Our daily roundup of retirement news your clients may be thinking about.
Financial advisors are telling investors to make the necessary changes to their portfolio to prepare for a market downturn, according to this article on CNBC. As the stock market continues to remains strong, clients should stress-test their portfolio and ensure that it reflects their risk tolerance. For those who are investing in the long-term for retirement, "it's easier to remain unemotional because you have time on your side," says a certified financial planner.
A survey by GOBankingRates has found that more Americans are stashing more cash in their 401(k)s than in savings accounts, according to this article on personal finance website Motley Fool. However, many of them are not saving enough for emergencies. This poses a problem because they could end up in debt if they have no savings to tap to cover unforeseen expenses. Tapping their 401(k) plan before reaching the age of 59 1/2 can also be a mistake, as they would face a 10% early withdrawal penalty.
Workers are advised to account for their 401(k) plan when changing jobs, according to this article from Kiplinger. They should avoid cashing out their 401(k) plan when leaving a job, and consider rolling the assets into their 401(k) plan with their new employer. Another option is to move the funds to an IRA. Before rolling the assets, clients should consider the investment costs and other factors to ensure they make the right decision.
Clients should consider their personal circumstances to determine whether there is really a need for them to invest a portion of their savings in an annuity for guaranteed income in retirement, according to this article on CNNMoney. There are different types of annuities to choose from, and the annuity type they pick may not truly address their needs. For example, an immediate annuity may not be a good option for clients who expect to have a shorter life span.
