Preparing for a recession is integral to retirement planning
Welcome to Retirement Scan, our daily roundup of retirement news your clients may be talking about.
Clients saving for a potential recession are not alone
Retirees are advised to make changes to their portfolio as soon as possible to prepare for a possible recession, writes a Forbes contributor. They should also have an emergency fund, create a monthly budget and repay their high interest debt, the expert says. They are also advised to continue investing for retirement, automate their 401(k) contributions and funding a Roth IRA, which offers tax benefits and penalty-free withdrawals.
Clients planning to work in retirement? Here’s what they need to know
Seniors who consider working in retirement should be aware of the consequences before making a decision, according to this article in the Atlanta Journal-Constitution. Although working in retirement would enable them to continue making money, it could affect their Social Security and other sources of income. For example, a portion of their Social Security retirement benefits will be taxable if their combined income exceeds a certain limit.
3 retirement mistakes even smart savers make
Cashing out 401(k) assets when switching jobs can be a big financial mistake that happens all too often, according to this article in Motley Fool. That’s because these clients will not only face hefty fees and taxes, but they will also miss out on the opportunity to grow their savings through compounding. Working clients are also advised to prepare for a long retirement horizon and must not assume that they can continue working as long as they want.
Here’s the why senior clients could work well into retirement
More than 60% of older workers in a recent survey cited finances as their primary reason why they continue working, according to this CNBC article. “When you have less than ideal retirement savings and you’re aging, that comes with additional medical costs and unforeseen expenses,” says an expert with Provision Living. “One reason why they’re working past that age could be to keep those workplace benefits and keep overall costs down.”