Our daily roundup of retirement news your clients may be thinking about.
How to turn $298 per month into $1 million nest egg
Clients can end up with $1 million in retirement by saving $298 every month and maintain an investment portfolio consisting of stocks, corporate bonds and municipal bonds, according to this article on Forbes. This investment mix could generate 13% returns annually, enabling retirement investors to amass $1 million over a 30-year horizon.
Saving for college? Consider a Roth IRA
A Roth IRA is a retirement savings vehicle that clients can also use when saving for college expenses, according to this article on Motley Fool. Like a 529 college savings plan, a Roth IRA accepts after-tax contributions and provide tax-deferred growth and tax-free withdrawals. However, unlike a 529 plan, a Roth IRA doesn't charge any penalty on withdrawals for non-qualified expenses, giving more flexibility for clients.
In retirement, it’s save now or pay (a lot) later
As research has shown, people should have a vision for the future to make themselves more motivated to save for retirement, according to this article on The Wall Street Journal. Clients can also boost their motivation to prepare for the golden years by breaking down their long-term goals. It also helps to focus more on the contributions they make to their retirement accounts than on the account balance, says an expert. “Otherwise you could cut back on your savings when returns are good or lose hope when the markets are bad.”
Q&A: Making sense of Social Security deemed filing rules
A client who was born in August 1954 will be deemed to have applied for her Social Security retirement subject if she files for a spousal benefit on her husband's record, according to this article on USA Today. This means she will not get the maximum monthly benefit amount if she opts to apply for her benefits right now, says an expert. “If she were to file now, the maximum monthly benefit she would receive would be reduced to approximately 35% of your benefit amount.”
A health savings account could power your retirement
Clients with high deductible health plans have the option to use their health savings account to save for retirement, according to this article on MarketWatch. “One of the major benefits of the HSA is the tax-deferred growth and tax-free distributions if proceeds are used for qualified medical expenses,” says a a financial planner. “Even after you leave employment, funds left in your HSA can be used to pay for medical expenses throughout retirement.”
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