Our daily roundup of retirement news your clients may be thinking about.
For safety and yield, where best to park your cash?
Retirees who want to invest a portion of their cash holdings may consider short-term bond funds instead of money markets, according to an article in Morningstar. Short-term bond funds provide better rates compared with money markets, but clients may put their assets at greater risk with these funds. The average yield is about 1% with short-term bond funds and around 0.1% with money market accounts and funds. -- Morningstar
3 things every spouse must know about Social Security
One of the three things that clients need to know about Social Security is that the spousal benefit they will receive when they reach full retirement age will be 50% of the benefit of their spouse, according to this article in DailyFinance. If the spouse dies, they will be eligible for a survivor benefit, which is generally 100% of what they spouse received. Clients who were divorced can also claim a spousal benefit on their ex-spouse's record provided the marriage lasted at least 10 years and they never remarried.-- DailyFinance
Top retirement expense: Your home
The biggest expense for people age 50 and older came from home and other related costs, which represent 40% to 45% of their budgets, according to a report from the non-profit Employee Benefit Research Institute. For households of people in the 65-74 age bracket in 2011, home and related expenses amounted to $18,720 on average, while households of those aged 75 to 84 incurred an average of $14,732 that year, the report says. The money spent by people on home expenses dwindles over time, but its percentage in the household budget remains nearly unchanged, says an expert with the institute. -- USA Today
Financial simplicity should be a retirement priority
Clients should adopt a simple approach to investment because identifying a mistake could be difficult if they make things complicated, according to an article in U.S. News & World Report. They can reduce investment costs by holding fewer accounts and receive better service if transactions are made online. Simplifying finances is necessary because people become less able to deal with complications over time, their heirs are unwilling to handle complex financial situations, and clients will have more time to focus on optimizing their money's worth. -- Yahoo Finance
5 ways to make your lousy 401(k) plan stellar
401(k) participants who have very limited investment choices within their retirement plans have options to improve their long-term financial prospects, according to an article on MarketWatch. Self-directed investments are available as an option for clients in many 401(k) plans, whether as an in-service transfer or in-service distribution. Participants may also convince their trustees to allow their plan to add more investment options, and leave no money on the table by taking advantage of their employer match contributions. -- MarketWatch
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