Medicare B costs for clients projected to rise

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Medicare B costs for clients projected to rise
The standard monthly premium for Medicare Part B is projected to hit $144.30, an increase of $8.80 in 2020, based on initial figures from Medicare's trustees, according to this article in The Wall Street Journal. Most clients saw their Medicare Part B premiums rise to $135.50 from $134 in 2018. The projected increase of the premium, which covers doctor visits and other outpatient care services, implies “the fact that health care prices are increasing at levels that significantly exceed overall inflation, which has been the case for many years,” says an analyst.

Seniors spent $22 billion to cover cost of healthcare
Clients’ healthcare-related withdrawals from long-term savings accounts amounted to approximately $22 billion in the past 12 months, or an average of $3,789 per person, according to this article at the Washington Post, citing a study. “Americans in large numbers are borrowing money, skipping treatments and cutting back on household expenses because of high costs, and a large percentage fear a major health event could bankrupt them,” says the report.

Client retirement strategies from economists
This article on Money shares some strategies that experts personally use in building their nest egg. An expert with the Economic Policy Institute says that she adopts a "hands-off" investing approach to take advantage of the benefits of compound interest. Meanwhile, an economics professor contributes the maximum amount to tax-deferred retirement accounts. “I’m always stunned at how many people are not [contributing to tax-deferred retirement accounts] because they want to spend more now and don’t want save it. The return is so much better on tax deferred savings, and particularly when you get an employer match,” the professor says.

Why clients should convert their traditional IRA to a Roth
The lower income tax rates under the Tax Cuts and Jobs Act make a good case for converting a portion of traditional IRA assets into a Roth to boost aftertax income and avoid a hefty tax bill in the golden years, according to this article on U.S. News & World Report. The tax cuts will enable clients to save on taxes triggered by the conversion. "It's the best time in history to convert to a Roth. Between now and 2025, the last year of tax reform, taxes are on sale," says an expert.

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