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How early retirees can get cheap health insurance: Retirement Scan

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Our daily roundup of retirement news your clients may be thinking about.

How early retirees can get cheap health insurance
Retirees who retire before age 65 and want to reduce their health insurance premium are advised to keep their taxable income between $12,060 and $48,240 (for singles) or $16,240 and $64,960 (married couples), according to this article on Kiplinger. That's because having taxable income within the limits will enable them to get the premium tax credit. They may also qualify for cost-sharing reductions if their taxable income falls within $12,060 and $30,015 (singles) or $16,240 and $40,600 (married couples).
How to lower your taxes in retirement
Clients are advised to keep their investments in traditional retirement accounts and Roth accounts to minimize the impact of taxes on their income after they retire, according to this article on Motley Fool. By keeping their taxable income low in retirement, clients will avoid taxes on a portion of their Social Security benefits. Also, holding their investments in these retirement accounts will allow them to avoid capital-gains and dividend taxes.

What if retirement comes too soon?
The Society of Actuaries issued a brief that calls on clients who retire sooner than expected to look for other sources of income before tap into their retirement accounts right away, according to this article on CBS Money. These possible sources of income are their severance pay, early retirement incentives, unemployment insurance, worker's compensation and short-term disability insurance, states the SOA brief. To prepare for the possibility of an earlier retirement, clients are advised to set up emergency funds, reduce or pay off debt, update their job skills and expand their social network.

The single-best retirement fund booster
Retirement investors who want to enhance their portfolio returns should shift to less costly investment options to reduce their expenses, writes a Forbes contributor. They may compare the funds' expense ratios to identify cheaper investment options, and usually these are passively managed exchange-traded funds, writes the expert. "By shopping around and dumping expensive funds, it's one move you can make this year that will make a significant difference at retirement."

A new conflict-of-interest rule for retirement savers is causing a lot of confusion
Retirement investors should make sure that their brokerage firms' decision to move their assets from a commission-based account into a fee-based, "advisory" account to comply with the Labor Department's new rule is for their best interest, says Barbara Roper of the Consumer Federation of America in an article on the Washington Post. If clients are not satisfied with their adviser's explanation, they should consider shopping around, says Roper. "There are lots of options out there, and you may find you get better advice at a lower cost if you are willing to shop around."

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