Improved Social Security COLA would help seniors stay ahead of inflation: Opinion

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Improved Social Security COLA would help seniors stay ahead of inflation: Opinion
Social Security needs to improve cost-of-living adjustments to ensure that retirees can cope with the effect of inflation on their finances, writes an expert on MarketWatch. To do this, the program should compute COLA using the Consumer Price Index for the Elderly, which accurately reflects retirees' spending patterns. “Seniors have been seeing rises in food…housing, and medical costs, without always receiving adequate increases in the COLA. We must do better and work toward a comprehensive solution,” says Congressman John Larson, D-Conn., proponent of The Social Security 2100 Act.

This common 401(k) oversight could cost you big time in retirement
While many workers are auto-enrolled in their employer-sponsored 401(k) plan, they need to raise their contribution rates to enhance their retirement prospects, according to this article on Money. That's because the 3% default contribution rate set by their employer is way below the 15% recommended by experts. “If your company has a match, contribute at least the minimum amount to get a full match in your 401(k). If you do that automatically before you ever receive your first paycheck, it’s almost as if you’re tricking yourself," says a financial planner.

When planning for retirement, don’t forget inflation
Clients should account for the impact of inflation when planning for retirement, as it poses a risk to their future financial health, writes an expert on The Wall Street Journal. To mitigate this risk, clients are advised to maintain a diversified portfolio designed to generate returns that could offset price increases, the expert explains. "Try to delay claiming Social Security; your monthly checks will be larger, and those payouts are adjusted annually for inflation... [A] prudent rate of withdrawal from savings — preferably no more than 4% a year, adjusted annually for inflation — will help, as well."

The next recession will show the stark reality of the retirement crisis
Despite the recent favorable economic trends, retirement crisis remains on the horizon, as these gains only have a temporary effect on seniors, writes a Forbes contributor. "More jobs and higher retirement balances are certainly welcome, but retirees can unexpectedly face a sharp downturn in their economic security in the next recession," writes the expert. "In fact, it is likely that the outlook for retirement security will become worse much faster in the next recession than in previous ones."

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Retirement income Social Security Social Security benefits Inflation 401(k) Portfolio diversity