Welcome to Retirement Scan, our daily roundup of retirement news your clients may be talking about.
Clients are advised to consider the tax consequences of their decisions when raising funds to cover emergency expenses, according to an article from CNBC. For retirees, dipping into their traditional retirement accounts could trigger an income tax bill, while withdrawing from Roth accounts might not result in a tax liability. Selling appreciated investments in a taxable brokerage account could also mean capital gains taxes, and the applicable rates will vary depending on how long they owned the investments.
Thirty-six percent of Americans polled by FinanceBuzz claimed that they’d give up non-essential expenses and save the money to retire early, according to a Motley Fool article. The survey also found that 12% of the respondents would forgo having children while 6% said they would prefer not owning a vehicle just to have enough savings for an early retirement. Clients can still retire early without having considerable savings by working part-time or running a small business.
Although bonds can be a good investment option, retirement investors can’t keep up with inflation if they rely only on them, according to an article from Forbes. Seniors will need stocks to offset the impact of inflation, the article says. Equity investments including real estate investment trusts and master limited partnerships can generate substantial returns to help investors to secure their retirement, with many of them providing tax benefits when bought in non-qualified accounts.
Nearly 30% of seniors aged 65 to 72 either remained in the labor force or wanted to work again last year, according to a Fox Business article, citing data from the Pew Research Center. The percentage was higher compared with the rates recorded among the previous generations. This can be attributed to many seniors having inadequate savings as they need a bigger nest egg to support a longer retirement horizon and cover higher costs of healthcare.
