Another way the rich get richer: Study shows widening gap in life expectancies
A study by the Congressional Research Service has found that there is a widening gap in life expectancy between affluent and low-income Americans, according to this column from the Los Angeles Times. As such, rich retirees tend to collect bigger Social Security payouts compared with those in the lower income groups, making the program less progressive, the study found. "Proposals that increase the retirement age will tend to skew Social Security benefits toward higher earners."
Money milestones: This is how a client’s finances should look in their late 20s
Millennials should get started in retirement saving and invest the funds to take advantage of the power of compounding over time, according to this article on MarketWatch. Although they are pre-occupied with short-term financial goals, such as paying off student loan debt, they should start socking away even a small amount in their retirement account, cutting back on spending to free more money to save. “Re-examine your lifestyle. Build that discipline so that when you do receive additional income, you can afford to save it toward your goals,” says a financial adviser.
3 dumb 401(k) moves
Many workers have access to an employer-sponsored 401(k) plan, but they make the mistake of either not participating or not contributing enough, according to this article on Motley Fool. Many 401(k) participants also rely on the default investment options, missing out on significant returns from other options on the plan's investment menu. Another mistake that clients should avoid is to interfere in their 401(k) investments' growth by cashing out the plan or taking an early withdrawal or loan.
How people 50+ will live in the near and distant future
An expert says that retirees in the foreseeable future can expect their daily life to be easier thanks to home automation technologies, according to this article on Forbes. Future retirees are also likely to be not as financially prepared as their parents, the expert notes. “The fact of the matter is the population we serve is, in fact, going to be very financially challenged in the future. People today have pensions and insurance programs, but now people are retiring with maybe $25,000 in a 401(k). It’s going to be financially challenging for them.”
3 money mistakes that can ruin your finances fast
Cashing out 401(k) assets is one of the mistakes that clients should not make to avoid ruining their finances, according to this article on CBS Moneywatch. Clients should also ensure that they pay their credit card bills on time, as missed payment could mean lower credit score and higher interest rates. Another mistake that clients should avoid doing is evading taxes, as it could lead to serious trouble with the IRS.
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