Our daily roundup of retirement news your clients may be thinking about.
Clients that are still in the workforce are advised to avoid borrowing from their 401(k) plans to fund their vacations this summer, according to this article on Forbes. "Even though a 401(k) loan can seem like a quick cash fix, it carries long-term consequences, and therefore should only be used as a last resort to address a true and critical need," says Catherine Golladay, vice president of participant services at Charles Schwab. -- Forbes
Although personal savings rose 5.5% in 2014, the percentage of savings in 401(k) plans dropped 22% last year from the prior year, according to research firm Hearts and Wallets. A study by Financial Engines found that many 401(k) participants opt to forgo employer match contributions, leaving $24 billion on the table annually. That means they fail to get an average of $1,336 of free money every year, or $43,000 over a 20-year period. Time Money
Many places outside the U.S. are good locations for Americans to retire because of their affordability, according says Kathleen Peddicord, publisher of Live and Invest Overseas. Peddicord identifies cities in different parts of the world that make a nice place for retirement based on the cost of living, weather and other factors. These cities include Algarve, Portugal, Puerto Vallarta, Mexico, and Cayo, Belize. The Washington Post
Clients need to have a plan to draw retirement income from their multiple savings accounts, according to this article on MarketWatch. Their retirement withdrawal strategy should include an investment plan that suits their goals and circumstances. Clients also need to study carefully their options in claiming their Social Security benefits to maximize their value and curb their tax burden. -- MarketWatch
Retirees need to determine the health services covered by their Medicare and the amount they are paying to the program, according to this article in U.S. News & World Report. They also need to know the deadline for enrolling for Medicare, the premiums for the programs Parts A, B and D, and other out-of-pocket expenses. It will also help if retirees determine the free services that Medicare beneficiaries are entitled to, the program's prescription drug coverage and ways to supplement Medicare. DailyFinance