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Common income sources during retirement include Social Security, investment accounts and projected retirement portfolio gains, while expected monthly expenses include insurance, utilities and recreational expenses. Kiplinger The one investment you need most for a successful retirement Stocks and bonds are expected to yield lower gains in the following years, but investors can secure their retirement by investing in passive funds like low-cost index funds and exchange-traded funds, according to Time Money.
Our daily roundup of retirement news your clients may be thinking about.
Best target-date funds? Fidelity vs. Vanguard
Fidelity and Vanguard’s target-date funds had almost the same investment portfolios, but Vanguard shareholders get greater returns, according to MarketWatch. Fidelity charges more than Vanguard, and shareholders who had higher expenses often yield lower returns. Four funds from Vanguard have an average expense ratio of just 0.17%, with a five-year return of 10.4%, compared to 9.3% for more expensive Fidelity Freedom K funds. --MarketWatch
Do a retirement dress rehearsal now so you don't blow it later Clients should try to live only by their projected retirement income for at least two months to see if they can support themselves, according to Forbes. Common income sources during retirement include Social Security, investment accounts and projected retirement portfolio gains, while expected monthly expenses include insurance, utilities and recreational expenses. During the retirement rehearsal, clients will be able to identify any shortfalls and make the necessary adjustments either to their savings plan or future retirement lifestyle. --Forbes
Behind on retirement savings? Here are 3 ways to catch up
A study found that 27% of people aged 55 to 60 failed to save enough money to secure a standard of living in retirement, but appeared to believe they are on track when it came to retirement savings. Catching up on retirement savings requires increasing savings rate, adding more years of work and getting a part-time job after retiring. -- CNN Money
The costly danger of putting extra money in your IRA
Investors are advised not to make IRA contributions in excess of the annual contribution limit because the IRS imposes an annual 6% penalty until the extra money is withdrawn, according to Kiplinger. New IRS rules allow taxpayers to only one 60-day rollover every 12 months regardless of the number of IRAs owned, but for those who will do more than one rollover, any money that will not be considered an annual contribution will be regarded as an excess contribution. To avoid the 6% penalty, investors could withdraw the excess contribution and its earnings by the due date of the tax return, including extensions. --Kiplinger
The one investment you need most for a successful retirement
Stocks and bonds are expected to yield lower gains in the following years, but investors can secure their retirement by investing in passive funds like low-cost index funds and exchange-traded funds, according to Time Money. Investors can avoid wasting their gains paying fees in order to save for retirement by including broad-based index funds or ETFs in their portfolios. --Time Money
Read More:
- Long Treasuries Offer Income Plus Safety
- With Fewer Pensions, Deferred Income Annuities Gain Ground
- Slot: R.I.P., Stretch IRA? Here Are Alternatives
Copyright SourceMedia Apr 16, 2015