Our daily roundup of retirement news your clients may be thinking about.

How to retire happily on less than $1 million
Although people are told to have at least $1 million in savings to live comfortably in retirement, most clients would actually need a smaller nest egg to maintain a modest lifestyle, according to this article on Motley Fool. Despite the projected increase in healthcare expenses, clients can expect their total living costs to decline after they retire, as they will owe lower or no income taxes and have fewer items on their budget. Based on the 4% withdrawal rule, a typical retired household should have at least $500,000 in their portfolio to secure their retirement.

Source: Bloomberg News
Source: Bloomberg News

What you should know about making 403(b) catch-up contributions
Teachers and employees of nonprofit organizations can make up to $6,000 in catch-up contributions to their 403(b) plans when they reach the age of 50, according to this article on Kiplinger. They can also contribute an additional $3,000 to their 403(b) plan per year if they have been with their current employer for at least 15 years and their average annual contribution is below $5,000. This "15-year rule" means that they can make catch-up contributions to their 403(b) plan even if they are below the age of 50, but the lifetime maximum catch-up contribution is limited to $15,000.

5 reasons millennials aren't saving for retirement
Many millennials are not building their nest egg because they work for employers that offer no retirement plans, according to this article on Yahoo Finance. Many younger workers also fail to enroll in their employer-sponsored 401(k) plan or meet the plan's eligibility requirements, preventing them from saving for the golden years. Other millennials cite lower salary and other financial obligations as reasons for not preparing financially for retirement.

How to avoid penalties on Roth IRA distributions
Clients who withdraw from a Roth IRA face a penalty if the account is less than five years old, according to this article on MarketWatch. However, the five-year rule no longer applies if clients own other Roth IRAs that exist for more than five years and they reach the age of 59 1/2. Roth IRA distributions are also taxed based on ordering rules, which require investors to withdraw their regular contributions first before earnings and other contributions. This means that the first withdrawal below the amount of regular contributions are not taxed.

Some people have a crazy idea of what they can afford in retirement
Although experts disagree on the most sustainable retirement withdrawal rate, clients may decide on the rate that is deemed most reasonable to them based on their circumstances, according to this article on Money. Retirees may start with a 4% rate if they are on Social Security, and adjust the rate in the succeeding years when necessary. For example, they may skip the inflation increase or reduce their withdrawals if their portfolio returns drop significantly because of a market downturn.

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