Welcome to Retirement Scan, our daily roundup of retirement news your clients may be talking about.
Retirees who consider returning to the workforce are advised to engage in careful planning, as their priorities and circumstances are no longer the same, according to this Forbes article. These clients should ensure they have a clear reason for their decision to return to work, set certain boundaries at their new jobs and continue doing the things they enjoy in retirement, according to the article. They should also consider getting advice from those currently in the workforce who can help them adjust to any changes that may have taken place since they first retired.
Although many of today's women are successful entrepreneurs, a big percentage of businesses that women own either fail in the first year or won't survive beyond five years, according to this article in CNBC. To ensure the success of their businesses, female entrepreneurs are advised to pursue their passion, spend generous time with their clients, build networks, listen to feedback and hire a motivated staff. It is also important that they develop a financial plan that includes setting up their own tax-advantaged retirement plan or that funds a Roth or traditional IRA.
A 401(k) plan can be a great retirement savings vehicle, but clients should understand the downsides of contributing to this plan, according to this article in Yahoo Finance. A client’s 401(k) may face hefty investment fees, fewer asset classes, hidden brokerage costs and limited early withdrawal options. While 401(k) contributions are made on a pretax basis, distributions are taxable and may affect taxation of Social Security benefits. Retirees also have to take RMDs from their 401(k)s when they reach 70 1/2.
Although many underperformed the broader market, just over half posted double-digit gains.
Approximately 46% of workers are saving for retirement using a regular saving account, according to Data from GOBankingRate in this Motley Fool. This is a big mistake, as they cannot invest the savings and allow their money to grow through compounding. Instead, they should invest the savings in a 401(k) or an IRA, where their money can grow and they can get tax deductions and other benefits.
