What to do about Medicare if your clients are 65 and working
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Here’s what to do about Medicare if your clients are 65 and working
Clients who are at least 65 years old, and working for companies with more than 20 employees have the option of sticking to group health plan and delaying their enrollment with Medicare, according to this CNBC article. They may also opt to drop their group plan and sign up for Medicare. “The advice I give is to calculate the financial impact for each option,” says an independent broker. “Figure out your cost based on your usage and your medication, and do a comparison on what your outlay may be.”
How to help clients check their Social Security
Workers should ensure that their employer reports their salary accurately and deducts the appropriate Social Security taxes, as their retirement benefits will be shortchanged if their pay is underreported, according to this Q&A in the Los Angeles Times. When helping clients analyse their paychecks, advisors can show them where the information regarding Social Security, OASDI and FICA withholdings are located, according to the article. "If the line says Social Security or FICA, the amount listed should be 6.2% of the money you earned for the pay period, up to a maximum annual amount of $8,239.80 for 2019."
What to do if your client’s company terminates their 401(k)
Workers have the option of moving their 401(k) assets with the future employer's retirement plan if their current company is going to shut down, according to this article in Motley Fool. They may also consider rolling their 401(k) funds into an IRA, where they can have a broader menu of investment options. Withdrawing these retirement assets is an option, but this can be a poor decision, as it will trigger income taxes plus a hefty penalty if they are below the age of 59 1/2.
Are Roth IRAs as good as promised?
Working clients are advised to consider using a Roth IRA to save for future education costs, an expert in Forbes writes. That's because the account is funded with after-tax dollars, which means that clients can withdraw the money any time without owing taxes and penalties, he explains. "Since [they] are limited in how much [they] can add to a Roth each year, funding the Roth early can make a large difference later in life."