Social Security

People born in 1960 could see a permanent cut in their benefits without action by policymakers, an expert warns.

Recipients of Social Security benefits, as well as railroad retirement and veterans benefits recipients, will need to act fast.

For one, clients will owe taxes still on the distributions, unless they recontribute the money into the account within three years.

“Traditionally, 401(k)s generally have some really good investment options that you wouldn’t be able to do on your own,” an expert says.

Retirees will end up locking in substantial losses if they decide to cash out their investments during a bear market to generate income.

By extending their working years, seniors can see an increase in their Social Security payouts.

If they plan to use them for current spending, “then the timing of the distribution would not matter for tax purposes,” an expert writes.

Clients are advised to minimize spending and tap possible sources of cash and credit, including their tax refund.

“Having retirement assets in both traditional and Roth accounts can help clients hedge their tax bets for retirement,” an expert says.

Retirees tapping their long-term savings accounts for income in an emergency are advised to strongly consider reducing their withdrawal rates.

While younger clients may be putting away more money than Gen Xers and baby boomers, they’re not better prepared for retirement compared with their older counterparts, experts say.

“Find ways to generate income,” says one financial planner.

While some retirees have seen a substantial increase in spending, many others are enjoying financial freedom.

To ensure their investments stretch as long as they live, clients are advised to develop a sustainable withdrawal plan and consider annuities.

Mutual funds and ETFs are often created with lopsided or unequal allocations toward certain sectors of the economy, experts warn.

To start, these clients are advised to start saving as early and contribute enough to their 401(k)s to qualify for their employer's matching contribution.

More than a quarter of women in a recent survey say they are confident they will comfortably retire, while almost a third of men voiced the same confidence.

Filing at the wrong age and failing to take advantage of programs like spousal and survivor benefits are just a few common mistakes seniors make.

Aside from income taxes, retirees will also pay consumer taxes and may face a 3.8% Medicare surtax.

The Social Security retirement rate is based on their highest 35 years of wage-indexed earnings.