Our daily roundup of retirement news your clients may be thinking about.
An expert says that Social Security benefits will increase 2.8% next year but some retirees will not see a rise in their retirement paycheck because of the Medicare hold-harmless provision, according to this Q&A article on Morningstar. "In the past, Medicare premiums have been rising faster than Social Security, so they haven't been able to apply that entire increase to some retirees," says the expert. "Now that Social Security benefits are going up a little more, those retirees are going to see a bigger jump in their Medicare benefits which will eat into more of that Social Security increase they are getting."
New research shows that couples will be better off retiring months or years apart rather than leaving the labor force at the same time, according to this article on The Wall Street Journal. Retiring apart can provide them numerous advantages, such as bigger Social Security payouts, lower health-insurance costs and longer life for their savings. “There’s no question that if one of you can work a little longer, it can make a huge difference in your financial security,” says one of the researchers.
IRA expert Ed Slott says that investors should account for the tax impact of doing a Roth conversion, according to this Q&A article on Morningstar. While investments in a Roth IRA will grow tax-free, the converted amount will be subject to federal taxes, so the current tax rates should be considered as well, says the expert. "One of the core principles of good tax planning is always try to pay taxes at the lowest rates."
