How to recover when clients don't stick to their retirement plan

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Welcome to Retirement Scan, our daily roundup of retirement news your clients may be talking about.

How to recover when clients don't stick to their retirement plan
Clients who lost track of their retirement savings plan need to know the reason behind the failure to regain control of the situation, according to this article in Motley Fool. For starters, they are advised to set up a tax-advantaged retirement account, automate their contributions and reduce their expenses to free more money and save. Once they accomplish these things, clients should start saving immediately and aggressively to make up for lost time.

Retirement costs that could surprise clients
Clients are advised to prepare for unforeseen expenses that could hurt their finances in retirement, writes Liz Weston, a columnist at NerdWallet. They are advised to set aside an amount for home repairs and renovations, transportation costs and financial support for cash-strapped loved ones, she writes. Medicare premiums and other health care costs, income taxes and long-term care costs are other expenses that can also catch seniors by surprise in retirement.

Managing inflation risk in retirement
Clients should ensure that they include inflation as a risk to address when planning for retirement, writes an expert in Kiplinger. To address this risk, clients should estimate how long their retirement horizon may be and the amount of potential income they would receive, consider creating sources of guaranteed income, such as annuities. "As you think through your future expenses and how inflation may impact them, it’s important to manage expectations, be realistic, and to focus on what you can control," he writes.

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December 17

Why clients should consider converting their IRA to a Roth
Converting some assets in a traditional IRA into a Roth IRA can be a smart way to boost financial prospects and diversify taxes in retirement, a Forbes contributor writes. By doing a Roth conversion now, clients will owe lower taxes than when they take distributions from a traditional IRA in the future, the expert says. A Roth IRA is also not subject to RMD rules, meaning they won't need to take mandatory distributions that could boost their taxable income and other income-based costs.

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Retirement planning Automated investing Medicare Medicare beneficiaries Retirement income IRAs Roth IRAs