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  • It’s Not Too Late! Special Medicare Part B Enrollment Deadline Approaching

    September 21st, 2018

    cash_register_medical-cost_color

    Did you become eligible for Medicare Part A on or after March 1, 2013?  Did you keep your Affordable Care Act (ACA) health coverage instead of enrolling in Medicare Part B and then discover there were penalties for keeping that coverage?

    You have until September 30, 2018 under a special program which lets Medicare Part A beneficiaries sign up for Medicare Part B without late enrollment penalties.

    Who is eligible?

    Medicare beneficiaries who were covered by a qualified health insurance plan and who are not enrolled in Medicare Part B are eligible. Perhaps you turned down Medicare Part B coverage or dropped it because you thought ACA qualified health coverage was more affordable.  If so, what you did not realize is that you would lose the benefits of ACA coverage because of your Medicare eligibility.  And, you will face Part B higher coverage costs for life.

    What does the special relief provide

    It provides a special enrollment period that allows individuals to enroll in Medicare Part B without facing lifelong enrollment penalties. This ends September 30, 2018

    If individuals have Part B coverage now but are paying late enrollment penalties, special relief would end the penalties.

    Apply for special equitable relief to enroll in Medicare Part B and/or to eliminate your Part B enrollment penalties.

    Call the Social Security Administration (SSA) at 800-772-1213 or go to www.ssa.gov to find a local Social Security office that you can visit in person

    Once at the office or on the phone with a representative, request special “equitable relief” to enroll in Part B and/or eliminate your Part B penalties.

    Do this BEFORE SEPTEMBER 30, 2018!

     

    Visit the Center for Medicare and Medicaid Services to learn more about enrolling in this special program.

    Understanding and Solving the Problem of Women’s 401(k) Cashout Leakage

    August 1st, 2018

    A cracked egg with money flying out the window.

    Guest author: Tom Hawkins, vice president of sales and marketing with Retirement Clearinghouse

    At a recent Women’s Institute for a Secure Retirement (WISER) roundtable addressing strategies, choices and decisions for women’s retirement income, important new data was presented that highlights the challenges faced by women in preserving their 401(k) savings when changing jobs – particularly for women with balances less than $5,000.

    Compiled by Retirement Clearinghouse (RCH) and presented to the WISER roundtable by RCH EVP Tom Johnson, the data indicates that women with small 401(k) balances cash out much more frequently than their male counterparts.  However, as women’s 401(k) balances grow, they become more likely than men to preserve their retirement savings.

    These behaviors, along with the results of the Auto Portability Simulation, suggest that a program of retirement savings portability could incubate women’s small 401(k) balances, allowing them to more effectively grow their savings to higher balance levels, where more virtuous behaviors prevail.

    An infographic summarizing the statistics is available for download at this link.

     

    Women’s Cashout Leakage By-the-Numbers

    Using a multi-disciplinary approach that incorporated industry research on cashout leakage, women’s representation in defined contribution plans, participant turnover rates, the Auto Portability Simulation, the EBRI/ICI 401(k) database and the EBRI Retirement Security Projection Model®, the results provide a model of women participants’ post-separation job-changing and cashout behaviors.

    • Based on Vanguard research, women collectively represent about 40% of all defined contribution plan participants.
    • Each year, an estimated 5.9 million women participants will change jobs.
    • Of these 5.9 million women job-changers, approximately 2.4 million, or 41% will cash out $28 billion in retirement savings, paying taxes and penalties.
    • 2.1 million, or 36% will have balances less than $5,000. Of these, 1.5 million – a whopping 71% — will cash out $2.6 billion in savings.
    • Over a generation, 104 million women will cash out almost $800 billion in retirement savings, in today’s dollars.

    Drawing upon a 2015 survey by Boston Research Technologies, the RCH data also revealed that, at sub-$5,000 levels, women of all ages tended to cash out at much higher-levels than their male counterparts, as indicated in the graph below.

     Womens Cashouts Small Balances Chart

    Chart 1 – Women’s Odds of Cashing Out Small Balances
    Source: Actionable Insights for America’s Mobile Work Force, Boston Research Technologies (2015)

     

    The Promise of Portability

    A more promising data point was revealed in a 2011 study by Aon Hewitt, indicating that women – at higher balance levels – were more likely than their male counterparts to preserve their retirement savings from job-to-job.  This finding seems to mirror other research (ex. – The $10,000 Hurdle, Northern Trust, 2017) suggesting that efforts to move participants’ balances to higher thresholds can act as an effective deterrent to cash outs.

    In preserving and incubating women’s small 401(k) balances, auto portability delivers.

    Incorporating the results of the Auto Portability Simulation, the RCH figures show that, on an annual basis, auto portability would preserve the savings of 1 million women participants.  Over a generation, 42 million women would preserve their retirement savings, worth about $365 billion in today’s dollars.

    While the systemic results of auto portability are impressive, its effect at an individual level is equally impactful.

    The RCH analysis depicts the individual impact of preserving 1-3 $5,000 balances over the course of a career.  As the figure shows below, preserving just one $5,000 balance at age 25 can result in $70,000 in retirement savings, whereas three $5,000 balances preserved over the course of a career could result in an additional $123,600 in retirement savings.

    Preserving Small Balances

    Figure 1 – Value of Preserving $5,000
    Source: Retirement Clearinghouse

    Taken together, the new data presented at the WISER roundtable demonstrate that by reducing cashouts, consolidating balances and achieving higher balance levels, women could benefit disproportionately from the widespread adoption of auto portability.

     

    Tom Hawkins is vice president of sales and marketing with Retirement Clearinghouse, and oversees all key operational aspects of this area, including RCH’s web presence, digital marketing and plan sponsor proposals. In other roles for RCH, Hawkins has performed product development, helped lead the company’s re-branding, evaluated and organized industry data and makes significant contributions to RCH thought leadership positions.

    Stay Engaged With Financial Wellness At Every Age

    May 29th, 2018

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    Every May, WISER is pleased to partner with organizations across the country for Older American’s Month, led by the Administration on Aging, part of the Administration for Community Living. The 2018 theme, Engage at Every Age, emphasizes that you are never too old (or young) to take part in activities that can enrich your physical, mental, and emotional well-being. It also celebrates the many ways in which older adults make a difference in our communities.

    Here at WISER, we believe wholeheartedly in the message of Older Americans’ Month—that no matter your age, you have unique benefits to offer to society, your loved ones and yourself. Even if you are no longer working, there are ways to stay engaged with the world around you. Doing so keeps you connected to others and keeps you alert—which is a good thing for your finances. The more isolated you are, the more susceptible you can become to financial scammers, who are likely to prey on older Americans.

    A great way to stay engaged with others is by sharing the financial lessons you’ve learned throughout your life. WISER’s website is filled with resources that make doing so easy. For example, WISER has dozens of fact sheets that cover the basics on many topics. They can be a helpful guide for talking to others about money. For example, here’s a list of 5 things mothers should tell daughters about money and retirement. Other resources are aimed at younger people, like “The Beginner’s Guide to Saving and Investing.” It can provide a framework for an initial conversation talking to the teenagers and young adults in your life about the importance of long-term planning. If you know a young person planning for college, talk them through“Student Loans 101” to make sure they know exactly what to expect if they plan to take out loans.

    For those who aren’t quite ready for more advanced money topics, WISER created a storybook called Sonja Meets Her Future Self.  The book is available for free download or can be ordered directly from WISER.  In the story, a young girl named Sonja travels forward in time and meets future versions of herself. Along the way she learns about the importance of saving and what it means to be retired. This booklet provides a multi-generational look at retirement planning and the valuable lesson of save, spend and give.

    In addition to teaching others about financial lessons, another great way to stay engaged is through volunteer work. Doing so can keep you busy during retirement and is often an activity that is free of cost. Websites like volunteermatch are a great starting point. Your local library is another great resource to find community groups that will keep you engaged.

    WISER believes that financial security is tied to better physical, mental and emotional well-being. Stay engaged during Older Americans Month (and year-round) with our resources.

    WISER

    About Us

    WISER is a nonprofit organization that works to help women, educators and policymakers understand the important issues surrounding women's retirement income. WISER creates a variety of consumer publications including fact sheets, booklets and a quarterly newsletter that explain in easy-to-understand language the complex issues surrounding Social Security, divorce, pay equity, pensions, savings and investments, banking, home-ownership, long-term care and disability insurance.

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