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Medicare prescription drug coverage: Clients may need a new plan

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

Medicare prescription drug coverage: Clients may need a new plan
Seniors are advised to have the right Medicare prescription drug coverage to save on out-of-pocket health care costs in retirement, according to this article on CBS Moneywatch. Those new to Medicare may not realize they need to buy a separate policy that covers prescription drugs. To be sure, there are some partial exceptions, but even in those cases, not all Medicare Advantage Plans cover prescription drugs. And when they do, they often have different features regarding their coverage. So if clients regularly take one or more prescription drugs for chronic conditions, they can find it helpful to shop carefully for prescription drug coverage. And they can make changes during Medicare's upcoming open-enrollment period from Oct. 15 to Dec. 7, with the changes becoming effective at the beginning of 2019. Unlike Medicare supplement plans, they can change the Part-D plan each year without needing to satisfy medical underwriting. "Retirees who regularly take prescription drugs can potentially save hundreds or even thousands of dollars with careful shopping for a Medicare Part D prescription drug policy," says an expert.

Pharmacy-Bloomberg
Medications line the shelves as pharmacist technician Nasir Ahmad checks in prescriptions at a drug store in Evanston, Illinois. While many of the prescriptions filled today are less-expensive generic drugs, there are still many for which generics do not yet exist. Photographer: Tannen Maury. Bloomberg News.

How to shop for an immediate annuity
Clients looking for a guaranteed income stream in retirement should consider buying an immediate annuity, writes an expert for Kiplinger. An immediate annuity is considered the purest form of guaranteed income, just like buying one's own pension, says an expert. However, clients have to weight their options and ensure they need an immediate annuity by looking into their cash flow before making a decision. “We break it down into essential and discretionary needs. We list the essential income needs, such as property tax, mortgage, food, clothing and other bills.”

The big payoff from working a few extra years
More Americans opt to continue working past their retirement age, improving their prospects in the golden years, writes an expert for Bloomberg Businessweek. "By continuing to work through their 60s and beyond, they can bulk up their retirement funds and Social Security benefits and compress the time they’ll have to live on savings."

Why clients should protect investments by designating a trusted contact
Seniors should consider having a trusted contact that their financial firms can contact in case their cognitive health declines to protect their investments, writes a Forbes contributor. "For example, if the firm is concerned that the account owner is no longer able to handle their financial affairs, if the account owner cannot be reached, or if there is a reason to suspect fraud or financial exploitation, the firm is authorized to reach out to the trusted contact for guidance."

Don’t let magical thinking jinx retirement planning
Clients should ensure they are saving for retirement and avoid fantasizing that their needs will be taken of once they are in the golden years, according to this article on personal finance website NerdWallet. “It’s great to have a big vision and faith there’s going to be prosperity in the future,” says a certified financial planner. “But be realistic in the here and now, so once that prosperity comes, you’re not backfilling a big hole.”

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