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

Do 529 plans' age-based funds fall short on diversification?
Age-based portfolios in 529 college saving plans share many of the same characteristics as target-date retirement funds, according to this article on Morningstar, but there also are difference your clients should know. Both gradually move from an emphasis on equities to fixed-income over time, and they aim to provide investors with a single, well-diversified portfolio. Age-based options in 529 college savings plans look different from target-date retirement bonds, however, because of the disparity in their time horizons. A Morningstar study found that 529 age-based portfolios have adequate exposure to large-cap U.S. equities and other core asset classes but are less exposed to more-specialized asset classes compared with target-date funds. Also, more target-date series incorporate more high-yield bond funds than do age-based portfolios in 529 plans, the study found. --Morningstar

There's good news at last on the retirement front
Clients in the middle and upper income groups can expect their income to surpass their expenses in retirement despite a shift in spending patterns, based on recent studies. "Your spending declines faster than inflation erodes your savings," says a retirement expert.
Certainly, people often start retirement with a long-deferred trip or other splurge, which can push spending above pre-retirement levels in the first years of retirement. But spending tends to decline pretty quickly after that, according to a recent study. Households that spend $50,000 at age 65 tend to see a decline by about 15% over the next 15 years, and about 20% over 20 years, according to the article. Higher spending households, with $100,000 in consumption, see spending drop 20% by age 80 and almost 30% by age 85, he said.

Congratulations, graduates, you have 70 years of learning ahead
A 21-year-old graduating student may still have nearly 70 years ahead as he or she expects to live for about 90 years, according to the Social Security Administration. The increase in average life span should have an impact on how young people prepare for retirement as well as what they need to do to remain productive and active throughout those years. Technology in particular is having an enormous impact on quality of life, this article says. Smartphone and app literacy is now becoming critical to a person's capacity to access services ranging from basic transportation to even health services. --MarketWatch

Don’t wait for a 401(k) to start saving for retirement
Fresh graduates need not wait to get hired by an employer offering a 401(k) plan to start building their nest egg, according to this article on Nasdaq. Even without a 401(k) plan, they can stash away a portion of their earnings in a traditional or Roth IRA. Young clients can open either of these accounts idependently at an online broker and may pick from the investment options that the broker offers. --Nasdaq

Why empty-nest spending is making the retirement crisis worse
Contrary to what experts think, seniors barely save after their adult children leave their home, according to Money. An empty nest windfall hardly occurs among seniors because they continue to help their adult children after college and they spend whatever extra money they got in restaurant meals, vacation and home improvements. Seniors are advised to downsize to free up money during this nest-egg stage, but many older people hesitate to take this option. --CNBC

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