Our daily roundup of retirement news your clients may be thinking about.

A flowchart gives confused clients clarity
A financial advisor devised a flowchart to explain the details of a 401(k) plan of a medical practice that decided to lower the cost of benefits as a result of an increase in its health-insurance premiums, according to this article on The Wall Street Journal. The flowchart enabled the physicians to know their options for funding and decided to pick the safe-harbor method. Consequently, the doctors have saved $55,000 through the safe-harbor plan and used the savings to pay their higher health-care premiums.  --The Wall Street Journal

Good news on retirement—if you’re willing to wait
Statistics show that people are now facing bleak financial prospects in retirement unlike those in "golden age," when workers could take an early retirement and live a relatively comfortable life, says Charley Ellis, an expert with Rebalance IRA. To ensure their finances in retirement, seniors may defer their Social Security benefits until age 70 to boost the value of their benefits and continue working past retirement age to cover their expenses. Near-retirees also need to continue their private retirement savings using home equity and avoid unnecessary high-cost investments, Ellis adds.  --MarketWatch

Personal Finance: Determining Your Social Security base
Social Security benefits can be determined by accounting for the highest 35 years, not the last five years, of adjusted income, according to this article on USA Today. "So the impact that retiring at 63 instead of 66 depends a lot on how long you've worked and how much you've made in those years," says Joe Elsasser, a certified financial planner with Omaha-based Sequent Planning. An additional year of work could significantly affect the base if the client has fewer than 35 years of employment or low average yearly pay, Elsasser adds.  --USA Today

How to fix Social Security
The government can address the issues with Social Security by pushing employers to offer pension to employees, writes Jim Blankenship, a fee-only financial planner with Blankenship Financial Planning. Boosting 401(k) and other retirement savings vehicles and eradicating the gap in earnings can also help fix Social Security. Other options for Congress to address the problems with the system are imposing a higher tax rate, implementing a means testing, and raising the retirement age.  --Morningstar

Do you spend more time researching your phone or 401(k)?
Workers consider their 401(k) plans to be of great value but many of them fail to take full advantage of the benefits these plans offer, according to a survey commissioned by Charles Schwab. In fact, they spend as much time researching which smart phone they'll buy as they do in deciding how to invest their 401(k) assets, the survey concluded. Employers are urged to diversify investment options within the plan instead of offering the default mode of investing, specifically target-based funds that are based solely on age, says Steve Anderson, president of Schwab Retirement Plan Services. "Managed account services take advantage of all the information we have: age, salary, account balance, state of residency (important because of tax consequences), Social Security projections, if you have another retirement plan."  --DailyFinance

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