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Social Security isn’t America’s only public retirement crisis

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Social Security isn’t America’s only public retirement crisis
In addition to problems with Social Security and Medicare, Medicaid is also at risk of running out of funds. Indeed, Medicaid spending was on the chopping block in the Trump administration’s most recent budget, and is a frequent target for some conservative policymakers when they are seeking to cut spending. Cuts in Medicaid could prove disastrous for low-income retirees who rely on the program for nursing home care, writes an expert on Barron’s. The tax code also undergoes changes, making it difficult for retirement savers to determine the best long-term strategy when saving in 401(k)s and IRAs, adds the expert. “In traditional versions of these accounts, contributions are tax-deductible, but withdrawals are taxed as ordinary income, so uncertainty about future income tax rates creates a formidable risk.”

Afraid of running out of money in retirement? This score can help assess the risk
Clients may want to use the Retirement Income Security Evaluation tool provided by the nonprofit group Alliance for Lifetime income to assess their retirement risk, according to this article on CNBC. The online tool generates a score based on factors such as expected Social Security income, pension payouts, the total amount of savings as well as monthly and medical expenses. “Based on what you put in, this is your score and means you’re going to run out of money if you live past a certain age,” says an expert with the Alliance for Lifetime Income.

You can't afford to believe these 401(k) myths
Contrary to what most people think, a 401(k) is not always the best place to save for retirement, especially if the plan offers no employer’s match and charges hefty fees, according to this article on personal finance website Motley Fool. Retirees also will be required to start drawing their 401(k) savings as taxable income when they reach 70 1/2. Borrowing against a 401(k) plan can be costly and it is not enough to save in a 401(k) to secure the golden years.

What is the "bucket" approach strategy to retirement income planning?
The bucket approach is the most interesting of the retirement income strategies that clients can use because it allows them to address the reason why they plan in the first place, writes a Forbes contributor. The strategy earmarks investments into three or more time horizons in the golden years, and by segmenting the retirement horizon, clients can prioritize the times they will have to use the funds, the expert says. “As such, it is more important that you have spending and funds available for the near term and more certain expenditures. Essentially, bucketing is a form of risk management.”

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