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

Trump’s budget could let those on Medicare use this tax-favored account
President Donald Trump is proposing a budget that includes a provision that would give Medicare recipients the option to contribute to a health savings account, according to this article on CNBC. An HSA offers tax deductibility on contributions, tax-free growth on savings, and tax-exempt withdrawals for qualified medical expenses. Clients with single insurance coverage can stash away as much as $3,450 into the account, with those carrying family coverage allowed to contribute up to $6,900.

Bloomberg News

What's changing in retirement accounts in 2018 (and how to take advantage)
Clients who want to boost their retirement prospects are advised to make the most of their employer-sponsored retirement plans, which have higher contribution limits this year, according to this article on Kiplinger. Aside from the upfront tax deductions, these accounts may also offer tax-deferred growth on savings and employer's matching contributions if clients contribute enough to qualify. Those who have no access to a workplace plan may want to contribute to a solo 401(k) and a SEP IRA. A health savings account and a flexible savings account are other vehicles that clients can also use to save for retirement.

The worst funds for your 401k
Clients are advised to avoid holding municipal bond funds in a 401(k) plan, according to this article on personal finance website Motley Fool. While investments grow tax-deferred in a 401(k) plan, distributions will be subject to income taxes. Yields from municipal bonds are tax-exempt, but will be taxable if the bonds are held in a 401(k) plan and are withdrawn in retirement.

5 investing mistakes that can destroy your retirement
Panic selling, borrowing from a 401(k) plan, and not investing enough are among the mistakes that clients should avoid when investing for retirement, according to this article on Forbes. Listening to hot tips and paying excessive fees in retirement accounts are other missteps that could also ruin their retirement prospects.

Using a 401(k) loan for a home down payment
401(k) participants have the option of taking a loan from their plan to buy their first home, according to this article on personal finance website Bankrate. While this option offers advantages, participants should repay the loan within 90 days or the withdrawal will be treated as a taxable distribution. Those who are below 59 1/2 at the time of borrowing will owe an extra penalty of 10% plus taxes. They will also miss out on the compounded growth on the withdrawn amount.

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