Should retirees avoid the stock market?

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Should retirees avoid the stock market?
Experts say that retirees should remain invested in stocks even if they have to scale back their exposure to this investment type, according to this article on Motley Fool. "[I]n a low-interest rate environment like we're in right now, where bond yields are 2% to 3% if you're lucky, it can be tough to even keep up with inflation over time if all you're invested in is fixed income or, even worse, cash investments," says an expert. "You're going to have some volatility in stocks. That's true. But, it's definitely a risk/reward thing where the reward makes more sense."
Fee-based annuities may not be your best bet
Clients are advised to look at the pros and cons of buying a fee-based annuity before making a decision, according to this article on Kiplinger. Compared with their commission-based counterparts, fee-based annuities are cheaper and the annual fees make sense particularly for variable annuities, in which the adviser actively manages the assets to maximize tax-deferred growth. However, critics warn investors that gains in a fee-based annuity are limited, as growth is based on a preset formula tied to the market index.

This neglected population is actually the most powerful in America
The MIT Age Lab founder and director, Joseph Coughlin, says that people should revisit their concept of retirement, as they are likely to live longer and spend more years in retirement, according to this article on MarketWatch. The expert also introduces the term "longevity economy, referring to "older adults, which starts at age 50 for most of us, and make up a $7-to-$9 trillion economy." He adds: "The 50+ group is responsible for 70% of disposable income in the U.S. and the 60+ group is responsible for 30% of wealth around the world."

How to stop your grown kids from ruining your retirement
Parents can help their adult children become financially independent without allowing their kids to ruin their retirement, according to this article on Forbes. Guiding them to make sound financial decisions, like renting a modest apartment while looking for a job, and supplementing their income in advance until they can stand on their own are strategies that can help parents protect their retirement goals while providing financial aid to their adult children. Parents are advised to talk to their children when it is about time for them to stop the financial help to allow their children to live independently and succeed in their finances.

The double whammy of long-term health care costs
A study has found that more than half of people who provide caregiving services to their elderly are working, and they make a big adjustment to look after their loved ones, according to this article on CBS Moneywatch. Clients should plan ahead to avoid putting too much burden on their loved ones when they get old. They may consider buying long-term care insurance and earmark certain assets or home equity to cover the cost of long-term care. "Make sure to review and update relevant legal documents, including a will, an advance medical directive, a durable power of attorney ... and a health care proxy ...," says an expert.

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Retirement planning Retirement income Social Security Annuities Healthcare costs Long-term care