Mary Beth Franklin

Retirement 2.0blog

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

Nov 6, 2017, 4:11 PM EST

Someone tried to hack my Social Security account

cybersecurity

By Mary Beth Franklin

Several InvestmentNews readers have asked me to weigh in on whether the recent Equifax data breach, which affected an estimated 143 million Americans, could compromise online Social Security accounts.Equifax, one of the three major credit bureaus, announced in September that it had experienced a major data breach last summer involving Social Security numbers, birth dates, addresses and in some cases driver's licenses and credit card numbers, for about half of all American adults.The pilfered information is the perfect recipe for committing identity fraud. In theory, hackers could use this sensitive personal information to set up an online Social Security account in your name, file for those benefits when you became eligible and direct the payments to a new address and bank account without your knowledge.The bigger question is, can they use that same information to gain access to the millions of existing My Social Security accounts and... Read full post

Oct 23, 2017, 12:28 PM EST

How to take the Medi-scare out of retiree healthcare costs

Halloween-money

By Mary Beth Franklin

I don't think it's a coincidence that Halloween and Medicare open enrollment season occur at about the same time each year. Although some people like to celebrate Halloween by dressing up as ghosts and zombies, for seniors, no costumes are needed to trigger goosebumps. Health care costs — especially paying for prescription drugs — is one of the scariest parts of retirement.A majority of Americans cite healthcare costs as the leading obstacle to financial security in retirement, according to new data from Northwestern Mutual's 2017 Planning & Progress Study. The number of Americans citing healthcare costs as their chief concern spiked dramatically this year from 45% in 2016 to 58% is 2017, according to Northwestern Mutual's annual survey of more than 2,700 American adults.Separately, four out of five seniors say they would have trouble paying for their drugs without the Medicare prescription drug plan known as Medicare... Read full post

Oct 9, 2017, 9:17 AM EST

Medicare rules are needlessly complex

Stethoscope and Charts

By Mary Beth Franklin

People who collect Social Security benefits early are automatically enrolled in Medicare when they turn 65. But as increasing numbers of Americans delay claiming Social Security benefits until older ages when they are worth more, many of them are missing crucial Medicare enrollment deadlines and facing lifelong penalties.It doesn't have to be that way. Better notification and a simplified enrollment process could alleviate these problems.Generally, Americans must enroll in Medicare during the seven-month initial enrollment period that begins three months before their 65th birthday, includes their birthday month and continues three months after their birthday.They can enroll in both Medicare Part A, which is free and covers hospital costs, and Medicare Part B, which carries a monthly premium and covers doctors' visits and outpatient services. They may also want to sign up for a Medicare Part D prescription drug plan and a supplemental... Read full post

Sep 26, 2017, 3:04 PM EST

Seniors scramble to beat reverse mortgage deadline

Home main

By Mary Beth Franklin

I received a frantic phone call from a reverse mortgage lender in California last week. He said he was worried about the large number of senior homeowners who were scrambling to qualify for a reverse mortgage before new, more restrictive lender limits take effect on October 2, 2017.The problem is, prospective reverse mortgage borrowers must complete a mandatory counseling session, usually by phone, before they can apply for a loan that allows homeowners age 62 or older to tap some of the equity in their home. But, apparently, there are not enough counselors approved by the Department of Housing and Urban Development (HUD) to satisfy the recent spike in demand."Our phones are ringing off the hook right now with people scrambling to find a counseling company to get their FHA (Federal Housing Administration) certificate," said Roy McGovern, founder and chief loan officer of Roy's Umbrella in Fair Oaks, CA. "It is extremely frustrating... Read full post

Sep 21, 2017, 2:07 PM EST

Demand for Social Security advice growing

Social-Security

By Mary Beth Franklin

Less than 20% of older Americans work with a financial adviser who provides guidance on when to claim Social Security benefits. Despite the low incidence of this type of holistic financial advice, it marks an improvement from recent years, according to a new survey of Americans age 50 or older by the Nationwide Retirement Institute.Among future retirees who are currently working with an adviser, 58% said their adviser provided guidance on Social Security benefits compared to 38% of recent retirees and about a third of clients who had been retired 10 years or more. But in about half of the cases, it was the client—not the adviser—who initiated the discussion about how and when to claim Social Security benefits.Despite the apparent reluctance among some financial advisers to offer Social Security guidance, it seems to be an increasing priority for clients. Nearly 80% of future retirees who work with a financial adviser said ... Read full post

Sep 15, 2017, 6:01 PM EST

Social Security COLA could get wiped out by Medicare costs

Social-Main

By Mary Beth Franklin

Consider this perverse scenario. Next year, typical retirees could see their expected Social Security cost-of-living adjustment for 2018 virtually wiped out by a big jump in Medicare premiums, but premiums for many higher-income clients could remain the same as 2017.Blame this potentially bizarre situation on the "hold harmless" provision that is designed to protect most retirees from a net decline in Social Security benefits from one year to the next. Although it is still more than a month away from the official 2018 COLA announcement, the latest Consumer Price Index (CPI) for August suggests that Social Security benefits could increase by about 1.8% next year, according to Mary Johnson, senior policy analyst at The Senior Citizens League, an advocacy group for older Americans. 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... Read full post

Sep 12, 2017, 1:37 PM EST

Retirement-income theories confront reality

Summer-retirement main

By Mary Beth Franklin

I spent part of my post-Labor Day week at the beach catching up on my professional reading. I knocked off eight issues of the Journal of Financial Planning and scored eight hours of continuing education credits by taking the online quizzes available for each issue.There is something very satisfying about being able to devote long stretches of time to reviewing the latest research, analysis and opinions — particularly when accompanied by a cool beverage on a hot day. Bonus points for the sound of breaking waves in the background. What struck me the most is how financial planning continues to be more art than science, particularly when it comes to retirement-income distributions.More than two decades ago, William Bengen developed the 4% rule, which evolved into the holy grail of safe initial withdrawal rates for retirees — until persistent low interest rates called even that conservative rule of thumb into question. Mr.... Read full post

Sep 6, 2017, 1:01 PM EST

How to appeal higher Medicare premiums

elderly_man

By Mary Beth Franklin

It's time to prepare higher-income clients for a nasty surprise that awaits some of them this fall. Notices of monthly surcharges involving both Medicare Part B and Part D premiums in 2018 will be sent to affected Medicare enrollees in October. But sometimes those surcharges can be reversed.If clients' income exceeds certain levels—$85,000 for singles or $170,000 for married couples—they may have to pay an income-related monthly adjustment amount, known as IRMAA. The Social Security Administration uses 2016 tax returns to determine Medicare premium adjustments for 2018. IRMAA letters will be sent to Medicare enrollees next month.The Medicare Rights Center is offering a free downloadable guide for financial advisers to help their clients appeal Medicare premium surcharges. The Medicare Rights Center also offers two continuing education programs to instruct advisers about Medicare rules, costs and enrollment deadlines. Both ... Read full post

Sep 6, 2017, 4:48 PM EST

Reverse mortgages under fire again ​

mortgage-money main

By Mary Beth Franklin

The Consumer Financial Protection Bureau (CFPB) issued a new report warning seniors against using a reverse mortgage as an income bridge to delay collecting Social Security benefits. While the report rightly points outs the potential risks of reverse mortgages, it demonstrates little understanding of the nuances of Social Security claiming strategies and overstates the typical cost of a reverse mortgage in today's marketplace.But new rules issued by this Department of Housing and Urban Development this week will increase the costs of reverse mortgages in the future and reduce the amount of equity seniors can borrow through the government-backed Home Equity Conversion Mortgage (HECM) program. The new rules take effect Oct. 2, 2017, but will not alter the terms of existing reverse mortgages. A reverse mortgage allows homeowners age 62 or older to tap some of the equity in their home through a lump sum, a line of credit, or regular... Read full post

Aug 16, 2017, 4:50 PM EST

Surprising Social Security rules on divorce

divorce-money main

By Mary Beth Franklin

Anyone who has read my columns about Social Security rules over the past several years undoubtedly knows that a couple must be married at least 10 years before divorcing to claim benefits on an ex-spouse's earnings record.Ho hum.But one astute financial adviser had an unusual question about whether the 10 years of marriage had to be consecutive. The scenario he outlined is a clear case of he loves me, he loves me not—times two!"I have a client who is divorced for more than two years and was married to the same person twice," wrote Mike Bruggemann of INPAC Wealth Solutions in Honolulu. "Each time was less than 10 years, but total length of the two marriages was more than 10 years," Mr. Bruggemann explained in an email. "Does that entitle her to claim on her divorced spouse's record?"Believe it or not, this situation is common enough that the Social Security Administration addresses the issue in its official program manual. Two... Read full post

Older »