Our daily roundup of retirement news your clients may be thinking about.
If workers have access to a 401(k) plan that offers automatic enrollment with a 6% default contribution and an opt-out option to boost contribution rate to at least 10%, it can be considered a quality plan, according to this article from Fox Business. An excellent 401(k) plan also offers diversified investment offerings and an above-average company match not lower than 5%. “When used together, these features address the psychological barriers, or inertia, that tend to get in the way of a person’s path to a well-funded retirement,” says an expert quoted in the article.
A report from Pew Research Center shows that the U.S. leads the countries with the most number of citizens aged 100 and older, according to this article from Money. Data from the Society of Actuaries also show that 65-year-old couples have a 50% chance of seeing one of them living up to the age of 92. This means that people should expect to have a longer retirement horizon ahead of them. “We’re definitely suggesting that people look longer than 30 years,” says an expert.
The cost of nursing home services is on the rise, with the annual medical cost of a private room in such a facility now standing at $100,375 based on data from Genworth Financial, according to this article on CNBC. The annual median cost of a room at an assisted living facility increased by 6.67% from 2017 to 2018, with the median rate for shared rooms rising by 4.11%. "These costs are outpacing the U.S. inflation rate, which is becoming greater competition when it comes to our wallet share," says an expert.
Creating a successful retirement plan is possible for clients in their 50s who are earning a paltry $30,000 every year, writes an expert for USA Today. The plan includes paying off debt in two years and immediately boosting savings rate to 8%, writes the expert. The plan should also require them to lower spending by 10% to free more money to save and reduce housing costs, add the expert.
