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When should clients start saving for their parents’ retirement?

Welcome to Retirement Scan, our daily roundup of retirement news your clients may be talking about.

Have clients started saving for their parents’ old age?
Gen Xers caught in the middle of two generations need to start saving for their parents' retirement, a study by Mavencare suggests according to this article in MarketWatch. This means they should discuss aging with their parents, according to the study. “Increasingly, the success of one’s financial plan is dependent on family members being financially prepared as well,” according to an expert. “If a relative needs money, this could put tremendous pressure on my client’s plan and in extreme cases, blow it up.”

Muni bonds are a good alternative to annuities and other fixed-income vehicles for generating tax-free income, an expert says.

Should clients fear a bear market?
A bear market should be more of a concern for retirees in the accumulation stage than for those in the decumulation stage of investing, an expert on Kiplinger writes. That's because retirees won't have time to recoup the losses from a downturn, increasing the risk of running out of money, the expert explains. Retirees who are concerned about the impact of a bear market on their portfolio are advised to minimize their risk exposure and reduce their withdrawal rate while in the early years. They should also consider working longer and create a guaranteed income source and cash reserves.

Annuities are a better deal for women than men
Women can expect higher benefits than men from an income annuity in a workplace retirement plan, as gender-neutral pricing is required in the application process, writes Benjamin Harris of Kellogg School of Management’s Public-Private Interface in The Wall Street Journal. "In practice, this unisex-pricing standard is a boost for women due to substantially longer life expectancy: A 65-year old woman can expect to live, on average, about three years longer than a man of the same age," he writes. "And since more years of life mean extra annuity payments, women can expect to get a lot more from their annuity over a lifetime."

“Not every muni is trying to achieve the same thing,” an expert says.
October 16

5 sources of retirement income that aren't taxable
For clients looking for tax efficient ways to save for retirement, this article from Motley Fool has laid out five tools for seniors. Roth IRAs and Roth 401(k)s are among the sources of retirement income that are not subject to taxes, according to the article. Retirees will also owe no taxes on yields from municipal bonds and life insurance cash-outs. Distributions from an HSA are also non-taxable if the withdrawn amount will be spent on qualified medical costs, while Social Security benefits will not be subject to taxes if the provisional income does not exceed a certain limit.

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