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Some clients feel they'll never be ready for retirement

Retirement scan 9/23

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

Some Americans feel they'll never be ready for retirement
About 14% of Americans aged 50 and older doubt if they will ever be prepared for retirement, a study by Nationwide has found in this article from Motley Fool. Clients who share those feelings are advised to have a good estimate of their expenses in retirement and save aggressively in their 401(k)s and IRAs to improve their financial prospects. It is also important that they buy long-term care insurance and have adequate savings for the cost of health care, according to the article.

How clients can retire with lower taxes, better health and added income
Retirement is not without risks, but planning and using the right strategies can help mitigate, an expert writes in Forbes. For example, seniors in high-tax states may opt for a cash-out refinance pre-retirement and use a reverse mortgage to buy a property in an income tax-free state, according to the article. In those cases, they could qualify for tax status and fulfill reverse mortgage obligations by residing in that state for six months, he writes. "Using one or both properties for short-term rentals allows you to travel between states for business, generate income, and offset that income with write-offs for tenant improvements on both properties."

Do your clients’ kids need a Roth IRA?
Financial advisors should encourage their clients to set up a Roth IRA for their children, according to this article in U.S. News & World Report. Contributions to a Roth IRA are made on an after-tax basis, but investments and withdrawals will not be taxable in retirement. Young clients can also dip into their Roth savings early without any tax or penalties, giving them flexibility when saving for future expenses.

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How to help clients decide where to retire
Seniors who are looking for the right location to retire need to make a number of considerations, according to this article in Yahoo Finance. They need to account for the cost of living, the quality of life, as well as the year-round climate of the places they consider. They should also consider their travel plans, stay in the target location for a time before buying a property and anticipate the tax consequences of their plan. "Some states with high income taxes don't tax Social Security in retirement, so your current tax situation could change when you transition to retirement," says a wealth advisor.

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