Welcome to Retirement Scan, our daily roundup of retirement news your clients may be talking about.
When a financial advisor in this Barron’s article speaks with clients about retirement planning, he suggests they emphasize less of their time focusing on the money aspect and more on their personal life goals. As an advisor with Allworth Financial, Scott Hanson has discovered many problems clients face in retirement is not always that they haven’t saved enough or invested wisely, but rather they have not spent enough time focusing on their life’s goals and often are left feeling unhappy or deflated, according to the article. “We promote this idea in our industry of a goal to sit on some yacht drinking a cocktail,” the advisor says. “That isn’t really what life is—it would last about two hours. It’s about relationships and meaning. When you leave the workplace, people risk losing relationships and their sense of purpose. A lot of people struggle at that age.”
Seniors will have to decide where to spend their retirement after leaving the labor force for good, according to this CNBC article. Relocating and downsizing can be a great move for retirees, as this can significantly cut their discretionary spending. A health crisis could also force seniors who opted to stay put to leave their home unexpectedly. “We recommend that people do it long before they need to do it, not doing it reactively,” an expert suggests.
There is a narrowing gap between the number of pre-retirees who intend to continue working in retirement, a survey by LIMRA has found in this MarketWatch article. The number of retirees who remain in the labor force on a part-time or reduced-working-hour basis, according to the article. Transamerica Institute and Transamerica Center for Retirement Studies CEO Catherine Collinson says the findings are “encouraging,” adding that working part-time in retirement will benefit seniors. “It enables them to earn income, continue saving for retirement and bridge savings shortfalls — with more free time for personal pursuits,” she says.
Can’t stop, won’t stop. That’s the mantra of some boomers who have no interest in retirement.
Clients are less likely to retire as planned if they fail to create a retirement plan, according to this article in Motley Fool. Dipping into their retirement accounts can also increase the odds of not retiring on time. Clients should not only save consistently but also choose the savings vehicles carefully. For example, while contributing to traditional 401(k)s and IRAs can reduce their taxable income, distributions will be taxed in retirement. A Roth 401(k) and Roth IRA may offer no upfront tax deduction but withdrawals will be tax-free.
