Saving for retirement isn’t only about your clients’ net worth
Welcome to Retirement Scan, our daily roundup of retirement news your clients may be talking about.
Saving for retirement isn’t only about how much money clients have
Clients who are saving and investing for retirement should not only focus on how much money they have saved, but also on how long those funds will stay invested, according experts in this CNBC article. That’s because keeping the money invested for a longer period enables clients to maximize the power of compounded interest growth. “Compound interest is huge and is something you really can’t get back once you take a withdrawal. There isn’t a compound interest fountain of youth and we can’t go back in time. Once you miss out on the compounding interest effect, it’s lost,” says a CFP.
Retirement planning is different for men and women
Retirement planning varies greatly between men and women, as the two face different challenges, writes a Forbes contributor. Saving for retirement can be tougher for a woman, who receives a lower salary, on average, than her male counterparts. “Women are outliving men by an average of five years, so not only are their retirement resources likely to be less, they also have to stretch their savings to last far longer,” the expert says.
Clients retiring after 65 shouldn’t forget this important move
Seniors who intend to retire at age 65 are advised to sign up for Medicare during the seven-month initial enrollment window, according to this article in Motley Fool. The period begins three months prior to the month they will turn 65 and ends three months after their birth month. Those who continue working after age 65, and have access to a group health plan, will be given a special eight-month enrollment period, which starts one month after their employment ends. If they fail to meet that deadline, they will no longer be covered by the group health plan.
How much clients will need to invest to retire with $3M
Clients can end up with $3 million in savings by the time they retire if they save consistently, regardless of what age they start building their savings, according to this CNBC article. They are advised to make the most of tax-advantaged retirement accounts, such as 401(k)s, traditional IRAs and Roth IRAs. Low-cost index funds are also great investment options for clients who set their sights on such a goal.