A different take on taxes for employees planning to retire early

Welcome to Retirement Scan, our daily roundup of retirement news.

This is what super savers who plan to retire early are doing differently
Super savers are more likely than non-savers to plan an early retirement, according to this CNBC story which cites a TD Ameritrade study. These folks work toward their goal by building their reserves early, making more investments and picking options with low fees. They also craft well-diversified portfolios and invest in post-tax Roth IRAs. “They’re looking at their future and saying, ‘If I pay taxes today, I could potentially have more tomorrow,’” says one expert.

An elderly couple walk arm-in-arm past an outdoor cafe terrace in Edinburgh, U.K., on Wednesday, July 31, 2013. The latest opinion polls show supporters of Scottish First Minister Alex Salmond's campaign for independence lagging behind those in favor of the status quo by more than 20 percentage points ahead of the Sept.18, 2014, referendum. Photographer: Simon Dawson/Bloomberg
An elderly couple walk arm-in-arm past an outdoor cafe terrace in Edinburgh, U.K., on Wednesday, July 31, 2013. The latest opinion polls show supporters of Scottish First Minister Alex Salmond's campaign for independence lagging behind those in favor of the status quo by more than 20 percentage points ahead of the Sept.18, 2014, referendum. Photographer: Simon Dawson/Bloomberg

Is a 90% stock allocation too aggressive for retirees?
A strategy of allocating 90% of their assets in stocks could be too aggressive for some retirees, according to an expert in this Motley Fool article. However, a stock allocation higher than 60% could be fine as long as retirees receive pension benefits and have other sources of guaranteed income such as a business or rental property to cover their living expenses, the expert says.

3 spending habits that could ruin your employees’ retirement
There are some spending habits that workers should avoid to better protect their retirement savings, according to this article in Fox Business. For example, employees should reject the temptation to purchase unneeded items simply because they are on sale. Also, not tracking small expenses and spending any unexpected windfalls can also hurt th retirement savings.

Double your workers’ annual retirement contribution with this catch-up provision
Employees working for state and local government and nonprofit organizations should take advantage of the catch-up contributions in their 457 plans, according to this article on TheStreet. A 457 plan is a non-qualified, tax-advantaged, deferred compensation retirement strategy that enables participants who are three years away from retirement to do a catch-up. This could be double the annual limit, or the basic annual limit plus the unused amount of the limit in the prior years, whichever is lower.

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