Our daily roundup of retirement news your clients may be thinking about.
Finding health insurance before pre-Medicare years can be a costly challenge for early retirees and self-employed clients, writes an expert on Kiplinger. To save on costs, clients are advised to start looking for coverage in the marketplace, which will be open for 2019 enrollment from November 1 through December 15. “Whatever happens to premiums, people who are eligible for premium tax credits will be largely protected. When premiums go up, the tax credit goes up dollar for dollar,” says an expert with the Kaiser Family Foundation.
A young, childless couple should consider paying down their student loan debt using her savings, according to this Q-and-A article on Washington Post. Before doing that, they should set aside at least $5,000 in an emergency fund and put student loan repayment ahead of retirement savings, but need to make several considerations. For example, they should contribute enough to their workplace retirement plan to qualify for their employer's matching contribution.
Many clients may have underestimated their retirement expenses if they are not knowledgeable about the Medicare rules, according to this article on Motley Fool. That's because not all medical expenses will be covered by Medicare, meaning retirees will have to pay for out-of-pocket healthcare costs. Clients may also underestimate their retirement costs if they exclude long-term care in their retirement plan and intend to retire in their old home.
Delaying Social Security benefits until the age of 70 is not a great option for all retirees, as the decision should be based on their personal circumstances, according to this article on Kiplinger. The increase in benefits for every year of deferring the benefits is not always 8%, as the increase is based on the FRA benefit amount and not the amount that retirees could have received at specific age. It is also a mistake to consider the age of 80 to be the break-even point, or the time they will have claimed their lifetime payment amount whether file early or late.
Homeowners have the option of liquidating their home equity in retirement and relocating to smaller home or in another location with lower taxes and other carrying costs, according to this article on Morningstar. They may also apply for a reverse mortgage using their home equity after they retire for additional income. Using home equity as an estate-planning tool is another viable option, especially if they expect to owe a hefty capital gains tax after selling the property.
