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

Which generates more retirement income—annuities or portfolio withdrawals?

A yearly withdrawal of 4% of savings, adjusted by inflation every year, may sometimes outperform annuities although inflation-adjusted income is more attainable through annuities, according to this article in Time. However, investors should note that annuities become redundant if they already have other retirement income sources such as Social Security and pensions. Annuities are not for every investor, but it is important to explore all aspects before deciding against getting one, particularly as a study shows that a combination of an annuity and financial asset portfolio can lead to long-term growth. –Time

5 critical mistakes people make with Social Security

Five common misunderstood concepts about Social Security are clarified by this article in CBS MoneyWatch. Some Americans believe that full retirement age is 65, that U.S. citizenship is required to claim benefits and that people whose spouses died will receive their own plus their spouses' Social Security benefits, but all these are not correct. Others don't know that divorced people can claim Social Security based on their ex-spouse's earnings history if they didn't remarry and that working and claiming retirement benefits will subject one to a retirement earnings test. –CBS MoneyWatch

Social Security Q&A: Do Social Security benefits help the economy?

The older generation currently receiving Social Security, as well as those soon to receive their soial security, are benefiting greatly from large shares taken from younger workers over the past six decades. The future generation, who have been promised to also receive large benefits when their time comes, will likely face a surge in future tax hikes and large benefit cuts, due to the take-as-you-go policy in Social Security. Younger workers are saving less, acquiring a smaller capital and spending more, according to this Forbes article. –Forbes

Why people don’t buy long-term-care insurance

Investors should look at long-term-care insurance mainlyas a means of financial protection once they get older, rather than looking at it as a potentially wasted investment. Most people would eventually need long-term care but not all would qualify for federal or state assistance for nursing-home care, according to a MarketWatch article. Some insurers offer long-term-care policies that may cost more but have features such as retirement income payouts or life insurance to counter the idea that the policy would be useless if the client won’t need long-term care in the future. –MarketWatch

A plan to manage a client’s money someday

Potential clients who have saved money but have no concrete retirement plans and are unsure whether they really need the help of a financial adviser would benefit from a 12-month agreement  to hash out retirement goals and cash flow planning in collaboration with a financial adviser. While the client has not yet agreed to move his retirement assets under full adviser management, the adviser will still be able to build a relationship with the client and provide necessary information for the client to make better decisions. The arrangement also allows the adviser to have a monthly source of income with a prospective asset management deal by the end of the year. –The Wall Street Journal

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