Welcome to Retirement Scan, our daily roundup of retirement news your clients may be talking about.
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Often under-used, HSAs can be a powerful tool for clients.
October 9 -
When looking for concierge healthcare and health insurance advice, financial advisors often find that support from specialized health consultants.
September 17
Clients should not lose sleep over the cost of health care in retirement, as medical expenses tend to be more volatile before than after they retire, according to an expert in this Forbes article. While retirees who have no health insurance do stand to lose the most from unforeseen medical expenses, they should not be as concerned as many think, according to the expert. “Before retirement, the variation in medical insurance premiums plays a huge role in the cost of medical care,” he says. Clients should consider saving in a tax-advantaged health savings account to prepare for out-of-pocket medical expenses in retirement.
Contrary to the thrust of a recent study suggesting infrequent saving is an effective retirement strategy, clients should in fact steadily build their savings over the course of their working career, writes Alicia H. Munnell, director of Boston College Center for Retirement Research in an article from MarketWatch. “Just because middle-income households don’t cite retirement saving as a major motivation for saving does not mean that they are correct. It is not enough for people to start saving when they feel the need to,” she writes. “At current 401(k) contribution rates, intermittent saving simply will not produce adequate resources.”
Retirees on Social Security can still return to the labor force, but the decision could affect their retirement benefits, according to this article from Nasdaq. For example, seniors who started collecting the benefits before their full retirement age may lose $1 for every $2 in income that is in excess of a certain threshold. Those who reach their FRA this year will lose $1 for every $3 in excess earnings incurred during the months before their birthday.
Clients should not discount the idea of investing outside tax-advantaged retirement accounts, as they can still achieve tax efficiency in taxable accounts, according to this article in U.S. News & World Report. To minimize the tax bite on returns, clients should favor “long-term capital gains over short-term, qualified dividends on common stock and to a lesser extent preferred stock over bond coupons and bank interest, and municipal bonds over Treasurys or corporate bonds of comparable credit quality,” says a financial analyst with Bankrate.
