Our daily roundup of retirement news your clients may be thinking about.
Automating 401(k) contributions is an easy way for workers to increase their retirement savings this New Year, according to this article from Money. They should at least contribute enough to get their employer's match in case they cannot afford to max out the contributions, as well as accept the auto-escalation feature if their plan offers such an option. Those who have no access to a 401(k) or similar plan have the option of setting up an IRA and automatically transferring a certain amount into the account from their checking or savings account on a monthly basis.
Retirement savers are advised to avoid making any major investing decisions and changes to their portfolios in case their year-end statements reflect hefty losses from recent market volatility, according to an article from The New York Times. "If you are a long-term investor (and any money you have tied up in the stock market should be intended for the long term to begin with), tumult like that of the last few months isn’t something that should cause panic," according to the article. “Rather, it’s the price you pay for enjoying returns that, over long time horizons, are likely to be substantially higher than those for cash or bonds."
Clients who are 10 years away from retirement should start planning for their golden years and focus on the specific details of their plan, according to this article from Kiplinger. They should make a good estimate of their expenses and check whether they will have enough income to cover these costs. They should also accelerate their savings, set up a health savings account, pay down debt and consider getting long-term-care insurance coverage. Adjusting the asset allocation in the retirement portfolio should also be in order, getting the right mix of stocks and bonds to curb inflation and other risks while ensuring substantial returns.
Seniors may expect an uptick in Medicare premiums this year, according to this article on personal finance website Motley Fool. For example, while Medicare Part-A is free for participants who have made payroll taxes for 40 quarters of qualifying work, those who only have 30 to 39 quarters of qualifying employment can see their monthly premium to increase this year by $8 to $240 from last year's figure. Other participants with less than 30 quarters can also expect their Medicare Part-A premium to rise to $437 this year.
