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

Taxes can be a real threat to your retirement
Many clients fail to account for the impact of taxes on their income after they retire, and this can spoil their retirement plan, according to this article on Kiplinger. Contrary to what some people think, their tax burden may not decline after leaving the workplace for good, as they will need to generate the same amount of their preretirement income to support their lifestyle. Moreover, they may also lose some of the tax breaks after they retire and future tax changes may push them to a higher tax bracket.

The Internal Revenue Service headquarters in Washington, D.C.

Swelling retiree ranks create negative impact on returns
Although some experts believe that investment returns will dwindle as baby boomers retire and start tapping into their retirement plans, other analysts don't share the view, as today's retirees tend to underspend and remain thrifty, according to this article on CNBC. As retirees opt to keep their investments while other younger investors build their nest egg, asset prices are likely to rise in the short term, says an economist with the Center for Retirement Research at Boston College. However, the increase in supply of savings could bring down returns in the long term, the expert adds.

5 factors that determine your retirement withdrawal rate (and which one is most
important)
A study has found the level of guaranteed income to be the most important factor in determining optimal spending rates, and retirees with lower spending flexibility should consider reducing their withdrawal rates, writes Wade Pfau, a professor at The American College, in an article on Forbes. However, the early part of retirement could suffer if seniors opt for "safe" withdrawal rates and end up with unspent cash by the time they die, money that they could have spent to enjoy the golden years, writes the expert. "Retirees need to think about a more complete model that incorporates all of this when developing their retirement income strategies."

New rule could create a $10 trillion ETF juggernaut by 2020
The exchanged traded fund market is expected to grow significantly in the coming years as financial advisors are more likely to recommend exchange-traded products under the new Labor Department rule imposing fiduciary standard on retirement advice, according to this article on MarketWatch. “Because of the unique structure of ETFs, and because of advisers being held to higher standards, we think the market could grow exponentially. Going to over $5 trillion in assets seems pretty easy; we think it could top $10 trillion by 2020,” says an expert with BNY Mellon’s Alternative Investment Services.

Now, your financial advisers will have to put you first (sometimes)
The new Labor Department rule that requires financial advisers to observe fiduciary standards when giving guidance to retirement investors covers most retirement accounts, such as 401(k) plans and IRAs, but does not apply to 403(b) accounts owned by government employees and church-related plans, according to this article on The New York Times. Under the new rule, advisers are expected to offer new or different types of mutual funds or annuities that are for the investors' best interest.

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