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

How to avoid penalties on early 401(k) distributions

A 55-year-old client who decides to withdraw from his 401(k) account with his former employer may be exempt from paying the penalty if he is totally and permanently disabled and has an IRS levy, according to this article on MarketWatch. He may also make tax-free withdrawals from his 401(k) plan if there is a court-ordered distribution for a Qualified Domestic Relations Order and the withdrawal is part of a series of Substantially Equal Periodic Payments. He is allowed to transfer his money to an IRA, which offers many exceptions, including SEPP. –MarketWatch

Wallet-friendly travel tips for retirees

Many retirees plan their travels ahead to budget their expenses and avoid spending too much, according to this article on Morningstar. Since they have a lot of free time on their hands, they schedule their trips during off season to avail themselves of hefty discounts offered by hotels and airlines, as well as to avoid the crowds. When in their vacation place some retirees opt to buy wine and other

Medicare: What to do if you work past age 65

Workers who continue working past the age of 65 are advised to check the group health insurance coverage that their employer has so they will know whether they need to enroll for Medicare, according to this article on The Motley Fool. Applying for Social Security means automatic enrollment for Medicare, so employees who are 65 and up are advised to opt out of Part B coverage if they are covered by their employer's group health insurance. Senior workers will not be subject to a hefty late-enrolment penalty for Medicare but will need to sign up for the program through a special enrollment period after they retire to avoid the penalty. –The Motley Fool

How Social Security benefits work when a spouse is disabled

A client whose wife is collecting Social Security disability benefits is eligible to a spousal benefit if he has reached the age of 62, according to this article on USA Today. Even if he's under 62, he can still collect a spouse's benefit if he is looking after their child who is under 16 or disabled and getting benefits on his spouse's record, says an officer with the Social Security Administration. If he can claim retirement benefits on his own record, Social Security will grant him whichever is higher between his own benefit and spouse's benefit, the officer adds. –USA Today

Funding retirement without breaking the bank

Starting a retirement savings plan can be a good move for small business owners because of the tax advantages and tax credit for the administrative fees for putting up such a plan, according to this article on Forbes. Individual Retirement Arrangements, defined contribution plans such as 401(k) plans, and defined benefit plans are among the common retirement plans put up by small businesses for their employees. Since the rules for starting a retirement savings plan can be complicated, hiring a retirement plan administrator is recommended to make the process less stressful. –Forbes

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