Why retiring at 65 could become a thing of the past

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

Why retiring at 65 could become a thing of the past
As much as 54% of Americans will either stop working after age 65 or never retire at all, according to a study in this CNBC article. Just 24% of the respondents in the Transamerica Center for Retirement Studies report say they plan to retire at 65, with 22% saying they are eyeing an earlier retirement. “People want to extend their working lives and plan to keep working in retirement. By and large, many simply have not yet saved enough to retire comfortably,” says Catherine Collinson, the center’s CEO and president.

4 retirement planning rules for clients to live by
There are a few rules that clients are advised to follow to improve their financial prospects in retirement, according to this Motley Fool article. When creating a retirement plan, they should determine the amount of income that their retirement savings will generate and avoid relying solely on Social Security, according to the article. They are also advised to plan on how to cover their tax bill on retirement income and have a bucket list of activities to keep them active through their retirement.

11 Social Security mistakes that can cost your clients a fortune
There are several common mistakes clients are advised to avoid to ensure they protect their Social Security benefits, according to this Yahoo Finance article. These mistakes include failing to check their earnings record, not working long enough, filing too early and claiming past the age of 70. Clients are advised to consider their spouse’s earnings record and coordinate their claiming strategy with that of their spouse. It is also important to plan proactively to avoid or minimize taxation on their retirement benefits.

3 major penalty taxes that could diminish your retirement savings
Clients who are contributing to tax-favored retirement accounts are advised to follow the contribution and withdrawal rules to avoid hefty penalties, according to this article in Forbes. For example, IRA investors will face a 6% penalty tax for their excess contributions, while retirees will owe 10% tax penalty for early withdrawals. Retirees aged 70 1/2 and older who failed to take the RMDs will pay a penalty tax equivalent to 50% of the RMD amount.