Our daily roundup of retirement news your clients may be thinking about.
Corporate pensions tread water in 2016
A report from Goldman Sachs Asset Management shows just a 1% increase in S&P 500 company pension plans' funding levels despite the $40 billion in contributions that these firms made to their plans, according to this article on The Wall Street Journal. The outcome could be explained by continued decline in interest rates that write off any gains from these contributions and strong stock markets.
Can the 'rule of 55' help you plan for retirement?
"Rule of 55" offers 401(k) participants an option to withdraw their retirement savings penalty-free if they opt to retire, resign, or get fired at the age of 55, according to this article on Forbes. Clients should assess their situation to determine if there would be a possibility for them to retire, quit or get laid off before their retirement age. They should also consider consulting their financial adviser on how they can integrate the "Rule of 55" into their retirement plan to prepare any of these possibilities.
6 millennial money habits every retiree should learn
Today's retirees can learn from millennials when it comes to handling their finances, according to this article on Kiplinger. For example, millennials are creative in making money, such as taking on part-time jobs in the sharing economy. Millennials are also willing to spend to experience new things instead of accumulating material wealth. A survey has also found that most young people leave no stone unturned just to save for the future.
Should real estate be part of my retirement plan?
Clients may want to include real estate in their retirement portfolio as part of their investing strategy, according to this article on CNNMoney. "I think it's a really smart idea to look at real estate as an income-producing pension replacement," says a certified financial planner. While a real estate investment helps clients diversify their portfolio and provides a regular rental income, they should prepare for unforeseen costs, extra work and commitment that come with real estate investing.
Retirees: High-quality bonds still make sense
Although interest rates are on the rise and the risk of inflation remains, retirement investors should continue being invested in high-quality bonds, says Christine Benz, Morningstar's director of personal finance. Bonds are a better investment option than equities for shorter spending horizon, the expert says. Moreover, high-quality bonds are a better alternative to cash, as they have the potential to generate returns, she adds. "There's also the risk that with cash yields as low as they remain today, that you may not be able to keep up with inflation with a sizable cash allocation."
Register or login for access to this item and much more
All Bank Investment Consultant content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access