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What will retirement look like in 50 years?

Retirees are advised to tap into their Roth accounts last to minimize hefty tax bills associated with 401(k) distributions.

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

What will retirement look like in 50 years?
The next 50 years could be a period for lawmakers to fill in the cracks in Social Security and secure the program's long-term stability, writes an expert in MarketWatch. "The three major cracks are the coverage gap, the lack of insurance for long-term care expenses and the reluctance/inability of retirees to use their house as a source of retirement income," according Alicia Munnell, the director of the Center for Retirement Research at Boston College. "In addition to filling in these cracks, Social Security’s finances need to be stabilized. This can be done without major cuts to benefits and can be done more equitably if the costs associated with the program’s legacy debt can be moved off the payroll tax."

5 things clients must know about retirement
Clients are advised to educate themselves on retirement guidelines to develop an effective plan and secure their savings, an investment advisor writes in Kiplinger. They should know that Social Security benefits could be subject to both federal and state taxes, that they can continue contributing after-tax dollars to a Roth IRA past the age of 70 and that retirees qualify for a larger tax deduction, according to the expert. Many seniors also fail to include travel expenses in their retirement plan, while about a third of retirees living outside a nursing home or facility are living alone.

401(k) vs. IRA vs. brokerage account: How should clients split up their assets?
Young workers who are looking for the best place to put their retirement savings are better off dividing the money equally in a pretax retirement account, a Roth account and a brokerage account, an expert in this Motley Fool article says. This strategy could be "the ideal ratio as you're building assets because that will lead to ultimately the most flexibility when you retire," according to an expert.

The top 20 nearly doubled their gains over the last year, data show.
October 23

The right mindset that will help secure your client’s financial future
Setting up a budget, building an emergency fund and saving for retirement are some of the strategies clients can use to secure their future finances, according to this CNBC article. Clients are advised to start building their retirement savings as early as possible and make the most of their 401(k) and other tax-advantaged accounts. “To figure out a good savings target and make a plan accordingly, people should look to some of the tools at their disposal,” according to a CFP. “This can be as simple as one of the many retirement calculators online, or it can be getting personalized advice from a professional.”

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