Welcome to Retirement Scan, our daily roundup of retirement news your clients may be talking about.
Retirees should not panic in the face of severe declines in financial markets, according to a CNBC article. For one, market drops offer investors opportunities to buy stocks at attractive prices or to put more money into their 401(k)s, which would reap significant rewards when markets eventually recover. Declines also provide an opportunity to review investment portfolios and check whether their current plans support their short- and long-term goals. A turbulent market period is also an ideal time to sell stocks that are allocated to near-term goals.
California has launched an automatic individual retirement account plan called CalSavers that allows employees of small businesses and other firms that do not offer a retirement plan a chance to save, according to an article from CNBC. The state plan, which launched in July, is expected to benefit an estimated 7.5 million California workers who don’t have access to a workplace retirement plan. Under CalSavers, workers are automatically enrolled, but have the option to opt out. The default contribution is 5% of gross pay, but it can be adjusted by the employee.
Clients are advised to save for retirement so they can better prepare for expenses that could drain their budget, such as inflation, taxes, health care, housing, travel and shopping, according to an article in the Cincinnati Enquirer. Financial experts recommend not “playing it too safe” and working with a financial services professional to create a risk-adjusted portfolio.
Unexpected circumstances can make a huge dent in a client’s retirement plans, according to a USA Today article. The best way to prepare for such situations is to recalculate their savings, with the help of an advisor, in order to create a buffer for unexpected events such as job loss or health problems. One option many retirees are considering is living in another country where the costs of living are lower, which allows them to also grow their savings through additional savings and investments.
