Mary Beth Franklin

Retirement 2.0blog

Mary Beth Franklin - also known as the 'client whisperer' - on what your clients really want when they talk about retirement.

Jul 29, 2014, 4:05 PM EST

Little has changed in health of Social Security system

By Mary Beth Franklin

The looming, long-term deficit of the Social Security system is the perpetual elephant in the room in Washington. Each year, we are reminded of the silent giant's presence with the release of the Social Security Board of Trustees' annual report.The trustees released the 2014 report on Monday, about three months later than its usual April reporting date. It showed the combined asset reserves of the Old-Age and Survivors Insurance and Disability Insurance trust funds are projected to become depleted in 2033 — unchanged from last year's report. That means without future congressional action to cut benefits, increase taxes or both, the Social Security Administration would be able to pay just 77% of promised retirement and survivor benefits from payroll taxes beginning in 2033.But like the Indian folk tale of the six blind men who perceived the elephant differently depending on whether they grabbed its thin snake-like tail, its... Read full post

Jul 24, 2014, 3:04 PM EST

Advisers can answer divorced clients' Social Security questions, except one

By Mary Beth Franklin

I've been getting a lot of questions from financial advisers lately, asking how they can estimate potential Social Security benefits for divorced clients to plug into their retirement income calculations.That's a tough one. Advisers can't contact Social Security on their clients' behalf. Instead, they should direct their clients to contact the Social Security Administration about their potential benefits as a divorced spouse, assuming they would be eligible for benefits on their ex-spouse's earnings.In order to collect Social Security benefits as a divorced spouse, the marriage must have lasted at least 10 years and the client must be at least 62 and unmarried. In addition, the ex-spouse must also be at least 62.Assuming your client meets the length-of-marriage, age and single-status test, they can collect Social Security benefits as if they were still married. The maximum benefit as a divorced spouse is equal to one-half of the amount ... Read full post

Jul 22, 2014, 1:04 PM EST

How to calculate Social Security's maximum family benefit

By Mary Beth Franklin

The Social Security Administration estimates that 4.4 million children receive about $2.5 billion each month because one or both of their parents are disabled, retired or deceased.I often argue about the value of delaying Social Security benefits until full retirement age or later, but when a young family is involved, claiming benefits early can make sense.One reader asked me to weigh in on the wisdom of collecting Social Security as soon as possible at age 62. His situation: He is 61 and has a 43-year-old wife and two young children, ages 7 and 4.If he waited until his full retirement age of 66 to claim Social Security benefits, he would collect about $2,500 per month. At 62, it is closer to $1,850 per month. But claiming early means his family could also collect benefits four years early.(Don't miss Mary Beth on 3 smart Social Security strategies for married couples)Each of his two children could receive a monthly payment of up to... Read full post

Jul 16, 2014, 3:51 PM EST

Widower asks why he didn't get survivor benefits

By Mary Beth Franklin

I received an e-mail from a widowed dad who asked why he didn't receive Social Security survivor benefits when his wife died eight years ago.“When my wife died in 2006, we had children who were 14 and 16 years old,” he wrote. “The children received survivor benefits until they were out of high school.”The reader asked the Social Security Administration why he, too, didn't receive survivor benefits. He was told he was not eligible at the time, but he could begin collecting them once he turned 60.“In this age of political correctness, why is it a wife can collect survivor benefits but a husband cannot?” he asked me.I assured the reader that he was not the victim of a sexist plot.Social Security benefits are gender neutral. Surviving spouses of either sex are eligible for survivor benefits of their deceased mate as early as age 60 and, in some cases, at younger ages if they are caring for the deceased... Read full post

Jul 15, 2014, 2:48 PM EST

Retirement: From theory to practice

By Mary Beth Franklin

After decades of writing about retirement planning, I finally get to eat my own cooking — at least the appetizer course. My husband, Mike, retired June 30 after more than 20 years as a federal government employee. On July 1, we began a new phase of married life — one where we share our home 24/7. It's not unusual for one spouse to retire while the other continues to work. But as I work from home, I am curious how our newfound togetherness will evolve and wonder if our big house is big enough for both of us.Mike assures me that he is merely retiring from his government job, not from work in general. He says he just wants to take a break to recharge his batteries before he figures out what he wants to do next. He might revive the one-man public relations shop that he successfully ran for 10 years. Thanks to his exceptional promotional skills, he propelled me from an obscure newspaper columnist working in my basement office to ... Read full post

Jul 4, 2014, 1:39 PM EST

Updated book is an essential guide to Social Security

By Mary Beth Franklin

How do you like to do your research — with an encyclopedia or Cliff's Notes?If you prefer to have all the facts at your fingertips, you would be wise to pick up the 2014 edition of Social Security: The Inside Story by Andy Landis.Mr. Landis is a veteran employee of the Social Security Administration and has been publishing this bible of Social Security rules and benefits for more than 20 years. I bow to his expertise.But if you like a quick and to-the-point resource, the downloadable PDF of my guidebook Maximizing Your Clients' Social Security Retirement Benefits should be your first choice. Even Mr. Landis admits it packs a powerful punch in 25 pages.“Your PDF on filing strategies completely blows my mind — and teaches me a few new tricks,” Mr. Landis wrote to me in an email. “Your ability to put so many complex filing strategies in so brief a document — and so clearly — amazes me,” he ... Read full post

Jul 1, 2014, 12:07 PM EST

Reduced earnings late in career might not reduce Social Security benefit

By Mary Beth Franklin

I received a letter from a financial adviser the other day asking about a client who is still working at 63 years old, but who has significantly scaled back his work hours and earnings. She wondered what impact that might have on his future Social Security benefits. I'm sure other advisers have similar questions.“His estimated benefits statement says that if he continues working until full retirement age, he will receive about $2,500 per month in benefits,” the adviser wrote to me in an e-mail. “But that assumes he will make full salary for the next three years, which he will not,” she wrote. “How can he arrive at a more accurate estimate of his benefits?” His estimated benefits are close to this year's maximum retirement benefit of $2,642 per month for a worker retiring at age 66 in 2014. That suggests the client is a high earner. Remember, Social Security only counts earnings up to the taxable wage ... Read full post

Jun 25, 2014, 3:22 PM EST

Undoing a hasty Social Security claiming decision

By Mary Beth Franklin

Does this sound familiar? You have a new client in their late 60s who recently learned about the benefits of delaying Social Security benefits, and they come to you for advice. The problem: they have already started collecting Social Security benefits. The new clients want to know if they can reverse their decision and, if so, at what price.That's the situation that Kevin Thompson, a retirement specialist with Mariner Wealth Advisers in Omaha, Neb., faced recently.“I have a new client who is 68 years old and who has been taking Social Security since age 66,” Mr. Thompson wrote to me in an e-mail. “His benefit is $2,000 per month. His wife, who will be 67 in July, has been taking Social Security since age 66 — not quite a year. Her benefit is $1,400 per month.”Mr. Thompson's goal was to find a way to increase the husband's benefit, since it is the larger of the two and is the one the wife will inherit as a ... Read full post

Jun 23, 2014, 3:20 PM EST

Women closing financial literacy gender gap

By Mary Beth Franklin

It may come as no surprise that women are better than men at asking for directions when they are lost — whether on a busy highway or the road to retirement. But it can still be a long, arduous journey.Women are approaching their finances more proactively and using financial wellness programs at work more often and more regularly than men, according to a new survey by Financial Finesse, a provider of workplace financial wellness programs. In 2013, women made up 63% of financial wellness program participants, a steady increase from 60% in 2012 and 52% in 2011 when the company first started tracking this data.In spite of these rising numbers, there is still a significant knowledge gap between men and women in nearly every key area of financial planning, particularly investing and cash management, which are essential to building long-term wealth.Don't miss: Three steps to greater gender diversity in the RIA industry)The study found... Read full post

Jun 19, 2014, 3:32 PM EST

How gay couples can act on Social Security benefits now

By Mary Beth Franklin

As the number of states that recognize gay marriage continues to grow, it is important for financial advisers to be aware of the Social Security benefits that may be available to clients now or in the future.Since the Supreme Court struck down a key part of the Defense of Marriage Act in June 2013, 19 states and the District of Columbia have legalized same-sex marriage. (Mary Beth Franklin on how same-sex couples can protect their Social Security)Those jurisdictions encompass every state along the Eastern seaboard from Maryland to Maine — including Vermont, New Hampshire, Massachusetts, Connecticut, Rhode Island, New York, New Jersey, Pennsylvania and Delaware —as well as the West Coast states of California, Oregon and Washington. In addition, Hawaii, Iowa, Illinois, Minnesota and New Mexico permit same-sex couples to legally marry.In another 12 states, judges have issued rulings in favor of the freedom to marry, with many... Read full post

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