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

6 retirement asset-allocation pitfalls to avoid

Retirement savers are advised to avoid an overly conservative approach when creating asset allocation in their portfolios, according to Morningstar. They also should know to differentiate risk tolerance from risk capacity and stop ignoring their behavioral track record. Clients also need to factor in income sources outside their portfolio as well as other goals not related to retirement, and fully understand their asset allocation. –Morningstar

New rules for reverse mortgages

A reverse mortgage is increasingly becoming a popular option among homeowners as a source of income in retirement because of recent changes to the rules governing reverse mortgages, according to Money. “There’s a totally different way of thinking about these now,” says John Salter, a professor at Texas Tech University. Those who are interested in applying for a reverse mortgage need to know that the loan amount will be based on their age and other factors and they can use the loan as a safety net, expect lower cost and get protection for their spouse in case they die. –Money

Should clients claim Social Security early?

People are generally living longer so they are usually better off delaying their Social Security retirement benefits to boost their monthly benefit, according to CNBC. However, filing for retirement benefits early is a better option if they are in poor health and don't expect to have a long life span. "If you think Social Security is going to run out, that is not the right reason to take Social Security," says Kevin McGarry, director of the Nationwide Retirement Institute. –CNBC

Don't limit longevity protection to $125,000

While qualified longevity annuity contracts offer retirement savers an option to invest within their retirement plans and guarantee income in retirement, clients limit their longevity protection to $125,000, according to MarketWatch. Those who want to secure more in retirement income and invest according to their needs may consider other types of fixed-income annuities, such as single premium immediate annuities and fixed index annuities. –MarketWatch

Hybrid long-term care insurance policies

Insurers have developed hybrid insurance policies to address concerns about traditional long-term coverage by combining long-term care funds and life insurance or an annuity, writes Wade Pfau, professor at The American College and a principal with McLean Asset Management. Since these hybrid products will charge a fixed premium as opposed to traditional policies that could increase future premiums, insurers could not catch up with ensuing market rates, resulting in lower yields, writes Pfau, citing Michael Kitces. As Kitces suggests, clients are advised to "‘buy traditional long-term care insurance and invest the rest’ as an analog to the popular refrain about buying term-life insurance," Pfau says. –Forbes

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