Future retirees are likely to lose from the GOP tax cut proposals, according to this article on MarketWatch by Alicia H. Munnell, director of Boston College's Center for Retirement Research. Most analysts see an increase in deficit and debt once the tax cuts are implemented, she writes. "The deteriorating fiscal picture will put enormous pressure on precisely the programs that they need when they retire—namely, Social Security and Medicare."
Retirees have no reason to rejoice over Social Security's 2% cost-of-living adjustment in 2018, as it will only write off the past increases in Medicare Part B premium, according to this article on U.S. News & World Report. Non-protected Medicare recipients saw their Part B premium increase to $134. “The lower the benefit, the lower the Medicare Part B premium people were paying in 2017 and the more they need to reach $134,” says an expert. “The upshot is Part B will take their entire COLA.”
Clients engaged in retirement planning should not rely on the "magic number" as it is based on assumptions that are far too different from their financial circumstances, according to this article on Kiplinger. Aside from Social Security and pension, clients should consider creating a source of guaranteed income such as annuities.
