Our daily roundup of retirement news your clients may be thinking about.
Medicare rates set to soar
Lawmakers have yet to agree on how to curb the 52% increase in Medicare Part B premium, which will affect about 30% of the 52 million seniors enrolled in Part B next year, according to this article in The Wall Street Journal. Pressure on Congress is increasing, according to this article in The Wall Street Journal, because many state budgets also would be hard hit. The premium increase would impact about 9 million lower-income Medicare beneficiaries whose premiums are paid by state Medicaid programs, many of which are already stretched thin. The White House said it is aware of the concerns. "We share the goal of keeping Medicare’s premiums affordable, are exploring all options, and appreciate the interest and ideas of members of Congress,” says Katie Hill, a spokeswoman of the White House. --The Wall Street Journal
6 ways clients can avoid outliving their cash
Clients need to develop a retirement plan, abide by the modified 4% rule and stay employed for an extra year or more to make sure they won't outlive their nest egg, according to this article on Kiplinger. They are also advised to buy long-term care coverage to protect their savings from being used up for long-term-care expenses, which have been on the rise in recent years. Buying an annuity and using home equity as an income source are also ways for retirees to ensure their nest egg will outlast them. --Kiplinger
'Hold harmless' rule and COLA determine the answer
Medicare Part B premium is expected to increase next year for 30% of beneficiaries who belong in high-income group, have not applied for Social Security or are from low-income households whose premiums were paid by Medicaid. Also affected by the premium increase are new beneficiaries, state and local employees not covered by Social Security and retirees whose Part B premium were not deducted from their Social Security payments. “These situations all come into play due to the ‘hold-harmless rule,’ which basically states if Social Security does not provide a cost-of-living adjustment (COLA) for 2016, Medicare cannot increase Part B premiums more than the COLA amount,” an expert says. --USA Today
Here's why pension giant CalPERS wants to cut investment goals
The California Public Employees' Retirement System has announced it lowered its investment return projection to 6.5% from 7.5% every year amidst an environment of low inflation and dwindling interest rates. "We're in the midst of what I would call a secular shift in the return assumptions. That has occurred particularly in the wake of sustained reductions of interest rates," says Keith Brainard of the National Association of State Retirement Administrators. --CNBC
Your ticket to a fatter retirement
Retirees who consider buying annuities to have a guaranteed income for life can compare prices of these products online at Abaris, a new online quoting business put up by two Wharton graduates and a fellow University of Pennsylvania alumnus, according to this article on Forbes. The new startup aims to provide transparency to its clients, says Abaris CEO Matt Carey. “You should be able to compare every product that’s out there in payout rates and credit ratings.” --Forbes
- Advisors: Will Your Clients End Up on Medicaid?
- New Products Address Shortcomings of Long-Term Care Insurance
- Long-Term Care: 4 Ways to Better Help Clients
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