Our daily roundup of retirement news your clients may be thinking about.
Why do so many people claim Social Security at 62?
Many seniors opt to file for Social Security as soon as they turn 62 because of poor health, according to this article on Motley Fool. Some are also forced to retire early because of disability, layoff and health issues, prompting them to start collecting their retirement benefits as soon as they can. Other retirees decide to apply for retirement benefits because of fear that the program will reduce their future benefit payouts as a result of the program's financial woes.
The 26 cheapest states for retirement
Arkansas, West Virginia, Oklahoma and Mississippi are among the states with cheapest cost of living for retirees, according to this article on Kiplinger. However, this does not mean that these states are the best locations for people to retire. For example, Indiana is one of the cheapest states but is the least tax-friendly, as retirement income and Social Security benefits are taxed as ordinary income.
Most Americans distrust their 401(k) plan providers
Only 30% of Americans polled by the National Association of Retirement Plan Participants trust their own retirement plan provider, according to this article on MarketWatch. “Low trust means investors may save at lower rates and have suboptimal savings,” says an expert with the NARPP. “A low-trust environment is hindering people’s ability to make good financial decisions.”
21% of Americans have no retirement savings at all
Twenty-one percent of Americans have not saved any amount for retirement based on a survey by Northwestern Mutual, according to this article on Fox Business. Nearly two thirds of the participants claimed that they would outlive their savings earlier than expected, and the results show that most of baby boomers would be forced to defer retirement to work. "Continuing to work later in life should be a personal choice not a mandatory requirement for survival," says an expert with Northwestern Mutual, in a statement.
The biggest mistake you are making with your 401(k)
Many 401(k) participants are leaving free money on the table by not contributing enough to get their employer's matching contribution, writes a Forbes contributor. "Not maximizing your employer match could cost millions of dollars over the course of your working lifetime and typical retirement," writes the expert. "Over time, this can drastically reduce your income in retirement."