Our daily roundup of retirement news your clients may be thinking about.
A smarter way to budget for retirement health-care costs
Retirees can prepare a budget for their health-care expenses by first separating the recurring costs from the less predictable ones, according to this article on MarketWatch. Recurring health-care expenses are steady across all age groups at an average of $1,885, according to a report from the Employee Benefit Research Institute. Computing health-care costs that are nonrecurring can be more complicated since both the usage and intensity of usage of these types of services are very uncertain, the report says. --MarketWatch
Roth IRAs may soon have required minimum distributions
The proposed 2016 budget by the Obama administration includes provisions that would subject Roth IRAs to required minimum distributions like 401(k) plans and traditional IRAs, according to this article on CNBC. However, the proposal is unlikely to clear Congress, according to the article. Retirement savers are advised to weigh their options and continue to max out their retirement contributions. They may also ask their advisers to provide different retirement scenarios if the proposal is passed into law, an expert says. --CNBC
The biggest expenses in retirement -- and how to prepare for them now
Clients are advised to determine their largest expenses in retirement so they can prepare for them and ensure their nest eggs will last, according to this article on Forbes. They can identify budget items that will eat away most of their money by looking into the Consumer Price Index Elderly (CPI-E), a gauge more tailored to elders' expenses than the more general CPI Index. For example it shows that nearly half of the expenses (46.89%) for older Americans come from housing while food and beverages make up 15%. --Forbes
Millennials need to be more aggressive investors
Adopting a conservative approach to retirement saving is a mistake that many Millennial workers make, writes Greg McBride, senior vice president and chief financial analyst of Bankrate.com. Young professionals are advised to be more aggressive in investing their retirement assets to take advantage of the long time ahead, which enables them to ride out the unfavorable trends in the stock market, McBride says. "The potential for higher returns means taking more risk, yes, but the risk is mitigated by both the long time horizon and the ability to make additional retirement contributions during market setbacks." --The Wall Street Journal
7 steps to a financially secure retirement
Clients need to set aside 10% to 13% of their annual gross income and reduce their expenses to ensure they will retire with adequate nest eggs, according to this article on USA Today. They can also secure their finances in the golden years if they make smart investments, make the most of tax-deferred accounts, annuities and IRAs, and anticipate medical costs that are not covered by insurance. Another way to help people avoid financial troubles in retirement is to pick a housing option that suits their circumstances, while planning for the age to start collecting Social Security benefits can boost chances to have a financially secure retirement. --USA Today
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