Bank Investment Consultant offers an online scan every day that summarizes retirement news stories from a variety of sources. These are the mainstream “consumer” stories that your clients are likely to see and we feel that you should be aware of them too. Here we offer a sampling of the best items from the past month.

Active vs. Passive Investing

Investors can gain from both active and passive management, and contrary to common belief, there is no substantial proof that 90% of active managers don’t beat the S&P 500 index, according to a professional investor writing for MarketWatch. In addition, no index has been found that posts a better performance than its active peers under more favorable market conditions, he says. MaketWatch also offered the opposite opinion in a different article the same day that said investors are unlikely to benefit from active management as the long-term prospects of a company are difficult to predict given today’s fast global economy. While many highly literate investors choose active management, they should instead take a page from Warren Buffett’s book and buy common stocks through an index fund. --MarketWatch

Preparing Small-Business Owners for Retirement

Many small-business owners who are preparing for their golden years make the mistake of depending on the sale of their business to fund their retirement, as they usually overvalue their business, says a financial adviser. Another mistake they make is underestimating their personal expenses, a financial expert adds. Some small-business owners also fail to make use of financial products that can optimize their retirement savings, such as opening an individual 401(k) instead of an SEP IRA, an expert notes. --Wall Street Journal

How To Avoid the Biggest 401(k) Mistakes

It is a mistake for clients to leave their retirement money with their previous employer’s 401(k) plan instead of transferring it to an IRA, according to MarketWatch. Many 401(k) investors also commit the mistake of not rebalancing their 401(k) portfolios and of scaling down their stock exposure when the market underperforms, which, according to research firm Dalbar, usually makes for much lower returns than sticking with an S&P 500 index fund. To avoid these pitfalls as much as possible, clients are advised to invest in things under their control instead of speculating on the economy and other things beyond their control.  --MarketWatch

CDs Back in Fashion for Low-Risk Yield

A certificate of deposit is an attractive option for retirees who need yield from their investments as they pose no risk to the principal, with accounts up to $250,000 protected by the FDIC, according to CNN Money. CDs can also generate return without taking on extra risk, as two-year CDs can be sold with an annual percentage yield of 1.25%, higher than the expected yield from current two-year Treasury rates.  --CNN Money

3 Fixes for Social Security

As workers are now allowed to have longevity annuities in their tax-deferred retirement accounts, Social Security is being urged to increase full retirement age to 68, 69, or even 70, according to CNN Money. There are also other proposed reforms to enhance services for retirees, including one that seeks lower Social Security payroll taxes for those who intend to continue working through retirement. It is proposed that working retirees be given a hybrid form of Medicare merged with employer health insurance, and that Medicaid be revamped by creating a trust fund to cover long-term care costs.  -- CNN Money

Paying for Adult Children? Try Tough Love Instead

Older people need to put their financial welfare first and strive to make their adult children become independent, according to MarketWatch. Retirees may not be helping their children grow financially or emotionally if they continue to support them. They also need to agree with their spouses on what to do with adult children who are still dependent on them for support. Even if they decide to stop supporting their children financially, they can still help by giving advice on budgeting and finding a job.  --MarketWatch

Social Security Benefits Situational

There is no rule for maximizing Social Security. It depends on earnings and those of current or ex-spouses, as well as when those earnings occurred. Forbes featured a widow who took her retirement benefits first and planned to switch to her survivor benefits at full retirement age. But she didn’t account for everything that should be considered and did not maximize her benefits.  --Forbes

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