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Why advisors may urge retirees to load up on equities

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

Why advisors may urge retirees to load up on equities
Retirement savers will be better off boosting their equity allocation if they have a safety net in the form of assets that provide guaranteed income, such as Social Security, pension and annuities, according to CNBC. “If you have a safety net, the consequences of risk aren’t as severe for you,” says a wealth manager. “If you have significant guaranteed income, your portfolio is more skewed toward safety.”

Think 3% is small potatoes? It can eat your clients’ life savings
At first glance, the 3% advisory and administrative fees could be insignificant, but the small amount could have a big impact on the amount of returns that a retirement portfolio will generate, writes an expert on MarketWatch. “If you add up all of the fees in your portfolio, it may reveal a ‘silent killer’ that can devastate your account balances over your working career or a lengthy retirement.”

90% of new retirees are facing this common (and expensive) problem
Ninety percent of recent retirees polled by the Nationwide Retirement Institute suffered from medical problems sooner than anticipated, with 60% of them saying the health issues struck them five years earlier than expected, according to this article on Motley Fool. This means that clients should include healthcare costs when saving for old age, as Medicare will not cover all of their medical expenses.

Want client to thrive during retirement? Focus on these four things
Clients who are approaching retirement are advised to secure their health and wellness, build a sizable savings, have a sense of purpose and develop a bucket list of activities to ensure that they will have a fulfilling life after they retire, according to the Simple Money column from the Cincinnati Enquirer. Clients who are contributing to a 403(b) plan will find the plan closely similar to a 401(k) plan, as both plans are tax-deferred, have the same contribution limits and compel participants to take required minimum distributions starting at age 70 1/2.

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