7 key retirement trends for 2017 and beyond

  • Social insecurity

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    The countdown to 2034 is ticking away. Unless Congress enacts reforms, the Social Security trust fund is expected to be depleted by that year, at which time, it would be able to pay just 79 percent of its promised benefits.

    Millions of Americas rely on Social Security as a guaranteed form of income to last throughout their retirement years. According to the Transamerica Center for Retirement Studies' 2016 survey of workers, 77 percent of employees are concerned that Social Security won't be there for them when they're ready to retire. Almost half cited reductions or the disappearance of Social Security benefits among their greatest retirement fears.

    Addressing Social Security's funding deficit is one of the most far-reaching challenges facing policymakers today. It inherently involves the possibility of controversial and complicated trade-offs such as raising taxes, reducing benefits and increasing the retirement age. This is particularly daunting, given the lack of meaningful employment opportunities for older workers.

    Even more challenging is how to solve the problem fairly and equitably across generations and levels of need, and in a way that mitigates the risk of poverty among the elderly.

    Social Security reform is sure to be a hot topic in the years ahead as lawmakers try to solve these tough problems. On the campaign trail, Donald Trump promised not to touch Social Security benefits. But in December 2016, the GOP proposed changes that would eliminate the system's funding deficit entirely by cutting benefits and raising the retirement age.

    For an example of a more reasonable package, earlier in 2016 the Bipartisan Policy Center proposed a package that combined benefit reductions and tax increases.

    "It is critical that policymakers address this issue sooner than later," said Collinson of TCRS. "Procrastinating and kicking the can down the road will only make the problem more painful to solve and with less time for workers to adjust their retirement plans and expectations accordingly."

    Older workers will want to follow the debate carefully, provide their input to lawmakers and adjust their plans if their benefits are cut or the retirement age is increased.

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    Steve Vernon helped large employers design and manage their retirement programs for more than 35 years as a consulting actuary. Now he's a research scholar for the Stanford Center on Longevity, where he helps collect, direct and disseminate research that will improve the financial security of seniors. He's also president of Rest-of-Life Communications, delivers retirement planning workshops and authored Money for Life: Turn Your IRA and 401(k) Into a Lifetime Retirement Paycheck and Recession-Proof Your Retirement Years.