ETFs for an America Without Medicare

NEW YORK (TheStreet Ratings) -- The politicians in Washington D.C. voting against the raising of the U.S. debt ceiling are holding America's credit rating hostage.

After the House of Representatives approved a budget of more tax cuts for wealthy Americans, billions of dollars in subsidies for wildly profitable oil companies such as ExxonMobil(XOM) and ConocoPhillips(COP), and the end of Medicare for anyone under the age of 55, the opposition party is currently holding out for an equal amount in cuts to government programs in exchange for each dollar increase in the debt limit.

The recent bond market rally in long-term U.S. Treasuries, on sub-par economic news, signals that the fixed-income market does not believe that the U.S. will be forced to default on its debt obligations. However, even a short-term default on the debt would cost the U.S. hundreds of billions of dollars every year in higher interest payments on future borrowings. This unthinkable scenario, on top of the contrived shortage of government revenue, would further squeeze out our government's ability to buy things we need such as job-creating investments to restore American's crumbling infrastructure.

With several open seats in play due to retirements and more Senatorial Democrats than Republicans up for election in 2012, U.S. Senate control may switch parties leaving President Obama in a weaker position to protect Medicare and other entitlement programs. The Republicans laid their cards on the table by adopting Rep. Paul Ryan's budget plan as their own. They declared their intention to end direct Medicare payments to doctors transferring thousands of dollars in private insurance medical costs to tomorrow's senior citizens.

What this means is that there has never been a more important time to save for retirement. No matter how much, or how little, you make, do whatever you can to live within your means. Now is the time to squirrel away as much money as possible into retirement accounts to pay for future medical costs and other living expenses.

There are a dozen 'Buy'-rated asset allocation exchange-traded funds offered by iShares. Each of these funds hold stakes in other funds to build a portfolio specifically diversified and allocated to meet the risk profile of prospective investors in various life stages. The funds break down into two groups, those that maintain the same targeted level of risk and those that slowly shift their percentage of assets from equity to fixed income holdings as the targeted date of retirement approaches.