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

The hard truth about Americans' retirement options

Americans face three possible options in retirement, and these are (1) to accept that they will spend their golden years in poverty, (2) to limit spending while working to save more money, and (3) to continue working past their retirement age, according to Alicia H. Munnell, director of Boston College's Center for Retirement Research. Social Security is slowly reducing replacement rates while traditional pensions are being replaced by 401(k) plans, and most people "are not well prepared for this burden." Workers need to take advantage of their 401(k) plans, and the government should shore up Social Security instead of reducing benefits, she adds. –Los Angeles Times

Why phased retirement may become the hottest boomer benefit

Phased retirement is becoming popular among baby boomers who are unprepared to retire but eager to slow down at work, according to this article on Time Money. With a new federal-employee phased retirement program being launched this month, more employers are expected to offer such an arrangement to senior workers. “Phased retirement allows you to dip your toes into the shallow end of the retirement pool,” says Jessica Klement of the National Active and Retired Federal Employees Association. –Time Money

Choosing to live abroad in retirement

Seniors need to make a big adjustment and hurdle many challenges if they decide to retire outside the U.S., according to an article on The New York Times. If they opt to live in another country, retirees are advised to connect with other expatriates in that country, and check its health care system. They also need to plan on how they will manage their finances as well as taxes, as they are required to comply with American taxation “without regard to where they live,” says Ben Garfunkel of KPMG’s Global Mobility Services. –The New York Times

How Social Security raise impacts retirees

The 1.7% increase in Social Security benefits starting in January may or may not be enough to cover an increase in retirees' living costs, but the annual adjustment is "a very valuable feature" of the system, says Christopher Jones, chief investment officer for Financial Engines. If the retirement benefits are insufficient to pay bills, retirees may consider working part-time or renting out a room in their house to augment their limited income, Jones says. They may also downsize or move to a home with lower cost, accept a tenant in their house, and look for alternative health plans under Medicare, he adds. –USA Today

Social Security Q&A: Should my lower-earnings husband file early then switch to spousal at 66?

A 60-year-old wife who earns bigger than her husband is advised to take her retirement benefit when she turns 64 so her spouse who is two years her senior can file for a spousal benefit on her record, according to this article on Forbes. This will allow her husband to defer his own retirement benefit and increase the monthly benefit value when he files for his benefit at 70. The wife may also suspend her benefit when she reaches her full retirement age of 66, and may resume the benefit when she turns 70. –Forbes

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