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December 02, 2016

Penelope WangAs anyone saving for retirement knows, rising health care costs are one of your biggest financial challenges. Now that challenge is getting tougher—GOP leaders are planning a major overhaul to Obamacare, Medicare and Medicaid that may boost your medical bills. Will it really happen? There’s no predicting outcomes in Washington, so focus on what you can control: saving, investing and, especially, maintaining your health. The good news is that healthy habits do make a big difference, as Linda Fried, dean of Columbia University’s Mailman School of Public Health, noted at a recent conference. If you reach age 70 without major health issues, you’re likely to live longer and better in retirement. Fried also noted that a recent study found a dramatic decline in the rate of dementia. One possible reason is that the study subjects had more education, which may have given them greater cognitive reserves to stave off Alzheimer’s. To protect your health, Fried recommends staying mentally active by tackling new problems, working or volunteering, and exercising. Above all, stay optimistic—if you expect to live longer, you improve the odds that you will. Tip: Avoid obsessing over cable news.

Best wishes,

Penny

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THIS WEEK’S RETIREMENT NEWS, INSIGHTS AND ADVICE

The Ages When Most People Retire (Hint: Probably Too Young)

You might think that today’s financial pressures are pushing people to stay in the workforce longer to build up their portfolios. You would be wrong. Two-thirds of Americans stop working full time before age 66. For many, that’s probably a mistake, as contributor Dan Kadlec explains. MONEY

Here’s How Bond Investors Can Survive Interest Rate Hikes

The Federal Reserve is likely to raise its key interest rate when it meets later this month. Meanwhile, other interest rates have already begun to climb. Rate hikes can hurt the value of your bond holdings. Reporter Darla Mercado outlines a safety plan for your portfolio. CNBC

How to Boost Your Social Security Check by 85%

Few retirement decisions are more fraught, or more complicated, than choosing when to claim Social Security. Most people don’t fully understand the rules. Not only does your payout rise for each year you wait, but your earnings may also boost your benefit—perhaps by a lot, as reporter Ben Steverman points out. BLOOMBERG

3 Ways That 401(k) Plans Fail Millennials

No one expected the 401(k) to become our national retirement plan. It just happened. Which is why it continues to have some major design flaws—among them, requiring workers to wait to participate. Here’s how much these hurdles can cost you, especially if you’re young. MONEY

How to Build a Multi-Million-Dollar Retirement Fund

A seven-figure portfolio? Okay it’s not easy, but it’s doable—if you start early, save a lot and don’t encounter too many bear markets. Earning a six-figure income helps if you’re going for multiple millions, but you can get to a million even if you’re an average earner. Check out the numbers. FORBES

Essential Retirement Planning Numbers for 2017

Wow, 2017 is around the corner already. For retirement savers, it’s time to update your planning and review your tax numbers, as well as retirement account contribution limits for the year ahead. Morningstar’s Christine Benz did the work, so you don’t have to. MORNINGSTAR

Retirees’ Tax Puzzle: Pay Now or Pay Later

Speaking of numbers, retirees are often surprised by their tax bills, especially when they begin drawing down their pre-tax savings. Reporter Kimberly Blanton talks tax strategy with financial adviser Michael Kitces. Preview: It’s hard to know your future tax rate, but take your best guess and make a plan for it. SQUARED AWAY

How Soon Will Washington Tackle Medicare Reform?

Medicare and Medicaid, programs that are essential to older Americans, might see big changes next year, when President-elect Donald Trump takes office. Up till now, he has said little about these entitlements, but GOP leadership is poised to overhaul them. At the very least, as Elizabeth O’Brien reports, his cabinet appointments signal a move toward cost-cutting measures and possibly benefit cutbacks. MONEY

Five Myths About Landing a Good Job Later in Life

Forget the aging stereotypes. It’s totally possible for older workers to find good jobs. Truth is, there are lots of opportunities for experienced workers, as reporter Anne Tergesen notes. Read the whole thing to learn the real story about working longer. We could all use some good news, right? WALL STREET JOURNAL

YOUR RETIREMENT QUESTIONS ANSWERED

Can I Add More Money to My 401(k) Whenever I Want?

Q: If I have a 401(k) account from a previous job but I haven’t found a new job yet, can I still add money to my account?

A: If you find yourself between jobs or if your employer doesn’t offer a 401(k) retirement account, you might be wondering, “Can I add more money to my 401(k)?” Unfortunately, 401(k) plans are sponsored by employers and must be done through payroll, which means you can’t add extra cash to your account unless it’s funneled from your paycheck. READ MORE

WORDS OF WISDOM

“The only way not to think about money is to have a great deal of it.”

--Writer Edith Wharton

ABOUT PENNY: Penelope Wang is editor at large at MONEY with a focus on retirement planning. A graduate of Swarthmore College and Columbia University School of International Affairs, she was recently ranked among the "top social influencers in personal finance and wealth." You can email her at retirewithmoney@moneymail.com and follow her on Twitter @PennyWriter.

 
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