Welcome to Retirement Scan, our daily roundup of retirement news your clients may be talking about.
Unknown longevity is among the top risks most advisors will have to address when planning a client’s retirement, according to Wade Pfau, professor at the American College and principal at McLean Asset Management, in this article for Forbes. "A long life is wonderful, but it is also costly and a bigger drain on resources," the retirement expert explains. "Half of the population will outlive their statistical life expectancy, and that number is only increasing as scientific progress increases the number of years we can expect to live."
Saving for retirement as early as possible is one of the financial lessons that parents are advised to teach their children, writes an expert in Kiplinger. That way, they can give their savings more time to grow through compounding, he explains. “A little can become a lot when they start early and save over time. Especially with tax-deferred qualified accounts, such as IRAs and 401(k)s. For example, if they were to save $55 per month in a retirement account, they could potentially accumulate $16,267 over a 10-year period.”
More than half of Americans have a side hustle, with 80% of respondents in a recent survey saying they were interested in making it a full-time job, according to this CNBC article. Clients who consider becoming self-employed need to make a number of considerations, as they would lose certain benefits, such as access to workplace retirement plans, according to the study fromSunTrust. Losing access to workplace 401(k) plans doesn't mean they can no longer build their savings, as they have the option of saving in tax-advantaged accounts, such as a Roth IRA and SEP IRA.
Just over one in 10 advisors uses a digital investment tool. This, and other findings of Financial Planning’s 2019 Tech Survey.
Clients are advised to use their long-term goals, not the market, as the benchmark for investing, an expert in Morningstar writes. For example, clients who are in the accumulation stage should ask themselves if they are on track to reach their goals as planned, according to the expert. "If you have reached your accumulation goal and are now in the withdrawal stage, then the question you need to answer is, 'Did I beat inflation?'"
