Our daily roundup of retirement news your clients may be thinking about.
The recent volatility in the stock market has a mixed impact on target-date funds, according to this article on CNBC. Market performance was poorer for several target-date funds with small allocations in alternatives compared with those without alternatives. "It raises the question if a small allocation to alternatives is worthwhile," says Jeff Holt, a fund analyst with Morningstar. –CNBC
Many Americans polled by T. Rowe Rice agreed with the statement that "I'm more likely to win the lottery than receive any money from Social Security," and this view is wrong, according to this article on USA Today. While Social Security Trust Fund is expected to run out of money by 2033, it doesn't mean that retirees will no longer continue receiving their benefits and future retirees will not get any. Once the trust fund runs dry, Social Security will have to tap payroll taxes to cover these benefits and may need to reduce the benefits by 23%. –USA Today
Retirees may consider getting a part-time job, start a business or sell valuable belongings that pile up in their storage rooms to augment their retirement income, according to this article in U.S. News & World Report. They may also offer their professional expertise to their former employers or other firms for a fee, tutorial services to youngsters or personalized services such as baby-sitting or even pet-sitting to their neighbors. Other strategies for additional earnings for retirees include making hobbies a lucrative job, renting out their idle property, joining the sharing economy and investing their money for returns. –Yahoo Finance
Low savings rate and extreme investing are major mistakes that retirement savers often make, according to this article on Kiplinger. Also, many clients also invest too much on company stock. Learn the strategies that will enable retirement investors to fix these errors. –Kiplinger
A 63-year-old divorcee is advised to start collecting her own retirement benefit and file for her unreduced divorced widow's benefit on her deceased husband's earnings record when she reaches her full retirement age, according to this article on Forbes. It's because her benefits on his record would be greater than what her own retirement benefit. However, if the husband started collecting his retirement benefit early, she is advised to apply for divorced widow's benefit as soon as possible because of the RIB-LIM formula. –Forbes