
Midsummer is a great time for retirees to review their financial health, according to Morningstar's Christine Benz. "Are there any tweaks or adjustments you can make now to improve your portfolio or reduce your tax bill for the 2019 tax year?" she writes. "While the deadline for the tax-related jobs is Dec. 31, there's no reason you need to wait until the very last minute to plan or even execute them."
