Our daily roundup of retirement news your clients may be thinking about.
A Wells Fargo study found that although young workers may be over-confident about their investing skills, they are good at handling their 401(k) plans. About 28% of them contribute at least 10% of their salaries. The number of workers who have incomes of more than$100,000 and who save at least 10% of their earnings increased 15.3%, and while these workers are mostly baby boomers, only 7.7% of 401(k) participants aged 50 and above take advantage of their plans' catch-up contributions, the study found. "We're seeing the first generation that had the full, out-of-the-gate use of tools like auto-enrollment and target-date funds, and it's really getting people into plans early and getting them diversified," says an executive with Wells Fargo. --Bloomberg
Many people have misconceptions about Social Security, and these misunderstandings result in lower retirement benefits for them, according to this article on CNBC. One of the common mistakes that seniors make is to start collecting their retirement benefits as soon as they reach the age of 62 instead of delaying their benefits for a bigger Social Security check. "Some [prospective clients] know there's a reduction in benefits before their full retirement age, but they don't understand exactly how much of a reduction it will be or that it's permanent," says an investment adviser. --CNBC
Developers and senior-housing operators are providing retirement facilities in high-rise condominium in an attempt to attract the younger portion of the senior market in cities across the U.S., according to this article on The Wall Street Journal. Younger seniors who have an active lifestyle “don’t want to feel like they are tucked away in some suburb”as they get older, says an expert with a health-care consulting firm. “If you are getting that younger resident who is not 80 yet, that’s someone who is going to want that urban environment and pay for it.” --The Wall Street Journal
Preparing for retirement poses greater challenges for women than for men, so women should be extra diligent to secure their golden years, according to this article on USA Today. They are advised to save early and aggressively while they can and to consider contributing to an IRA. They should also make the most of the saver's credit and other tax deductions for their contributions to retirement accounts. Women need to consider the possibility that they will retire earlier than planned. "Almost half of workers retire earlier than expected, due to health problems, downsizing/layoffs or the challenge of caring for a spouse or family member," says an expert. --USA Today
Like commuters during the morning rush hour, retirement investors should avoid "changing lanes" in an effort to outperform the market, according to this article on MarketWatch. Switching to winning stocks based on market news means active trading that may result in bigger costs, more taxes, and greater risk exposure. Retirement savers should "stay in their lane" and avoid getting ahead of the others by maintaining a well-diversified portfolio of index funds. --MarketWatch
