Our daily roundup of retirement news your clients may be thinking about.
The tiny change that can help clients prepare for retirement
Increasing a savings rate no matter how small can go a long way toward improving retirement prospects, according to the Washington Post. A report from Fidelity Investments show that 25-year-old employees with $40,000 in annual income can expect $190 more in retirement if he or she raises savings rate by one percentage point or about $33. Clients should save up to 15% of their salary to secure their retirement, financial advisers say.--Washington Post
50-something and little saved--what to do?
Clients who are in their 50s and have to catch up on retirement savings are advised to reduce their spending and add as much money as they can, including their tax refund and other windfalls, to their nest egg, according to CNBC. They also should take advantage of the catch-up contributions to their retirement plans and consider working longer to give them more opportunity to save. Once they retire, they may consider delaying their Social Security benefits and get a part-time job to create an extra income stream. --CNBC
Moving from confused to confident about retirement
Preparing for retirement can be confusing for many clients, as a survey by BlackRock shows that 50% of respondents claim they have no adequate knowledge about retirement investing, according to Nasdaq. The same poll also found that 47% of the respondents are clueless about the amount of money they need to save for their golden years. Clients are advised to educate themselves about retirement saving and investing by reading the instruction manual of their workplace retirement plans, seeking professional advice and take an active part in managing their 401(k) plans. --Nasdaq
The real reason people don't save for retirement
Many people find it difficult to save for retirement because the future doesn't appear to be real to them and they are more pre-occupied with today's realities, according to Forbes. “Saving for retirement often comes down to a simple clash. Your present self wants to spend as much as possible now and your future self wants to reap the rewards of socked-away cash. It’s good bet that your future self will be glad you saved for as long as possible,” says a financial adviser. --Forbes
Don’t let hidden costs destroy clients' retirement savings
Investment costs and taxes eat away a substantial portion of people's retirement savings, according to MarketWatch. Retirement savers are advised to focus on hidden fees, losses from reverse-dollar-cost-averaging and their tax bite. They can minimize these losses by investing in low-cost index funds in 401(k) or other retirement accounts and manage their asset allocation, possibly with the help of a certified financial planner.--MarketWatch
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