Welcome to Retirement Scan, our daily roundup of retirement news your clients may be talking about
Women have a lower financial literacy compared with their male counterparts, according to a survey in this MarketWatch article. Twenty-six percent of women were confident that they would retire comfortably, while 32% of men voiced the same confidence, according to the survey by the Aegon Center for Longevity and Retirement. Moreover, only 21% of female workers claimed that they were on track to achieve the retirement savings goals, compared with 29% of men. “It’s not an easy skate for most women, me included, to stash away enough retirement savings to cover potential living expenses for our last decades,” an expert writes. “A recap of the challenges women face: There’s the pay gap between women and men, the cost of time out of the workforce for caregiving, and the often-devastating financial reality of a divorce at midlife.
Seniors who consider relocating in retirement are advised to weigh their options, as their decision could affect their Social Security benefits, according to this article in Motley Fool. For starters, retirement benefits are subject to a state tax in 13 states. State tax rates for retirement benefits vary among these states. Social Security benefits may also be taxed at the federal level if their combined income — adjusted gross income plus 50% of their benefits — exceed a certain threshold, according to the article.
Clients who own a business are advised to consider setting up a cash balance, defined-benefit plan, which is a tax-efficient strategy to create a retirement pension, a financial advisor writes in this article from TheStreet. Cash-balance plans are similar to traditional defined-benefit pension plans and also have the same attributes as 401(k) plans, the expert says. "Cash balance plans are qualified ERISA plans — which means that contributions are treated as above-the-line tax deductible expenses."
Broad-basket commodity sector funds, as well as those long on oil, natural gas and precious metals, accounted for more than half of the laggards.
The total debt burden of seniors older than age 70 rose 543% to $1.1 trillion from 1999 through 2019, according to data from the Federal Reserve Bank of New York in this CNBC article. The total debt of seniors in their 60s also increased 471% to $2.14 trillion, the survey found. The deteriorating "social safety net" of the U.S. has “disproportionately harmed” American seniors, this article adds, citing a separate study.
