Our daily roundup of retirement news your clients may be thinking about.
Clients should not lose sleep over health care expenses after they retire as they can sign up for Medicare Parts A, B and D to cover hospital visits, doctor services and outpatient care and prescription drugs. They may also get supplemental coverage for deductibles, co-pays and medications. However, Medicare premiums can be substantial and there will still be out-of-pocket health care expenses to be taken care of, such as long-term care and dental and vision insurance. Clients are advised to increase their budget for health care every year as the cost rise with age. –CNNMoney
One of the money lessons that retirees should learn is how to adjust their lifestyle to a given budget, an expert says. Retirees also should use their savings in taxable accounts before tapping their assets in tax-advantaged accounts to allow these assets to grow through compounding, another expert says. It is also important for retirees to consider moving to a place with lower or no income, and property and state sales taxes to help them free more money for their living and other expenses. –The Motley Fool
Tapping 401(k) savings to pay off the mortgage may not be a good decision even if the assets grow at 2.5% while the mortgage interest is 6%. A client aged more than 65 who is in this situation is advised to consult a financial adviser to assess his investments instead of getting a lump-sum distribution from the plan. He may not face a 10% penalty tax, but the distribution could push him to a higher tax bracket and result in bigger tax liability. –Yahoo Finance
Some resolutions that retirement investors may consider for the incoming year are to contribute to a Roth IRA, take advantage of their employer's 401(k) match contributions and determine whether they are on track to achieve their retirement targets. Clients also may consider increase contributions to their employer's retirement plans, boost their health savings account balance, and make more after-tax contributions to their retirement plans. Consolidating retirement accounts, diversifying investment portfolio, investing more in lower-cost funds and buying long-term care insurance are other resolutions worthy of consideration as clients welcome the New Year. –Forbes
Although a reverse mortgage offers tax-free income while guaranteeing a home for retirees, such an option can be very costly because of the hefty fees. Also, in case the retirees decide to sell their home, all mortgage payments they receive should be repaid. Retirees are advised to consider a reverse mortgage their last resort only when they need additional income to cover their living expenses. –MarketWatch
Register or login for access to this item and much more
All Bank Investment Consultant content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access