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

One way to get your 401(k) investment mix right
More 401(k) participants are holding balanced funds or target-date funds to have a good mix of investments in their portfolio, according to this article on Forbes. Investors are better off having target-date funds than balanced funds in the long term, as TDFs provide broader diversification across several unrelated markets and focus on minimizing risk. For most people, this auto-pilot approach should avoid trouble. However, TDFs could be more expensive and are unsuitable for those who want to raise their stock allocation over the years.

Image: Bloomberg
Image: Bloomberg

Deadline nears for reversing your 2015 Roth IRA conversion
Investors who did a Roth IRA conversion in 2015 have until October 17 to undo it, according to this article on Kiplinger. Reversing a Roth conversion is recommended if they owe taxes on the conversion but converted assets declined in value. Investors may also opt to recharacterize the conversion if it resulted in unintended tax consequences, such as pushing them to a higher tax bracket. "[I]t's not an all or nothing decision, you can do a partial recharacterization," says an expert.

This Social Security fix avoids benefits cuts
Research by Boston College Center for Retirement Research proposed that payroll taxes increase by 2.62 percentage points in 2016 and Social Security invest a portion of its trust fund in stocks to address the program's insolvency issues, according to this article on Motley Fool. The proposal teaches retirement savers that taking on some risk by buying stocks could boost the potential for bigger returns, although they need to have enough savings first before increasing their risk exposure. They should also secure their financial stability in retirement so they will rely less on Social Security benefits and become less affected by whatever decisions that Congress makes for the program.

Military's new hybrid retirement plan a mixed bag
Starting next year, the U.S. military will have a new retirement program that combines its existing defined benefit with a matching contribution similar to a 401(k) plan, according to this article on Morningstar. This hybrid program is designed for career personnel who will not have a lifelong career in the armed forces. "We feel the change will have a very positive net effect,” says a military official. “The new system preserves a defined benefit system even though so many private sector companies are ditching it--and we're adding a competitive plan combining defined benefit and defined contribution.”

The secret to a happier, healthier life: Just retire
A working paper from the National Bureau of Economic Research shows that people's overall happiness and health are likely to improve after they retire, according to this article on MarketWatch. "We find that life satisfaction improves immediately upon retirement and these effects are long-lasting," says one of the researchers. "While we don’t find immediate effects on measurable health outcomes, we do find positive health impacts four or more years beyond retirement. This finding is consistent with the idea that health changes slowly over time so that retirement can have long run health benefits..."