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Are millennials fooling themselves with their savings strategy?

More than half of millennials have started to cut back on their spending to save for retirement, according to Bankrate report.
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Welcome to Retirement Scan, our daily roundup of retirement news your clients may be talking about

Are millennials fooling themselves with their retirement savings strategy?
While millennials may be saving more than Gen Xers and baby boomers, younger clients are not better prepared for retirement compared with their older counterparts, research findings show, writes a MarketWatch contributor. This means that millennials may not be able to retire early as planned, he writes. "But for the select few who have both the means and discipline to actually save so much as to realistically retire early, the rest of us need to expect that we’ll be retiring at a later age, not earlier."

5 Social Security tips for 2020 and beyond
Clients who want to boost their retirement prospects are advised to find ways to maximize their Social Security benefits, according to this article in Motley Fool. To do this, they should continue working as long as possible, review their earnings record every year and seize every chance to raise their income. They should also consider delaying retirement, decide the right age to retire and account for the tax impact on their Social Security benefits when creating a retirement plan.

When using a 401(k) to pay off debt makes sense for clients
401(k) participants have the option of making a hardship withdrawal to pay off high-interest debt, buy a home or cover an emergency cost, but this would trigger income taxes plus a 10% penalty, according to this article in Fox Business. Another option is to apply for a 401(k) loan, which charges a relatively low-interest rate, but clients would miss out on the opportunity to grow their savings. Clients are advised to tap other sources before tapping into their 401(k)s.

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3 ways the downturn could help clients build tax-free retirement savings
The market correction and lower tax rates under the 2017 law present an opportunity for investors to save after-tax dollars for retirement, according to this article in CNBC. To do this, high-income clients can reduce their taxable income by contributing to traditional 401(k)s and consider using the backdoor strategy to transfer retirement assets into their Roth. Workers may also want to contribute to a Roth 401(k) if their plan offers this feature.

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