The most common retirement mistakes among millennials
Welcome to Retirement Scan, our daily roundup of retirement news your clients may be talking about.
The most common retirement mistakes millennials make
Putting student loan payments ahead of retirement savings, credit card churning and long-term planning is one of the biggest mistakes millennials make with their finances, according to a CPA in this Kiplinger article. Many younger clients also make the mistake of adopting too conservative of an approach, and should consider diversified, low-cost equity investments to boost returns, according to an expert. Those who want to diversify their portfolio should consider real estate investments, which offer favorable long-term capital gains tax treatment on 1231 property and other tax benefits.
Switching gears to retirement
Seniors finding difficulty adjusting emotionally to retirement are advised to set up a bucket of activities to keep them active, according to this article in The New York Times. For starters, these clients are advised to revive an old hobby or interest. It also pays to be surrounded by positive and energetic people and stay physically fit, according to the article. It also pays to be surrounded by positive and energetic people, to stay physically healthy, to achieve inner balance and to cultivate an open mind.
Seniors can’t live on Social Security alone. Here’s why
Clients should ensure that they are building their retirement savings, as they cannot solely rely on Social Security for income, according to this article in Motley Fool. That’s because retirement benefits can replace only a fraction of their pre-retirement income, cost-of-living adjustments do not accurately reflect inflation and Social Security also faces financial woes in the near future, according to the article. Working clients who cannot max out their contributions are advised to save consistently to secure their retirement.
What happens if clients’ parents outlive their resources?
Adult children should start preparing financially to support their aging parents in the future, as a recent study shows that an increased life span makes their elders outliving their savings more likely, according to this Forbes article. Clients should ensure that their aging parents organize their finances and have long-term care plans, an expert says. They are also advised to have their parents consult a professional financial planner to address the risk.