Why some clients should welcome annuities in their 401(k)s

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

Why some clients should welcome annuities in their 401(k) plans
Working clients stand to gain from provisions of the Secure Act that would allow retirement savers to buy an annuity within their retirement plans, writes Jean Statler, executive director of the Alliance for Lifetime Income, at MarketWatch. As many of today’s workers no longer have access to pension plans, annuities in their 401(k)s enable them to have a source of guaranteed retirement income and address longevity and other risks, the expert explains. “At a time when the lack of protected retirement income has become a national crisis, annuities have never been more important to the future retirement security of millions of American workers,” Statler says.
How women can fight the retirement gender gap
Retirement saving can be more challenging for women than men, as female workers are living longer but earning less than their male counterparts, writes an expert in Kiplinger. To keep up with men, women should prioritize their financial wellness and enlist the help of a professional and include an income goal in their plan, the expert writes. They should also consider working longer, life insurance as well as coordinate their retirement benefits with their spouse. “By coordinating benefits, couples can get the coverage they need, minimize costs and lessen tax implications,” she says.

Biggest retirement mistake that scares clients
Many Americans consider not saving in a 401(k) to be among the top financial mistakes, according to a survey by TD Ameritrade in this Forbes article. This tax-advantaged savings vehicle is critical to every worker’s retirement, as pension plans are not disappearing and Social Security benefits won’t be enough to cover expenses in retirement. Workers should find ways to reduce their 401(k) fees and hold efficient investments to make the most of their workplace retirement plan.

These employers offer plans that pay as much as $6.52 per hour in contributions.
October 23

Tips for balancing stocks in clients’ retirement portfolios
A retired couple concerned about the 60% stock allocation in their investment portfolio should request an explanation from their investment firm as such an allocation may be too risky, according to this article in the Los Angeles Times. They should also ask to discuss the impact of a lower allocation on their income if they are willing to adjust their spending to minimize their risk exposure. Hiring a fee-only, fiduciary financial advisor is recommended if their firm fails to justify such a high allocation at this stage in their life.

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401(k) Diversity and equality Retirement income Annuities Financial wellness Financial planning Portfolio management