Welcome to Retirement Scan, our daily roundup of retirement news your clients may be talking about.
The end of the year should be a time for clients to review their monthly statements and get rid of subscriptions and items that they don't need, but many clients fail to do this, a financial consultant writes at CNBC. Many working clients also fail to use up the balance in their flexible spending account, make the most of the credit card rewards and make enough 401(k) contributions to qualify for their employer's match, the expert says. Many investors also sit on losing investments but fail to sell them and use the losses to offset their taxable gains.
Women need to set aside more money for retirement, as they are likely to live longer but receive lower salaries compared with men, an expert in Kiplinger writes. They are advised to make the most of the benefits offered by retirement accounts, including the higher contribution limits of these accounts next year. "It’s also important to help minimize the impact taxes can have on income in retirement,” she writes. “That means managing the funds in various types of investments and accounts — taxable, tax-deferred and tax-free — as efficiently as possible, now and in the future."
Adopting a conservative investing approach could work for retirees who want to ensure that they won't outlive their savings, but not for those who want to withdraw at least 4% and preserve or grow their savings, according to this article in The Wall Street Journal. “Low interest rates make it hard to ‘have your cake and eat it, too,’” says Charlie Farrell of Northstar Investment Advisors. “If retired investors want to try to maintain and build wealth, then they’ll need to take more risk, which means more in equity-type investments. Each person needs to weigh that trade-off and decide what is more important to them.”
Double-digit gains produced by the mutual funds and ETFs with the most AUM were not enough to best the broader market.
A team at the University of Massachusetts Boston has established the Elder Index — a benchmark designed to gauge the financial security of older Americans, according to this article in MarketWatch. The index "is based on the bare-bones budgets of singles and couples aged 65 or over," says Jan Mutchler, director of the university's Center for Social and Demographic Research on Aging in the Gerontology Institute. "For 2019, we found that the average income needed by an older individual in rental housing to meet all basic needs was $25,416, and for a couple in rental housing it was $36,204."
