Our daily roundup of retirement news your clients may be thinking about.
6 misunderstood IRA rules and strategies
Clients are allowed to hold unconventional investments in their IRA, but they should know that there are risks involved, according to this article on Forbes. A Roth IRA is also an excellent savings vehicle for older people as it is for younger clients. While Roth IRA investors face no tax liability for distributions from the principal, they need to wait for five years or reach the age of 59 1/2 to avoid taxes on distribution of income and gains from the account.
Serving as caregiver takes toll as you age
As people are expected to have a longer life span, many clients may grow old looking after family members and face personal struggles, such as their own declining health and isolation as a result of their friends' death, according to this article from Kiplinger. Older caregivers, especially wives, are vulnerable to falls and other injuries as they do physical chores, like assisting their spouse move from a bed to chair. “Wives will sacrifice their own health to keep their husbands at home,” says a family consultant. “Because they often put off their own care, they get sicker and die earlier than non-caregivers.”
The 10 US cities where $1 million goes the furthest in retirement
A study by SmartAsset has found that McAllen, Texas, Harlingen, Texas, Richmond, Ind., Kalamazoo, Mich., and Cleveland, Tenn., are the U.S. cities where a $1 million nest egg will last the longest, according to this article on CNBC. Retirees can also expect their $1 million savings to last longer if they live in Martinsville, Virginia; Knoxville, Tennessee; Ashland, Ohio; Jonesboro, Arkansas; and Norman, Oklahoma, than when they live in other parts of the country.
A growing cult of millennials is obsessed with early retirement. This 72-year-old is their unlikely inspiration
Many millennials are looking up to a 72-year-old book author for inspiration to gain financial independence and have an early retirement, according to this article on Money. In her book, the retiree writes about low-cost index mutual funds or exchange-traded funds and recommends real estate investment to boost their financial prospects. While the author suggests a 4% withdrawal strategy, she says that clients should consider option with caution. “Remember, this is a general example and not specific financial instructions.”
Retirement saving: How to financially prepare to be a millionaire
An expert says that clients who want to be a millionaire by the time they retire should boost their knowledge about money management and make the most of their employer-sponsored retirement plan, according to this article on Fox Business. “Set it up to where it’s happening automatically – there’s nothing you really need to think about,” says the expert. “Just don’t touch it, leave it alone and watch what happens and you’ll look up in 10, 12, 15 years and you’ll see it growing exponentially.”