Our daily roundup of retirement news your clients may be thinking about.
Seniors who elected a Medicare Advantage plan during the open enrollment period last year or decided to keep their 2018 plan this year have the option of making changes to their coverage during the limited open enrollment, according to this article on CBS Moneywatch. The period started on Jan. 1 and will end March 31. Clients may want a new plan if there have been unfavorable changes to their old plan or they want a more flexible plan because of a new illness. The limited open enrollment will also enable clients to switch to a Medicare Advantage plan that offers broader coverage.
Seniors who want to improve their retirement prospects should consider extending their career for another six months before leaving the labor force for good, according to this article on personal finance website Motley Fool. A paper by the National Bureau of Economic Research shows that clients who opt to add three to six months to their working years can expect the same effect as increasing their savings by a percentage point of earnings over a 30-year span. Working past the retirement age enables clients to have more time to build their nest eggs, purchase annuities at a lower cost and boost their Social Security benefits.
Thousands of federal workers who are furloughed or working without pay because of the partial government shutdown should use budgeting to cope with the hard times, according to this article on CNBC. They also have the option of borrowing, such as tapping their home equity or retirement savings accounts, but they are advised to account for the drawbacks before making a decision. "If you're financially at risk, decide the right fit for you to get through this temporary setback."
Clients have some considerations to make before they contribute the maximum amount to their 401(k) plans, according to this article from U.S. News & World Report. For example, they may be better off contributing enough to get the employer's match or paying down high interest debt instead of maxing out 401(k) contributions. They should also consider other financial goals as well as tax savings, especially when they face a higher tax rate.
