Mary Beth Franklin

Retirement 2.0blog

Mary Beth Franklin on what your clients really want when they talk about retirement.

Jul 10, 2017, 9:38 AM EST

How Social Security treats the survivors of young workers


By Mary Beth Franklin

I just received a sad question from a financial adviser in Indiana who asked if there would be any Social Security benefits available for a young widow and child following the death of their 25-year old husband and father in a traffic accident. She noted that the young man had not worked long enough to accrue the 40 credits usually required to be eligible for Social Security benefits.I assured her there is an exception to the 40-credit rule when a very young worker dies or becomes disabled. The adviser's question really hit home, as I was on the way to a funeral of my 31-year-old nephew who had died over the July 4th weekend. Although most of us think of Social Security as a government program for older people who retire or become disabled or that pays survivor benefits to elderly widows and widowers, it also provides valuable benefits for very young workers. Because of their brief careers, the eligibility rules are more lenient.A... Read full post

Jul 6, 2017, 2:58 PM EST

Dual income couples complicate Social Security earnings test


By Mary Beth Franklin

With so many people planning to work beyond normal retirement age, dual-income couples create a challenge for financial advisers when it comes to recommending a Social Security claiming strategy.Anyone who claims Social Security benefits before full retirement age while continuing to work could lose some or all of their benefits — at least temporarily — if they earn too much. In 2017, "too much" is defined at $16,920 if someone is under full retirement age for the entire year. They would lose $1 in benefits for every $2 earned over that limit.In the year someone reaches full retirement, during the months before their 66th birthday, a more generous earnings test applies. They would lose $1 in benefits for every $3 earned over $44,880 in 2017. Once someone (who was born from 1943 through 1954) reaches 66, the earnings test disappears. Benefits lost due to excess earnings are automatically restored at full retirement age in... Read full post

Jun 29, 2017, 11:57 AM EST

An adviser's guide to Social Security survivor benefits


By Mary Beth Franklin

One of the primary tenets of financial planning is to anticipate a worst-case scenario and to implement a strategy to buffer the risk. For many families, the untimely death of a parent or spouse can spell financial disaster.While Social Security survivor benefits alone may not be sufficient to support surviving spouses and children during difficult times, they can play a crucial role in maintaining financial stability. Based on recent emails, many financial advisers are attempting to include Social Security survivor benefits in their "what if" scenarios, prompting questions about how to estimate the amount of those benefits.One adviser from Dallas posed questions about his clients, a married couple where the husband is 62 and the wife is 60. They both plan to delay claiming Social Security retirement benefits until they turn 70, but the adviser wondered what would happen if the husband, who has a slightly larger full retirement age... Read full post

Jun 14, 2017, 6:06 PM EST

Retiree health care costs rising faster than Social Security benefits


By Mary Beth Franklin

Health care costs in retirement are rising twice as fast as the average annual increase in Social Security benefits, putting a crucial source of retirement income on a collision course with one of the biggest expenses retirees face. Over time, retiree health care costs for today's workers could exceed their gross Social Security payments.The third annual "Retirement Health Care Data Report" projects that lifetime health care premiums for Medicare Parts B and D, supplemental Medigap insurance and dental insurance for an average 65-year-old couple retiring this year is $321,994 in today's dollars. When deductibles, copays, hearing, vision and dental out-of-pocket costs are added, total lifetime retirement health care costs could top $400,000, according to HealthView Services, which produces health care cost-projection software for financial advisers and financial institutions.While the numbers are eye popping, HealthView Services chief... Read full post

Jun 5, 2017, 3:17 PM EST

Social Security cost-of-living adjustment predicted for 2018


By Mary Beth Franklin

Social Security beneficiaries have lost nearly a third of their buying power since 2000 as the costs of items typically purchased by the elderly have significantly outstripped the annual inflation increases in their retirement benefits, according to a new report by The Senior Citizens League (TSCL) obtained by InvestmentNews.But creeping inflation over the past 12 months may have a silver lining. Based on Consumer Price Index (CPI) data through April of this year, the consumer advocacy group estimates that the Social Security cost-of-living adjustment for 2018 will be about 2.1% — significantly higher than the paltry 0.3% increase this year.Social Security inflation adjustment have averaged only 1% since 2012, including no increase in 2016. COLAs are based on increases in the CPI-W, which measures price inflation for urban workers, from the third quarter of the prior year to the corresponding quarter of the current year. The... Read full post

May 24, 2017, 6:24 PM EST

Rectifying Social Security's flawed advice


By Mary Beth Franklin

Forgive me if you are tired of reading about the bad advice being dispensed by Social Security representatives. But this story has a happy ending and offers some helpful, step-by-step guidance of how to help clients caught in a bureaucratic maze.Several months ago, Jana Davis, a financial adviser in Los Angeles, wrote to me asking for help with one of her clients, a divorced woman trying to claim spousal benefits on her ex-husband's earnings record. "I have a client who fits all of the divorced spouse criteria for receiving a spousal benefit from her ex-husband," Ms. Davis wrote. "She was married more than 10 years, has been divorced more than two years and never remarried," she wrote. "We know that half of her ex's benefit will be more than her full retirement age benefit," she added. "She is age 68 and her ex-husband has just reached his full retirement age of 66."Ms. Davis instructed her client to apply for her Social Security... Read full post

May 15, 2017, 1:52 PM EST

Social Security Administration steps up online security


By Mary Beth Franklin

Here we go again. The Social Security Administration announced that, beginning June 10, users of the agency's online services will need a one-time code to log into My Social Security accounts, which provide access to personal benefit estimates and lifelong earnings records.The agency's previous attempt to institute enhanced online security last year was short lived.On July 30, 2016, the Social Security Administration (SSA) began requiring new and current Social Security account holders to sign into their account using a one-time code text message as an extra measure of online security. Two weeks later, the agency reversed itself in response to public outcry from senior advocacy groups and some members of Congress who noted that many seniors do not have cell phones or live in rural areas without reliable cell phone service."Online security is vital, but we feel alternate options should be offered," said Mary Johnson, a policy consultant ... Read full post

May 9, 2017, 6:02 PM EST

Social Security blocks clients' claiming strategies


By Mary Beth Franklin

I am detecting a pattern. Time after time, a financial adviser recommends how a client should claim their Social Security benefits in a way that will maximize their lifetime income, only to be thwarted by a well-meaning Social Security representative who talks the client out of their intended strategy by offering a bigger immediate benefit.During my recent appearance at the InvestmentNews Retirement Income Summit in Chicago, I talked to numerous advisers who shared their frustration over this situation."We recommended that my client, who was 67 at the time, take her spousal benefit in February 2016," said Kelly Cartier, a financial adviser with Cartier Financial in Clearwater, Fla. "But when she went to Social Security office in March 2016, they suggested she take her full retirement age benefit instead and get a lump sum payment going back to full retirement age rather than taking the spousal benefit and letting her benefit grow to... Read full post

May 1, 2017, 2:46 PM EST

How Social Security treats remarriage


By Mary Beth Franklin

Young love is often blind and impulsive. Mature love, on the other hand, is pragmatic and wears bifocals. At least that is my interpretation based on recent questions from InvestmentNews readers asking what happens to Social Security benefits for divorced spouses and widows if they remarry. To claim benefits as a divorced spouse, one must have been married at least 10 years, divorced and currently single. An eligible divorced spouse loses the right to collect benefits on an ex if they remarry. But widows and widowers retain the right to claim survivor benefits if they wait until 60 or later to remarry. So, a divorced spouse who remarries loses the right to collect benefits on a living ex, but can still collect survivor benefits on a deceased ex if the divorced spouse waits until 60 to take that second trip down the aisle. (More: 5 financial mistakes divorcing men make)This was not always the case. Social Security rules on remarriage... Read full post

Apr 26, 2017, 2:33 PM EST

Social Security: Later is better


By Mary Beth Franklin

Americans are finally getting the message: Waiting to claim Social Security until full retirement age or later results in bigger monthly benefits for life and can also boost survivor benefits for a remaining spouse.Today's pre-retirees (ages 55 to 61) are far less inclined to begin taking Social Security benefits as soon as possible, according to the latest Fidelity Investments "Social Security IQ Survey." This year, only 28% of those aged 61 said they are planning to claim benefits at 62, a marked contrast from the last time the survey was conducted nine years ago. In 2008, 45% of those surveyed said they planned to start collecting benefits immediately.While the decrease in 61-year-olds planning to claim Social Security early is the most dramatic shift from the 2008 survey, many pre-retirees say they intend to wait longer before collecting. In 2008, 27% of 55- to 61-year-olds indicated they would collect Social Security as soon as... Read full post

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