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

State pension funds face $1 trillion funding gap

The shortfall of state-run pension funds increased by $54 billion to $968 billion in 2013 compared with year-ago levels, with the total pension funding gap exceeding $1 trillion if local pension fund shortfalls are included, according to a report from The Pew Charitable Trusts. "Policy makers are going to need to find a way to address [this funding gap] and it's going to have to come down to some kind of plan to pay it down in an orderly fashion," said Pew's senior researcher David Draine. – Yahoo Finance

Why the last check your client writes before they die should bounce

Retirees should not look at the inheritance they will leave to their children as a beneficiary business model, according to this article on MarketWatch. Instead of transferring their wealth to their loved ones in lump sum, clients should consider leaving their legacy in payment form, such as getting a period-certain single-premium immediate annuity. That way, clients will avoid the potential financial damage lump-sum inheritance can do to their heirs by making the wealth transfer happen as if "nothing has changed." -- MarketWatch

Are your clients' kids causing a retirement crisis?

While some analysts claim that many households under-save for retirement because they prioritize their children's needs, another survey finds that retired parents are just as satisfied as their childless counterparts, according to this article on Forbes. The insignificant difference in responses could mean that retirees with children are in denial, or they follow the "the peanut butter theory of retirement saving," the article states. "If that's the case, then the retirement crisis we've all come to fear is in fact something much smaller and more manageable." -- Forbes

How to retire early without giving up what you love

Relocating to a less expensive location is a strategy for people to retire and continue to do the things they enjoy, according to this article on CNNMoney. Retirees can also continue pursuing their hobbies and other activities they want to do if they have saved adequately for the golden years and they spend less than what they can afford. Getting health coverage under the Affordable Care Act is also another smart move for them to continue enjoying the things they had been doing before they retired. – CNN Money

Does your client have the right 401K?

Workers have different types of 401(k) plans to choose from, and it is important that they understand each of them so they can select the most suitable plan, according to this article on Fox Business. There are traditional, SIMPLE, Solo and Roth types of 401(k) plans, and the rules vary from one type to another. Take note of the differences so clients can make a wise decision when saving for retirement. – Fox Business

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