Our daily roundup of retirement news your clients may be thinking about.
Why investors still don't know their 401(k) costs
Since the Department of Labor's issuance of the fee disclosure regulations for retirement plans in 2012, many 401(k) participants still don't know how much they pay for the investments, writes Ted Jenkin, co-CEO and founder of oXYGen Financial. This is because the participants receive a lot of plan documents and they may overlook the fee disclosures and even if they find the disclosure pages, they may still find the fees confusing, Jenkin says. Despite the disclosure regulations, many 401(k) participants still don't know the plan's costs because "education isn't required." --The Wall Street Journal
Why millennials are saving at a younger age than any other generation
Most millennials started investing in mutual funds at an average age of 23, younger than the age boomers and Gen X began including the funds in their portfolios, according to a study by the Investment Company Institute. This conforms to an earlier research, which shows that millennials started building their nest eggs earlier than the other generations because of the recession. --Time Money
How to make a health savings account work for you
The open-enrollment season offers an opportunity for people with a high-deductible health plan to open a health savings account which they can use to minimize their tax burden and raise funds for their health care costs, according to this article on CNBC. People need to "take control of their accounts to get maximum benefits," says HealthEquity founder Dr. Stephen Neeleman. To maximize the benefits from HSAs, they are advised to determine the qualified expenses, study the withdrawal rules and max out contributions to the account. --CNBC
Social Security as an investment
While delaying Social Security benefits should be viewed as insurance against longevity risk, such a strategy can also be taken as an "investment" proposition, writes Wade Pfau, professor at The American College and principal at McLean Asset Management. The additional retirement credits that retirees earn for deferring Social Security benefits are “actuarially fair, Pfau says. "For someone living to their life expectancy, it should not matter what age they claimed their benefits. The increase in benefits from delay should precisely offset the fewer number of years that benefits will subsequently be received." --Forbes
Retirees get relief from Medicare sticker shock
The new budget act includes provisions that scrap certain Social Security claiming strategies, but also provides many Medicare beneficiaries a reprieve from a hefty increase in Part B premiums in 2016, according to this article on Fox Business. Under the 2016 budget deal, the increase in Part B premiums will be reduced to 16%, says Tricia Neuman of the Kaiser Family Foundation. Medicare will receive $7.4 billion from the U.S. Treasury to cover the program's shortfall and the funds will be paid by retirees through a month surcharge. --Fox Business
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