Retiring today is 10 times riskier than it was a decade ago
Our daily roundup of retirement news your clients may be thinking about.
Retiring today is 10 times riskier than it was 10 years ago
Investors need to increase their allocation to stocks and other riskier investments to get the portfolio return that they need to secure their retirement, according to this article on Kiplinger. Clients have the option to reduce their portfolio's volatility, but this would mean lower returns. Clients who expect to have sufficient income in retirement may want to take on riskier investments for the growth section of their portfolio and create a game plan in case of an extended correction in the market.
Retirement accounts a ‘holy grail’ that remain out of reach for ETFs
Despite the rapid asset inflow into exchange-traded fund market, retirement accounts remain a "holy grail" for ETFs, according to this article on MarketWatch. “It’s not at all clear that a lot of plan sponsors want their participants to be trading intraday, and if they did, there is a lot of infrastructure that would have to be updated because the defined contribution industry is largely based on an end-of-day reconciliation process,” says an expert with Vanguard. “If there was a value in doing things intraday it would get done, but so far we haven’t seen that, and I think the growth of ETF adoption within defined contribution plans will be slow to develop.”
What's the maximum Social Security benefit in 2017?
People need to earn at least the maximum amount of income that is subject to payroll tax every year for 35 years to receive the biggest Social Security benefit possible at full retirement age, according to this article on Money. The maximum Social Security benefit stands at $2,687 per month, or $32,244 per year. The actual benefit that an average retiree collects per month is just $1,342.
Ask Larry: Which of us should collect a full spousal benefit on the other's record?
A client who files for Social Security retirement benefit before his full retirement age cannot suspend his benefit and get a spousal benefit on his spouse's record, according to this article on Forbes. He is deemed to have filed for his own retirement benefit if he applies just for a spousal benefit. The best strategy is for the client to start collecting his retirement benefit when his spouse reaches FRA, with the wife filing for a spousal benefit on his record.
4 smart retirement moves clients can make today
One of the things that people can do today to have a comfortable life in their golden years is to create a retirement plan, according to this article on Motley Fool. Research shows that clients are more likely to save more for retirement if they have a plan. Clients can also improve their retirement prospects by contributing to a tax-advantaged retirement account, investing for compounded growth and having a deep knowledge of the Social Security rules.