Our daily roundup of retirement news your clients may be thinking about.
Pre-retirees who face a retirement shortfall are advised to work longer to help achieve their saving goals, according to Morningstar. They also need to delay their Social Security retirement benefits, save aggressively, and plan to spend less during the golden years. Investors who face the same problem need to make changes to their portfolio for lower costs and maximum returns. — Morningstar
Clients are advised to ignore the inheritance they may receive upon their wealthy parents' death when preparing for retirement, according to USA Today. They need to save aggressively and build a nest egg for their future. The inheritance they may receive is their parents' money and it's not right to depend on someone else's fortune to secure their golden years, USA Today reports. — USA Today
Retirement investors may consider adjusting the equity allocation in their portfolios after seven years since the bull market conditions began, according to MarketWatch. Equity allocation is not the same for all investors, as it depends on the investors' portfolio size, current age and the age they intend to retire. Although expected returns are higher despite lower outlook for equities, stocks are not as attractive as before, given recent market volatility. “Returns expectations have ratcheted down, but the expectation of short-term volatility in the market continues,” an analyst says. — MarketWatch
Inflation poses a more serious risk for retirees than pre-retirees, according to a study by Limra Secure Retirement Institute. An inflation rate of 2% can make retirees lose over$73,000 of their purchasing power over two decades if their Social Security benefits amount to $1,341, and the loss could exceed $117,000 if the inflation rate is 3%, the study found. "Seniors or retirees face a different inflation environment than no retirees," says one of the researchers. — CNBC
Clients who intend to claim their Social Security retirement benefits at 62 can expect smaller payments than when they opt to collect the benefits at a later age, according to The Motley Fool. Those who are collecting the benefits have the option to withdraw the application 12 months after receiving the first check. A percentage of their benefits or the entire amount may be subject to income tax depending on the total amount of their retirement income. — The Motley Fool