© 2020 Arizent. All rights reserved.

Here’s how to manage debt burdening clients in retirement

Register now

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

Here’s how to manage the debt burdening clients in retirement
Many seniors are economically insecure and carry a hefty debt burden into retirement, however there are ways to improve their situation, a financial literacy expert writes in Kiplinger. For example, they are advised to take advantage of programs, such as Medicare savings program, discounts on prescription drugs and rental assistance from the U.S. Department of Housing and Urban Development, according to the article. Seniors can also minimize their spending, turn down payday lenders and avoid taking on more debt.
'Rage against' retirement
Clients are advised to "rage against" the traditional notion of retirement and consider this phase to be more than just relaxing and taking it easy, a Forbes contributor writes. That's because seniors who look beyond traditional retirement tend to be more fulfilled than those who are trapped in that mindset. "I encourage you to think about retirement as starting, growing, experiencing, doing, and becoming. Take risks! Be adventurous! Say yes to experiences and challenges," he writes. “Retirement should not be the time to do less.”

401(k) mistakes that derail clients’ retirement
Clients who don't take advantage of their employers’ 401(k) match are missing out on the opportunity to boost their retirement prospects, according to this Motley Fool article. They also hurt their chances for a comfortable retirement if they cash out their 401(k) assets when changing jobs and they don't raise their contributions over time. Holding underperforming investments in the plan is another mistake that can also decrease the odds for a financially secure retirement.

“There’s less performance chasing than you saw in the past, and that’s a positive thing,” an expert says.
December 4

Why it’s a mistake to raid retirement savings early
Fifty-two percent of Americans polled by Magnify Money have dipped into their retirement accounts prematurely, with 23% saying they tapped their savings to pay off debt, according to this CNBC article. Raiding retirement savings early can be a bad move, as it could trigger taxes, penalties and other fees. Clients would also miss out on compounded growth of their savings and lose the creditor protections that their retirement accounts provide.

For reprint and licensing requests for this article, click here.