Our daily roundup of retirement news your clients may be thinking about.
End of the Social Security number? A White House official thinks so
The White House’s cybersecurity coordinator has said that the Equifax hack has prompted the Trump administration to look at ways to establish a safer technology to replace the existing Social Security number, according to this article from The Wall Street Journal. One of the possible solutions is the use of cryptographic keys, or a combination of long random numbers, to access personal information. “I feel very strongly that the Social Security number has outlived its usefulness,” says the White House cybersecurity czar.
Here's how many millennials are actually saving for retirement
A survey by Earnest, Amino and Ipsos has found that 69% of millennials are not saving for retirement, according to this article on CNBC. If young workers don't change their attitude toward retirement saving, they would have to increase the amount of money to set aside for the golden years, and they would miss out on the power of compounded interest on their savings. Millennials may start with saving a small portion of their income, but what is important is that they have a retirement account where they can sock away their savings.
Opinion: This action plan can give all Americans a secure retirement
A defined contribution retirement system is an effective way for people to prepare financially for retirement, and extending and expanding the system to enable other workers to save is a better solution than working on new kinds of plans, according to this article on MarketWatch. Robert Reynolds, president and CEO of Putnam Investments and Great-West Financial, writes, "The system we have has been market-tested. So let’s leverage its most successful components and extend its coverage to more workers."
Invest for short- and intermediate-term goals
When investing for short or intermediate term, clients are advised to quantify their goals and set the time horizon, according to this article on Morningstar. They should hold these short- and intermediate-term assets in a taxable brokerage account. Holding these assets is not recommended because withdrawals prior to retirement would trigger taxes and penalties. They should also choose tax-efficient investments, such as municipal bonds, which offer tax-exempt yields.
Why don't more people wait to claim Social Security at 70?
Although deferring Social Security retirement benefits could boost the monthly benefit payout, claiming the benefits early is recommended if retirees do really need an income stream, according to this article on personal finance website Motley Fool. Collecting retirement benefits early is also a smart move if retirees don't expect to live longer, and they want to enjoy their money while they are still young enough to enjoy it. Claiming early can be a good decision if the retirees expect an increase in benefits through their spouse's work history.
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