Our daily roundup of retirement news your clients may be thinking about.
Many retirement investors make the mistake of following the old rule that investors subtract their age from 100 to determine the percentage of portfolio allocated to bonds, according to this article on MarketWatch. It's because investors, especially the young ones, have the time to take advantage of the growth potential of equities in the long term. Young clients are advised to invest 100% of their portfolio in equities, start adding bonds when they are in their middle years and keep 50% or 60% of their equity investments when they retire. -- MarketWatch
Fifty years after Medicare and Medicaid were established, over 30% of Medicare beneficiaries and more than 50% of Medicaid recipients are handled by private health plans, according to this article in The New York Times. While many people doubt if the government saves money by relying on private plans, the Affordable Care Act provides coverage by combining government money and private insurance, similar to the programs' newer versions. "The Affordable Care Act expanded Medicaid and built a model that helped fill some of the gaps between Medicare and Medicaid. At the same time, it is rooted in the private sector and competition," says Jason Furman, chairman of the President Obama's Council of Economic Advisers. -- The New York Times
Investing in the stock market at a time when it crashes with the goal of gaining from its recovery is not a good idea for retirement investors, according to this article on CNNMoney. History shows that knowing when the market will crumble and when it will rebound can be very unpredictable. Those who are anxious about investing their money in the stock market may consider the dollar-cost averaging strategy, which allows them to invest in stocks gradually to curb the risk. -- CNNMoney
Clients who are eligible for Social Security retirement benefits can still receive the benefits even if they decide to give up their green card, according to this article in The Wall Street Journal. Beneficiaries who remain in the U.S. will be classified as resident aliens while those who opt to live abroad will be treated as non-resident aliens. The benefit payments that non-resident aliens receive will be subject to treaties and international agreements honored by their country of citizenship. -- The Wall Street Journal
While 72% of the couples polled by Fidelity Investments claimed they communicate to each other about finances, 60% of the respondents do not share the same view about their Social Security retirement payments, according to this article on Forbes. Also over 40% of the respondents have wrong information about how much income their spouses receive, the study finds. Nearly 50% of the couples are even clueless about the amount of savings they would need to keep their lifestyle through their golden years, the study shows. -- Forbes