Our daily roundup of retirement news your clients may be thinking about.
Retirees: Stop paying attention to the markets
Retirees will be better off turning a deaf ear to market noise and sticking to their investment plans, writes an expert on MarketWatch. "Ignoring the markets’ short-term gyrations not only will reduce your anxiety and stress and thereby enable you to better enjoy your retirement, it also will most likely help your portfolio perform better," writes the expert. "Short-term returns are mostly noise, and noise—by definition—largely cancels itself out over time. When you focus on longer-term periods, therefore, you will be inclined to see the markets as more placid than when you focus on shorter-term periods."
Why is retirement so stressful?
There is a significant chance that retirement will not turn out the way it is planned, as clients are likely to experience life-altering events that can upset their plans during this phase, writes a Forbes contributor. "We have to stop painting this perfect picture of retirement and start sharing what can happen if people don’t have a plan for the non-financial aspects," writes the expert. "We have to teach people that there is always a positive message in the mess that they are going through, and that a successful retirement isn’t one without problems, but rather one in which they learn to overcome them."
How much can you spend in retirement?
Seniors are advised to plan their spending to ensure that they will not outlive their retirement nest egg, according to this article from U.S. News & World Report. To do this, they should determine their retirement income from all possible sources and develop a sustainable withdrawal rate when tapping their retirement portfolio. They may create a spending strategy based on the government's required minimum distribution schedule. When taking RMDs from traditional 401(k)s and IRAs, clients should account for the income tax on the distributions, as contributions to these accounts are made on a tax-deferred basis.
5 things to give up to retire by 40, from real people who have done it
Clients are advised to stop spending mindlessly in their 20s and 30s to be able to have an early retirement, according to this article on CNBC. They should also live within their means, reduce housing costs by downsizing and develop a plan with a clear goal in mind. Moreover, they should not hesitate to get out of their comfort zone. "It alters, in a healthy way, our outlook on life. Getting out of your comfort zone is a mind-game and one that helps break an all-too-common addiction to spending," says an early retiree.
Here are 5 retirement savings options for the self-employed
Self-employed workers have the option of using a regular taxable account to build their retirement nest egg, according to this article on personal finance website Motley Fool. They may also contribute to a tax-advantaged retirement accounts, such as traditional or Roth IRA, a SIMPLE IRA, and a SEP IRA. Opening a solo 401(k) is yet another way for freelancers and business owners to save for the golden years.
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