Our daily roundup of retirement news your clients may be thinking about

Look out for the 'retirement danger zone'
Clients who are approaching retirement while the market is experiencing turmoil -- a combination that some experts dub a portfolio "danger zone" -- are advised to avoid making knee-jerk decisions, according to this article on CNBC. As Americans' lifespans have grown, many advisors have been shifting their investment mix recommendations, urging clients to head into retirement with higher levels of stock than previously recommended. Still, some older clients are overexposed to equities. In a recent report, Fidelity found that 11% of account holders age 50 to 54 had all of their 401(k) assets in stock; and another 18% had a stock allocation at least 10 points higher than suggested. In the 55 to 59 age group, 10% had their entire 401(k) in stocks, and another 27% had a higher-than-recommended stock allocation. But wherever your client falls on that spectrum, now isn't the time for them to make a radical pullback to less risky investments—or out of the market altogether, this article says.  --CNBC

You really want to privatize Social Security in this market?
Recent developments in the stock market serve as a reminder that privatizing Social Security will not work, according to this opinion piece in the Los Angeles Times.  This idea failed under former President George W. Bush, but it is being suggested again by several of today's Republican presidential nominees. But the same problems persist with the idea, according to this article. A person's nest egg which took a lifetime to build could be destroyed overnight by a market crash. Although stocks provide bigger returns than bonds in the long term, workers and beneficiaries can have better prospects with the Social Security Administration as it can ride out market declines because of its long-term outlook. Moreover, by pooling its investments, the program can keep its transaction costs low. --Los Angeles Times

Women may be less prepared for the death of their spouse
A survey by personal finance website NerdWallet shows that women are financially less prepared than men in case their spouse dies, according to this article on MarketWatch. This may pose a concern as government data show that women have a higher life expectancy compared with men. “Couples appear ill-prepared to face this reality with sufficient life insurance coverage. This is an area where the longevity gap, which favors women, collides with the pay gap, where men earn more,” says NerdWallet's John Kuo.  --MarketWatch

Don't worry about retirement savings
Retirement investors need not make any changes to their investments after the stock market dropped 1,000 points Monday, according to this article on CNNMoney. Investing for retirement is a long-term endeavor and clients can survive all market conditions if they gradually shift their assets from stocks to less-risky investments as they age. Also, investors are likely to recoup better if they stay the course, Fidelity says.--CNNMoney

The age of longevity: How it impacts investing for retirement
As people expect to have a longer retirement, they should have an effective withdrawal strategy to ensure they won't outlive their nest egg, according to this article on Kiplinger. As they spend down their retirement assets, they should account for risk posed by portfolio volatility to make smart decisions on what funds to tap and when to withdraw them. Clients can mitigate this risk by diversifying their investment portfolio.--Kiplinger

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