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College loans are making it hard for parents to retire: Retirement Scan

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College loans are making it harder for parents to retire
Retirement does not look good for many parents who are forced to take college loans to help finance their children's education, according to this article on MarketWatch. Based on data from the Government Accountability Office, almost 2 million Americans aged 50 to 64 had Parent Plus loans last year, with 200,000 retirees aged 65 and older carrying the same loans. Parents who have a hard time balancing loan repayments and retirement saving may opt for an extended repayment or graduated repayment plan.

Roth, traditional, or taxable? The best answer may be ‘yes'
Investing for retirement using a combination of a Roth, a traditional IRA or 401(k), and even a taxable account may be the best move that clients can make, according to this article from Morningstar. That is because using these retirement accounts together allows for tax diversification, which puts clients in a better position to manage the impact of future tax changes. Holding these accounts also offers control over tax liability on income after retirement, as they have a diversified pool of assets from which to draw funds for their needs.

What to do now to retire better
This article on The New York Times website offers tips on what clients can do to improve their retirement prospects when reaching a certain age. For example, clients in their 20s and 30s should focus on knowing the basics of managing finances, start saving, diversify their investments and avoid credit card debt as much as they can. Those 60 and older are advised to study their retirement income sources, control their fixed monthly costs and consider working longer. They should also shift to a more conservative approach to investing and create a sustainable plan for tapping into their retirement resources.

Retirement spending strategies to maximize happiness
Retirees can maximize their happiness by having a drawdown strategy that enables them to vary their retirement withdrawals over time, instead of sticking to one that gives them the same amount of funds to spend every year, says a behavioral economist with UCLA’s Anderson School of Management. “It’s important for financial advisers to work with clients so that their drawdown approach reflects their own individual preferences," says the expert. "This approach can also help people deal with the anxiety of running out of money, since they are spending less early in retirement."

Retirees should look carefully before leaping into a relocation
Clients should make a number of considerations before pursuing their relocation plan in retirement, according to this article on CNBC. For example, they should look into the tax implications of moving to another state, says a certified financial planner. The state where they plan to move to may impose no state income taxes but could have hefty property, sales and estate taxes. Moreover, they also need to account for their real estate expenses in their new home as well as access to medical care and social services, proximity to loved ones and other recreation facilities.

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