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

Solving the health care puzzle with a health savings account
Workers with a high-deductible health plan will be better off setting up a health savings account, which offers tax benefits for savings earmarked for future medical expenses, writes an expert on Forbes. "By using the 'HSA Combo Strategy', one can save money each month on health care premiums because the premiums on an HDHP are generally lower, receive an income tax deduction for the amount of the HSA contribution, as well as gain the ability to build up the value of the HSA account quickly through the power of tax deferral to help pay for any health emergency," writes the expert.

Source: Bloomberg


What rising rates mean for retirees
Morningstar's Christine Benz recommends investors to review the asset allocation in their portfolio and compare it with their retirement plan as rates are increasing. "If you decide that you are too heavy in stocks relative to where you want to be, you could potentially strip back your highly appreciated equity positions, maybe look particularly to the growth column of the style box, sell some of those appreciated winners, refill your cash bucket and perhaps give yourself a nice cushion for the next couple of years that you'll hold in cash investments," says the expert.

5 questions clients should ask themselves before buying an annuity
An annuity is a financial product that clients should consider to have a peace of mind in retirement that they won't run out of funds in retirement, as the product provides guaranteed income in the golden years, according to this article on Motley Fool. Withdrawals from annuities are taxed based on last-in, first-out basis, meaning the earnings portion will be subject to taxes and the income will no longer be taxed once the annuity value falls below the principal.

These IRA contributions can be rewarding — or risky
High-income IRA investors whose income exceed the threshold should consider making nondeductible contributions using after-tax money, according to this article on CNBC. Clients won't owe taxes when drawing these funds from the account, although the earnings from the contributions will be taxable. "If I make a nondeductible contribution, I don't have to pay taxes on it, but I must pay taxes on the earnings. Now I have to be specific and record-keep it so that I'm paying taxes on the right amount of money," says an expert.

One of the oldest rules for retirement saving is wrong, experts say. Here's the fix
Reducing equity allocation as one approaches retirement may already be an outdated concept that future retirees should no longer use, according to this article on Money. That's because people are expected to live longer, meaning they should continue being invested in stocks for the much needed returns for income. One option to remain invested in equities is to include target-date funds. An expert also recommends that the stock allocation should remain between 35% and 55% of the entire portfolio.

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