Our daily roundup of retirement news your clients may be thinking about.
Rent or own in retirement?
Seniors may be better off renting instead of owning a home, as housing costs account for the biggest portion of their monthly expenses, according to this article on Motley Fool. Clients who own a home can tap into their home equity to create a new income stream, will not worry about the rent every month, and have a property to leave to their loved ones. However, owning a home could mean maintenance costs, property taxes and insurance premium payments. Retirees who rent a home put a limit on their housing costs, face lower overall costs, and are free to move when necessary.
Washington is making it tougher to retire
The House of Representatives cleared a health care bill that would repeal the Affordable Care Act and block the states from creating their own retirement savings programs, according to this article on Bloomberg. The bill faces opposition from health care advocates, who say that the legislation would create an 'age tax' that could make many seniors lose their health care insurance. "In addition, the bill now puts at risk the 25 million older adults with pre-existing conditions, such as cancer and diabetes, who would likely find health care unaffordable or unavailable to them," said the AARP in a statement.
Social Security delays are the norm for older Americans
A study by Fidelity Investments shows that more seniors opt to delay their Social Security retirement benefits, according to this article on the Street. "Deciding when to start taking your Social Security benefits is one of the most important retirement planning decisions we face," says an expert with Fidelity." Social Security-related decisions can be complex, with a number of trade-offs associated with the various payment strategies. This decision can be challenging and may be dependent upon several factors, including one's financial situation, health and lifestyle considerations and the needs of your immediate family."
As retirement nears, customize your plan
Clients are advised to customize their retirement portfolio as they approach retirement, says Morningstar's Christine Benz. "But as you get closer to spending your portfolio, I do think it's really important to take a look at the specifics of your situation, to look at the specifics of the cash flow sources that you'll be bringing into retirement, as well as other goals that you might have for your portfolio beyond retirement," says Benz. "And depending on how you approach those different variables, that could call for a dramatically different asset allocation as well as perhaps a dramatically different spending rate from your investment portfolio."
Five toxic myths that could ruin your retirement
Clients are advised to avoid certain misconceptions that could put their retirement at risk, according to this article on Forbes. These ideas include letting their spouse take charge of their concerns in the golden years and expecting their taxes to be lower and need for money to decline after they retire. Retirement investors should remain invested or consider investing in stocks even as they approach retirement, they should not expect to work longer as planned.
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