© 2019 SourceMedia. All rights reserved.

Social Security is millions of retirees' main income source. That's a problem.

Our daily roundup of retirement news your clients may be thinking about.

Social Security is millions of retirees' main income source. That's a problem.
Social Security could see benefit cuts and undergo significant changes in the future, and this poses a problem for seniors who will depend mainly on the program for retirement income, according to this article on personal finance website Motley Fool. To maximize their retirement benefits, seniors should strive to boost their income, as their benefit will be based on their 35 highest earning years. Another strategy is to delay their benefits as long as they can, as this will result in higher benefit paychecks.

Social Security-checks
Social Security checks are printed at the U.S. Treasury Philadelphia Finance Center in Philadelphia, Pennsylvania on February 11, 2005. Photographer: Dennis Brack/Bloomberg News

The New 50s: Far from retirement
Unlike the past generations, people in their 50s are not yet thinking about retirement and are even planning to continue working over the next 20 or 30 years, according to this article on The New York Times. That's because people expect to have longer lives now. Some of them brush up on skills to be hired in industries where there is a shortage of workers, while others do volunteer work or offer mentorship to younger workers. “The idea of working around so many younger people was exciting and invigorating... We’re just not competing with one another because we’re at different life stages,” says an older worker.

A wealth-building tool often more coveted than a 401(k) plan by employees
More employers are considering offering employee stock ownership plans, as workers are increasingly preferring these plans to workplace retirement plans, according to this article on CNBC. These plans allow employees to become owners of their company and business owners to sell their company to investors outside their organization. "Over the long-term, employees can develop significant equity balances and really participate in the growth of the business," says an expert.

High earners juggle retirement, college funding
A couple saving for retirement while preparing financially for their children's college education may stick to their employer-sponsored 401(k) plan as a main retirement vehicle, writes Morningstar's Christine Benz. That's because their 401(k) plan is considered first-rate, with very low investment and management cost, a 6% matching contribution and inexpensive fund options, writes the expert. However, their portfolio needed minor adjustments, such as an increase in equity investments and allocation to foreign stocks. The growth bias of their equity component should also be neutralized using market index funds.

For reprint and licensing requests for this article, click here.