Our daily roundup of retirement news your clients may be thinking about.
Seventy nine of 126 public pension plans surveyed in a report from the National Association of State Retirement Administrators decided to reduce their return assumptions in the years after the financial crisis in 2008, according to this article in The Wall Street Journal. These plans have a median return assumption at 7.69%, which is lower compared with the pre-crisis assumption at 8%, "It's worth noting that almost every change in the investing return assumption has been incremental," said Keith Brainard, the group's research director, adding that "[i]n a lot of cases, the plans have changed their assumption more than once" in the previous years. The Wall Street Journal
Many retirees who deferred their Social Security benefits have failed to sign up for Medicare Part A when they reach 65, according to this article on Kiplinger. Many retirees also pick the wrong Medigap policy and those who work at age 65 fail to sign up after resigning from their job. Some seniors also make the mistake of assuming that their Medicare Advantage plan covers their health care providers, while other fail to put their Part D plan on autopilot. Kiplinger
Applying for a reverse mortgage may be more difficult for retirees and non-retirees alike because of the new federal rules, according to this article on MarketWatch. The new rules which kicked in last month require a "financial assessment" for all applicants to determine if they will be able to repay the loan without disastrous consequences on their financial health. As such, lenders are given permission to assess the applicants' income, cash flow and credit reports. MarketWatch
Clients are advised to defer saving for their children's education until their retirement saving is on track as there are ways to find funding for their children's college costs, according to this article on The Motley Fool. They may also delay paying off their home mortgage as the interest rate is low and the payments can be tax-deductible. Another plan that clients may consider deferring is buying a new car, since there are safe and reliable transportation available to them. The Motley Fool
Forty-one percent of Americans polled by Pew Research Center believe they will receive no Social Security benefits when they retire, with nearly one-third of the respondents expecting lower benefits, according to this article on CNBC. "People who think they will get zero benefits from Social Security are wrong and they should look at the facts," says Andy Landis, a former claims representative for the Social Security Administration. However, there is reason to believe that retirement benefits will be reduced because of the programs insolvency woes. CNBC