Inflation, social security, taxes, custom indexing: Best of retirement news

Top articles for retirement advisors

November 1, 2021 10:06 AM

Advisors trying to plan for their clients' retirements faced a particularly tough last few months as the Biden Administration's tax plans struggled to take shape and the market hit record highs coupled with increasing fears about inflation and supply-chain woes. With so much uncertainty about what clients' tax rates are likely to be and which tax strategies might work best for their portfolios, advisors also looked closely at prospects for Social Security reform and other policy developments that could affect retirement prospects for clients.
Here are some of our most popular retirement articles since the second quarter began.

Social Security: How long will it last, and can clients count on it?

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The federal government's signature entitlement program is in trouble, it's no secret. If politicians do nothing, retirees will see their benefit drop by 20% by 2034. And paying out those distributions is about to get more expensive for the government, since the largest cost-of-living adjustment in decades was just announced. There are two competing bills battling their way through Congress, which gives hope to advisors worried about their clients' retirement prospects — but neither piece of legislation is a sure thing.

Retirement Advisor Confidence Index: How do advisors feel about their clients' readiness?

Oxana Melis/Unsplash

When it comes to their views on how ready their clients are for retirement, advisors are getting scared. That's what our latest Retirement Advisor Confidence Index showed: advisors are starting to give in to inflation fears and worries that the market will finally pass its peak and start heading downward. See all our coverage of this proprietary index here.

Inflation: How rising prices could affect portfolio strategy

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For years, since interest rates began to fall, advisors have set inflation to the side when planning their clients' investments. That's begun to change. Now, with gas prices increasing everywhere along with many other goods, advisors they're beginning to pay attention to which asset classes are likely to perform well in this new environment, especially with the strong possibility that interest rates will rise as the Fed has said.

Taxes: Plans for rate hikes change shape by the minute in Washington

Dennis Brack/Bloomberg News

What will happen to my taxes, and what will that do to my investments, now and in retirement? It's the call every advisor received from most clients this quarter as the Biden tax bill transmogrified by the minute. Nearly every week brought news of a new aspect of the tax plan, raising rates or excise taxes on billionaires, then millionaires, as well as investors of various kinds. The tax strategies advisors were using suddenly looked doomed, and clients went scurrying to find estate planners before year end. So far, there's no definitive answer about which provisions will become law, but it's nearly certain that taxes will go up in some form.

Custom indexing: The personalization of retirement migrates downward from family offices

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Bloomberg News

Investors headed toward retirement are not always content to entrust their portfolios to a mutual fund manager or even an ETF. Many come to their advisors with specific briefs: ESG signals they want to follow, a particular country or even city where they'd like to invest, or an industry they want to focus on in closer detail than a sub-sector fund of the S&P 500 would allow. At the same time, a growing number of large firms are moving into direct indexing, buying or partnering with fintech companies that offer software to do just this. Franklin Templeton bought such a firm, as did JPMorgan Chase. It's a trend that looks likely to continue as retirement investors clamor for more personalized investing the way high net worth investors have always received.