Mary Beth Franklin - also known as the 'client whisperer' - on what your clients really want when they talk about retirement.
Jan 26, 2015, 6:27 PM EST
Financial advisers often ask me for recommendations of which books to read to enhance their knowledge of Social Security rules and claiming strategies.I, of course, tell them to start with my ebook "Maximizing Your Clients' Social Security Retirement Benefits". Think of it as the CliffsNotes of Social Security rules that every financial adviser should know.Looking for something more you can add to your bookshelf? I also refer readers to some old standbys — all available at Amazon.com for around $20 — including "Social Security: The Inside Story" (CreateSpace, 2014) by former Social Security Administration employee Andy Landis; "Social Security Strategies" (self-published, 2011) by Social Security Solutions founders William Meyer and William Reichenstein; and ”Social Security Essentials” (Social Security Timing, 2013) by financial adviser Dean Barber and Joe Elsasser, founder of Social Security Timing software.... Read full post
Jan 22, 2015, 12:00 PM EST
When the American College of Financial Services released the results of its first-ever “Retirement Income Literacy Survey” last December, I dutifully reported the astounding results: Just 20% of retirement-age Americans can pass a basic quiz on how to make their nest eggs last throughout retirement.Then I took the 38-question quiz. Frankly, I'm not surprised that a majority of the more than 1,000 people between the ages of 60 and 75 who took this test failed. Unless you are accustomed to reading industry reports on best ways to invest and draw down savings in retirement or are conversant in the probability of needing long term care, I think that some of these questions are beyond the general knowledge of the average American. David Littell, director of the retirement income program at the American College, admitted that the quiz isn't easy. But he said the purpose is to shine a spotlight on some of the very complex... Read full post
Jan 20, 2015, 6:53 AM EST
I often receive emails from financial advisers asking my opinion about the “best” Social Security planning tools. I tell them it depends on how much they want to spend, how detailed they want to get and how well the Social Security tools integrate with their existing financial planning software.When considering a Social Security software program, make sure it covers all of your potential client profiles including married couples, single and divorced individuals and widows and widowers. If your practice includes public sector employees who do not pay FICA payroll taxes, it is critical that any Social Security claiming tool you use can handle the Windfall Elimination Provision and Government Pension Offset rules that can reduce or wipe out potential Social Security benefits.You also need to think about how you want to present a Social Security claiming strategy to your clients. Is the client-facing report generated by the... Read full post
Jan 12, 2015, 4:17 PM EST
House Republicans flexed their muscles during the first week of the new session of Congress, setting up a future fight over Social Security funding that will probably take shape in the lame-duck session after the 2016 elections.On the first day of the new session of the 114th Congress last week, the new Republican majority adopted a procedural rule that forbids the House from approving any financial fix to the Social Security Disability Insurance program unless it is accompanied by broader Social Security reforms. The SSDI Trust Fund is expected to run out of money in 2016.The 36-page set of rules passed 234-172, with all Democrats opposed and almost every Republican in favor.I warned InvestmentNews readers in November that they would be hearing a lot about Social Security disability benefits this year. But even I was caught off guard by how quickly House Republicans moved on the issue.(More: 10 ways to maximize Social Security... Read full post
Jan 9, 2015, 2:14 PM EST
Increasingly, some financial advisers are encouraging their retirement-age clients who have no immediate need for extra income to repay Social Security benefits they've already received and reapply for benefits later when they will be worth more.But what if those Social Security benefits have already been taxed? Is there a way to recoup taxes on benefits that are later repaid?That's the question Mary Dean, a financial planner with Dean Roland Russell Family Wealth Management in San Diego, posed in a recent email.“My 68-year-old client will make over $100,000 in 2015 and does not need Social Security,” Ms. Dean wrote in an e-mail. “Her first Social Security check was received in December 2014,” she explained. “What form does she need to repay the Social Security received?” Anyone who changes their mind within 12 months of first receiving Social Security retirement benefits can withdraw their... Read full post
Jan 5, 2015, 6:47 AM EST
Starting this month, more than 58 million Social Security recipients will see a slight increase in their monthly retirement and survivor benefits — up 1.7% from last year — while high-income workers will pay up to $114.75 more in payroll taxes.The maximum Social Security benefit for someone retiring at the full retirement age of 66 in 2015 is $2,663 per month. That's up $21 from the maximum benefit of $2,642 per month for someone who retired at full retirement age in 2014.But typical retirees, many of whom claim reduced benefits early, receive a lot less. The Social Security Administration estimates the average Social Security benefit in 2015 will be $1,328 per month, up $22 from last year.Retirees can claim Social Security benefits as early as age 62, but they are reduced by 25% compared with claiming at full retirement age. And those who claim Social Security before full retirement age while continuing to earn income from ... Read full post
Dec 30, 2014, 3:36 PM EST
Social Security benefits can be pretty darn confusing. But sometimes, what a Social Security representative tells prospective beneficiaries and what those consumers hear may be two different things. As memorialized in the 1967 movie “Cool Hand Luke,” what we've got here is a failure to communicate.For example, financial adviser James Williams of FMG Financial Management Group in Lancaster, Pa., emailed me about his new clients. The husband, John, is 64 and began collecting reduced Social Security benefits early at 62, before engaging Mr. Williams as his adviser. John's wife, Mary, who is 50 and still working, is the higher-earning spouse.According to Mr. Williams, John and Mary visited their local Social Security office two years ago to determine whether he should claim benefits early at 62. The couple said the Social Security representative told them that because of the couple's age difference and because there are no... Read full post
Dec 23, 2014, 2:55 PM EST
Two financial planners in Tennessee wrote me recently asking to confirm a Social Security claiming strategy that they planned to suggest to one of their female clients who is divorced. Jason Frazier and Nick Sowell of Shoemaker Financial sent me a list of questions to verify their understanding of the Social Security rules for divorced spouses. While they got most of the answers right, I was able to deliver a Christmas surprise that made them — and their client — very happy.Here's a summary of our correspondence, which I think is an excellent example of questions that advisers should review with their divorced clients who are nearing retirement age. Feel free to play along with today's installment of Social Security Trivia: Divorce Edition.(More: How one single woman can collect three types of Social Security benefits)The facts: The woman is divorced, almost age 60 and not remarried. She was married to her ex-husband for... Read full post
Dec 12, 2014, 2:55 PM EST
I've noticed an increased interest among financial advisers about Social Security rules that affect their public employee clients. It was a hot topic during my Dec. 9 webcast on Social Security claiming strategies.It is critical for financial advisers to know that clients who have worked for the city, state or federal government — or in some cases, public school systems — may be affected by rules that can reduce or eliminate their Social Security benefits. The Windfall Elimination Provision affects individuals who have worked in the private sector at least 10 years — long enough to qualify for Social Security benefits — and who also have worked in the public sector where FICA payroll taxes were not deducted from their earnings. To be subject to WEP rules, clients must have earned a pension from that public sector job. The WEP rules reduce monthly Social Security benefits by up to 50% of the amount of a public... Read full post
Dec 8, 2014, 6:43 AM EST
This the season of holiday parties and the dreaded social faux pas of double dipping your crudité in the ranch dressing. (You know, dip, bite, and dip again. Ew!)Let that be a reminder to you and your clients: no double dipping on Social Security claiming strategies either.I am always delighted to share the many rules and strategies of maximizing Social Security benefits with new readers and audiences. Inevitably, one of those novices will raise the very logical question of why married couples can't both file and suspend their benefits and then both file restricted claims so they can each collect spousal benefits while their own retirement benefits continue to grow up to age 70.It's a great idea, but the Social Security rules don't work that way. When it comes to collecting retirement benefits, each person is entitled to one Social Security election. (Survivor benefits are another story).You can claim reduced retirement benefits as... Read full post
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