Medicare Part D drug coverage gap closing at faster clip: Retirement Scan
Our daily roundup of retirement news your clients may be thinking about.
Medicare Part D drug coverage gap closing at faster clip
The gap for brand-name prescription drugs for Medicare beneficiaries is likely to narrow down to 25% of drug costs from the scheduled 30% next year, thanks to the Bipartisan Budget Act of 2018, according to this article on Kiplinger. Hence, retirees are advised to compare their Part D options during the open enrollment late this year. This will enable them to take advantage of the gap and save on prescription drug costs.
Retirement savers should lower their expectations, says veteran wealth adviser
A financial adviser urges investors to manage risk in their portfolio well, stick to their investment plan, and stay calm during a market correction, according to this article on MarketWatch. They should also avoid having unrealistic expectations, the expert says. “The key is to be able to weather through a decline. Historically if you’ve been able to stay in place, the markets return for you. And the people that panic out are the people that lose the money.”
Deferring compensation now could build retirement wealth
High-income employees should consider a company-sponsored non-qualified deferred compensation plan if their employer offers one, according to this article on CNBC. This option can be a supplement to their 401(k) plans and help improve their prospects in retirement. Savings in the plan grow tax-deferred, and this can be beneficial especially to those who work in states that impose an income tax.
4 bucket strategy misconceptions
Although Social Security and pension form an integral part of every senior's retirement plan, clients are advised to exclude these nonportfolio sources from their bucket strategy, writes Morningstar's Christine Benz. These retirement income sources should be accounted part in the early part of retirement planning, says the expert. "To do otherwise is to risk getting bogged down in abstractions that ultimately aren't that useful."
Retirees' reliance on Social Security ties a 16-year high, new survey shows
Studies show that more retirees are becoming overly dependent on Social Security for income, according to this article on Motley Fool. This trend can be alarming, as the program is expected to exhaust its reserve by 2034. This could mean that future retirees could see a 23% across-the-board reduction in benefits.