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Labor Department clears path for automatic 401(k) transfers

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Labor Department clears path for automatic 401(k) transfers
The Labor Department has issued a guidance allowing employers to make an automatic transfer of small 401(k) accounts owned by their former workers to their new retirement plan, according to this article on The Wall Street Journal. Analysts say that the guidance will help minimize 401(k) cash-outs of employees who switch jobs. “You’re talking about potentially billions of dollars staying in the retirement system that would otherwise be lost,” says an expert with Morningstar.

1 in 4 workers run into this career derailment, but clients can protect themselves
Data from the Social Security Administration show that 25% of workers will suffer disability before they hit retirement age, according to this article on CNBC. Clients are advised to consider disability insurance to close the pay funding gap. "As people go through their open enrollment, oftentimes their patience runs out after choosing their 401(k) solution, their health-care solution or their [health savings account]. Don't forget about disability insurance," says an expert.

5 proven ways to boost your retirement income
Looking for ways to pump up income in retirement? Pre-retirees should make the most of catch-up contributions in their retirement plans, defer Social Security as long as possible and invest more in dividend-paying stocks, says this article on personal finance website Motley Fool. Bonds are also a great investment option, particularly municipal bonds, which are exempt from federal taxes. Downsizing or moving to a more tax-friendly location can also help lower their housing costs and free more money for other expenses.

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