Baby boomers and millennials have more in common than they think
Welcome to Retirement Scan, our daily roundup of retirement news your clients may be talking about.
Boomers and millennials have more in common than they think
Despite the many differences between baby boomers and millennials, workers from both generations share more similarities — and financial pressures — when planning for retirement, writes an expert in MarketWatch. For example, both generations are taking part in the gig economy. This means finding solutions to close the generational gap and achieve economic balance is important. "Workers of all ages would benefit from financial education and workforce training they need to earn and save effectively."
Make time for a retirement checkup
Clients are advised to review their retirement portfolios since could end up with less than what they have thanks to taxes and inflation, according to this article in Kiplinger. They may need to boost their stock allocation to improve returns. “Your first inclination in retirement is to become more conservative, so chances are you don’t have as much money in stocks as you should. That could be 30% to 40% rather than 10%.”
5 steps to making sure clients are ready to retire
Clients are advised to develop a strategy that will maximize Social Security benefits to prepare for retirement, according to this Motley Fool article. They should also plan to cover their healthcare costs, devise a strategy to draw income from their pension and compose a bucket list of activities for retirement. Seniors who are approaching retirement age should also develop a strategy to convert their portfolio to a retiree-friendly asset allocation model.
Not knowing these Roth IRA truths can cost your clients
Workers are advised to take advantage of Roth IRAs, as this account will benefit clients from all income groups, according to this article in CNBC. Clients are allowed to fund a Roth while contributing to a 401(k) — and their retirement plans may also offer a Roth feature. Seniors are also allowed to continue contributing to a Roth even past the age of 70 1/2. Roth distributions are tax-free, which can help retirees to reduce their taxable income and keep their Medicare premiums low.