Employees' Social Security checks might be smaller than expected

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Clients’ Social Security checks might be smaller than they expect
People should not rely entirely on Social Security for income after they retire, as their benefit will likely only replace about 40% of their pre-retirement income, according to this article from Fox Business. But remember, that 40% is an average, so many people will get even less. For instance, people retiring in 2018 only get credit for 90% of their primary insurance amount, or the benefit at full retirement age, up to $895 per month; they’ll get 32% of the amount between $895 to $5,397; and 15% of any amount over $5,397. All of which means that Social Security will replace more than 40% of income for people with lower earnings over their career and less than 40% for people with higher earnings over their career. Delaying the benefit will result in a higher monthly payout but many seniors are forced to retire early and end up receiving a reduced benefit.

Opinion: Why annuities are a bad idea for almost everyone
Annuities can be a terrible idea for people who want to secure their retirement, as they will lose the money to the insurance company in case they die before they can start receiving the payout, according to this opinion piece from MarketWatch. "Essentially, you’re betting the insurance company that you’re going to live longer than they think you will," writes the expert. "They take your money, invest it and give it back to you in dribs and drabs (with steep penalties if you want to withdraw more than the contract states)."

Buckets: Not just for retirees
The bucket portfolio is a useful investment model for seniors who already left the workforce for good, but it can be an option for other clients with short- and intermediate-term goals, writes Morningstar's Christine Benz. "They don't always have a single-minded focus on investing for retirement," writes the expert. "From that standpoint, the bucket concept can be helpful to them, too, in that it can show the way to an appropriate asset allocation for a particular goal given the proximity to spending."

Why stuffing retirement savings with bitcoin may be a bad idea
Retirement savers are advised to be cautious when considering bitcoin IRA in their portfolio, according to this article on CNBC. An expert is worried that people look at investing in cryptocurrencies "normal" as any investments in the market. "For most people who have an IRA, they're in no position to be investing this way. Adding that kind of risk doesn't coincide with most people's desire to get to retire soundly."

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Retirement income Social Security benefits Social Security Variable annuities Investment strategies Portfolio construction Morningstar