Our daily roundup of retirement news your clients may be thinking about.
Clients who want to enroll for Medicare need to know what part of the coverage (Part A or Part B) they need before signing up, according to this article on Time Money. The first step to take is set an appointment with the Social Security Administration, which administers the Medicare enrollment. They also have to determine whether they need a Medigap policy, which should be obtained within six months after getting the Part B coverage. A Medicare Advantage or Part D may also be considered if they want broader coverage. Time Money
As Social Security faces a deficit starting 2019, based on its trustees' report, lawmakers have a number of options to address the entitlement program's looming financial woes, according to this article on The Motley Fool. Some of the possible solutions are increasing Social Security taxes, scrapping or increasing the wage cap and raising the normal retirement age. Reducing benefits, adjusting the calculation of cost-of-living increases and increasing the number of working years in the benefits formula are also possible ways to fix the Social Security problem. The Motley Fool
Many clients are unable to make wise decisions involving their retirement prospects because they allow their emotions to take rein in the decision-making process, according to this article on MarketWatch. One psychological behavior that is a common obstacle to retirement planning is loss aversion, which refers to their reluctance to take the risk of losing money. Another hindrance to investing for retirement is narrow framing, which occurs when they sell investments in their portfolio that are dropping, and buying those that are going up -- a move that is an inverse of the rebalancing that experts recommend. -- MarketWatch
Pre-retiree clients are advised to determine the kind of lifestyle they want in retirement and project their expenses as they make a financial plan for their golden years, according to this article on CBS Moneywatch. They also need to know if their retirement savings are adequate to cover their living cost estimates, how taxes will affect their retirement income and where they intend to avail of health care services. Knowing the amount of debt they will carry through retirement is important since it will add to their overall cost. CBS Moneywatch
Clients who consider retiring earlier than usual need to account for the variables that will affect their financial health during the golden years, not just what they want in retirement, writes Bret Magpiong, managing director of family-office services at San Francisco-based Aspiriant. It's because they are likely to face plenty of obstacles that can make their retirement plans complicated, Magpiong writes. "Clients looking to retire early may want to use more conservative projections in their retirement planning or build more cushioning in their savings to account for those probabilities." The Wall Street Journal