The surprises of retirement: Retirement Scan

The surprises of retirement
Changing a Medigap plan during the open enrollment could be costly for clients, especially when the switch happens outside the initial six-month window or there is a lack of guaranteed issue rights, according to this article on The Wall Street Journal, which solicited input from readers. People who switch to another Medigap plan could face a fee and restrictions on coverage because of pre-existing conditions. Insurers may also decide not to offer the plan to these clients. Those who consider changing their Medigap plan provider should seek help from their state health insurance assistance program or state insurance department.

Did your client switch jobs mid-year? They may inadvertently mess up their 401(k)
When getting a new job, clients should check their 401(k) assets with their former employer and decide on what to do with them, according to this article on MarketWatch. They may want to roll their old retirement funds over to their new 401(k) plan, and consider contributing to an IRA if their 401(k) contributions are exceeding the limits. “When you’re switching to a new job, there is so much you need to take into consideration… new work hours, new commute, new job responsibilities, new job role, pay frequency cycle. Then you completely forget I have this whole 401(k) sitting there I need to roll over,” says an expert.

Roth vs. traditional IRA: Which plan is better?
Retirement savers should take advantage of the benefits offered by an IRA, according to this article on Nasdaq. They have the option to contribute to a traditional IRA, which offers upfront tax deductions on contributions, or to a Roth IRA, which is funded with after-tax dollars. Clients who expect their income to decline in retirement should consider a traditional IRA, as they will be in a lower tax bracket. Those who think they will move to a higher bracket after they retire should generally opt for a Roth IRA.

How to actually get excited about saving for retirement
Millennial clients should change their view of retirement so they will be more motivated to save for the golden years, says an expert. Instead of looking at retirement saving as simply building wealth for the future, younger clients should see it as a way to buy themselves freedom and do the things that they want after they retire, says the expert.

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