Should your client downsize their home in retirement?
Our daily roundup of retirement news your clients may be thinking about.
Should your client downsize houses in retirement?
Seniors might be better off downsizing in retirement, as it could eliminate their mortgage and reduce housing costs, according to an article on the personal finance website Motley Fool. By moving, clients could also choose a location with a lower cost of living. However, it can have downsides, such as losing a sense of community and incurring new (and expensive) costs.
Clients need to double their retirement savings
Advisors should consider advising their clients to boost retirement savings from 10% to 17% of their income in order to retire at age 65, according to a report in an article on CNBC. Clients aged 25 to 65 have a median saving rate of only between 6% and 8% of their earnings. "It's not enough just to say, 'Are people saving for retirement'. When you break it down and look at what amount they're contributing, it's at least half of what they should be," says a researcher.
Gift annuity offers tax break and retirement income
A charitable gift annuity is another way for seniors to donate to charity and secure a guaranteed income in retirement, aside from donor-advised funds and qualified charitable distributions, according to an article on Kiplinger. Clients could get a tax deduction in the year they give the irrevocable gift. "A gift annuity may not be a well-known tool, but it can be a wonderful fit, particularly for seniors," says an expert.
Retirement product surges after fiduciary rule’s demise
Annuity sales amounted to $59.5 billion from April to June, according to a new report in The Wall Street Journal. The figure is at its highest since 2015, and the strong demand for annuities is expected to remain steady for the rest of the year. The trend, which can be attributed to elimination of the DoL's fiduciary rule, shows how Washington’s push to roll back financial regulations is giving new life to products that some might say aren’t always good for investors.
What your 50-year-old client should have already done to prep for retirement
By the time they reach the age of 50, clients should have been boosting their retirement contributions and setting aside an emergency fund, according to an article on U.S. News & World Report. They should also have not only diversified their retirement savings by directing the money to tax-deferred, tax-free and taxable accounts, but also paid off their debt and sought professional help.