Clients can't afford to underestimate sequence of return risk
Welcome to Retirement Scan, our daily roundup of retirement news your clients may be talking about.
Retirees can't afford to underestimate sequence of return risk
Advisors must build a comprehensive plan for their clients that addresses ways to mitigate the sequence of return risk, which could be the biggest threat to their retirement, a CFP writes in Kiplinger. To do this, clients should "remove money that [they] intend on spending in the first few years of retirement out of the stock market," the expert says. "If [they] don’t withdraw funds invested in the stock market when the market is down, then [they] avoid the negative compound interest effect in a declining market."
Retiring abroad looking better and better?
For some seniors, relocating overseas in retirement can be a smart financial decision, a Forbes contributor writes. "For those whose only source of funds in their later years is their social security check, living in a far less expensive country is particularly appealing," according to the expert. "It is always advisable to rent a place for a month or more before making the much bigger decision of whether to pull up stakes and make a permanent move."
The retirement savings blind spot your clients don’t realize they have
Many seniors are forced to retire sooner than expected, suggesting that clients consider the possibility of an early retirement as part of their plan, a survey by NerdWallet has found in this CNBC article. To do this, clients are advised to consider saving as if they intend to retire early. “Americans aren’t saving enough for retirement, and we’re hoping to open their eyes about that and do whatever they can to boost those numbers,” says a retirement specialist with NerdWallet.
7 major retirement planning milestone clients shouldn’t miss
Clients need to know a few milestones as they plan for retirement and build their nest egg, according to this Motley Fool article. For example, they are allowed to withdraw from their 401(k) plans and IRAs at age 59 1/2 without incurring tax penalties. They can also dip into their health savings account for non-medical expenses without tax penalties once they reach the age of 65.