Mary Beth Franklin

Retirement 2.0blog

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

Sep 26, 2016, 4:58 PM EST

Social Security timing can affect Medicare premiums

By Mary Beth Franklin

Social Security benefits are expected to increase slightly next year, and most retirees who have their Medicare premiums deducted directly from their Social Security benefits will be protected from a net decline in monthly benefits.However, clients who are enrolled in Medicare but not yet collecting Social Security could see a big increase in their monthly Medicare premiums in 2017. So could clients whose income tops $85,000 if they are single or $170,000 if they are married.That's because the Social Security Act includes a “hold harmless” provision that prevents a person's Social Security benefits from declining from one year to the next due to an increase in Medicare premiums. For most beneficiaries, that means Medicare Part B premiums, which pay for doctors' visits and outpatient services, cannot increase by more than the monthly increase in Social Security benefits next year. The 0.2% COLA projected by the Social... Read full post

Sep 20, 2016, 4:16 PM EST

GAO study documents mistakes by Social Security Administration staff

By Mary Beth Franklin

This should come as no surprise to InvestmentNews readers, but a new study shows government representatives often dole out incorrect or misleading information when people visit their local Social Security Administration (SSA) office in person to apply for benefits. Those who apply for benefits online tend to have better outcomes.In a new report, the Government Accountability Office (GAO) found that “certain key information is not provided or explained during the claims process” and “some claimants do not receive all the information that is critical to making informed claiming decisions.”The report, which was requested by the Senate Select Committee on Aging last year, examines the extent to which people understand Social Security rules affecting their retirement benefits and what information SSA provides to individuals to enable them to make informed claiming decisions. In addition to conducting a comprehensive... Read full post

Sep 12, 2016, 11:11 AM EST

Small Social Security cost-of-living adjustment likely for 2017

By Mary Beth Franklin

Although we are still a month away from an official announcement about the size of the annual cost-of-living adjustment (COLA) for Social Security benefits in 2017, the latest Social Security Trustees report projects a 0.2% increase in benefits next year.That would boost the average Social Security retirement benefit of $1,341 per month by about $2.70 and increase the maximum benefit of $2,663 per month in 2016 by about $5.30 next year. While that would be an improvement over this year when there was no inflation adjustment over 2015 benefit levels, a small COLA will do little to shield seniors' budgets from the specific type of inflation that they tend to experience compared to the general population.The Social Security Act provides for an automatic increase in benefits if there is an increase in inflation as measured by the Consumer Price Index for Urban Wage Earners (CPI-W). The COLA for 2017 would be based on the increase in the... Read full post

Sep 7, 2016, 6:15 PM EST

How Social Security benefits are calculated

By Mary Beth Franklin

I received an interesting question from a reader the other day regarding how Social Security benefits are calculated. He said that his wife, who is in her mid-30s, has an estimated Social Security benefit of about $2,600 per month at her full retirement of 67.The reader noted that her estimated benefit is close to the maximum retirement benefit of $2,639 payable in 2016. That maximum benefit amount does not include any delayed retirement credits that can boost benefits by an additional 8% per year between full retirement age and 70.“She has 30+ years until her full retirement age, and it would appear that she will only gain $15 more (plus cost-of-living adjustments) if she continued to work,” the reader said via email. “I assume the projections she gets are based on what she has earned up to this point, and are not assuming she continues to work at the same salary,” he added. “Thirty-one years of future... Read full post

Aug 30, 2016, 3:52 PM EST

New Congressional bill addresses Medicare enrollment confusion

By Mary Beth Franklin

In the past, the traditional retirement age of 65 was the trigger age for a host of crucial decisions: claiming Social Security benefits, enrolling in Medicare, retiring from a job and, if you were lucky, the start of collecting your pension.But ever since the full retirement age to claim Social Security benefits was increased to 66 for those born in 1943 through 1954, there is no longer a logical trigger for enrolling in Medicare except for those who are already collecting Social Security benefits. In that case, they are automatically enrolled in Medicare at age 65.But those who are not collecting Social Security benefits, either because they want to wait until they stop working or until benefits are worth more when they are older, are often unaware that they need to sign up for Medicare at 65 or face lifelong penalties if they don't.They must enroll in Medicare the during seven-month initial enrollment period that begins three months ... Read full post

Aug 22, 2016, 3:59 PM EST

Social Security and dying too soon

By Mary Beth Franklin

Almost every day I read another new study about the impact of increased longevity on financial planning. But last week I experienced a stark reminder about the perils of dying too soon.One of my dear friends died Aug. 15 at age 61, two months after she was diagnosed with lung cancer. It was a shock to our close-knit circle of friends whom I wrote about last year. It turns out that my friend will never have to worry about outliving her savings nor will she ever have the chance to collect her first Social Security check. And because she was a widow, there is no one to claim her survivor's benefit.Based on recent emails from InvestmentNews readers, it seems that sudden deaths among clients are not all that rare. They raised some interesting questions about Social Security survivor benefits.Craig Steinhauer, a financial adviser with NWF Advisory Group in Los Angeles, wrote to me about his client, a 58-year-old widow. Her husband died two... Read full post

Aug 19, 2016, 3:02 PM EST

Gray divorce on the rise with longevity trend

By Mary Beth Franklin

By now, financial planners are well acquainted with the challenges that increasing lifespans pose to retirement income plans. Longer lives means figuring out how to convert retirement savings into income that must last for decades.Now chalk up another victim of the longevity trend: marriage. The prospect of living unhappily ever after in a retirement that can last 20 or 30 years or more is one of the reasons behind the growing incidence of divorce among spouses age 50 and older. Throw in the possibility of an adult child living at home, and you have a recipe for a gray divorce, said Andrew Samalin, principal of Samalin Investment Counsel and former president of the Association of Divorce Financial Planners.“In the past, people would get divorced in their late 40s or early 50s when the kids left the house,” said Mr. Samalin. “Now kids are leaving the house later, people are living longer and couples are getting... Read full post

Aug 15, 2016, 5:19 PM EST

Social Security drops cell phone mandate

By Mary Beth Franklin

Well, that didn't last long. On July 30, 2016, the Social Security Administration 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 on online security. Two-weeks later, the agency reversed itself.The SSA's stepped-up security measure caught online account holders and senior advocacy groups by surprise and encountered technical problems from the start.“Our aggressive implementation inconvenienced or restricted access to some of our account holders,” Social Security press office spokesperson Dorothy Clark said via email. “We are listening to the public's concerns and are responding by temporarily rolling back this mandate,” Ms. Clark wrote. “We regret any inconvenience individuals may have experienced.”It's ironic that the recall occurred the day after the agency's 81st anniversary. It just goes to show how... Read full post

Aug 9, 2016, 2:50 PM EST

Careful planning can help public employees avoid Social Security reductions

By Mary Beth Franklin

Nothing angers public employees more than rules that reduce the Social Security benefits they have earned by working in the private sector when they are also eligible for a government pension based on work where they did not pay FICA taxes. Just mention “windfall elimination provision” (WEP) or “government pension offset” (GPO) and watch the sparks fly.Normally, public employees can't avoid these reductions. But one savvy adviser was able to help his client dodge the offsets completely by carefully timing when and how she claimed her Social Security benefits and her pension.First, let me review how these two rules work.The WEP reduces the earned Social Security benefits of an individual who also receives a pension from employment not covered by Social Security, such as a state or local government or federal employees covered by the old Civil Service Retirement System. The WEP reduces the individual's Social... Read full post

Aug 2, 2016, 3:00 PM EST

Social Security Administration steps up privacy protections

By Mary Beth Franklin

The Social Security Administration had added a new security step for users to access their benefit information online. Starting this month, all users will need a text-enabled cell phone number to log into their accounts at Ssa.gov/myaccount.From now on, accessing estimated benefits information online will require a two-step authentication process. First, you will enter your username and password. Next, you must enter the one-time security code texted to your cell phone. The code will be valid for 10 minutes.But on Day One, the process encountered technical difficulties. Verizon Wireless customers were unable to access their personal information on Monday. The agency said it was working to fix the problem.This multifactor authentication (MFA) procedure has been an optional service available to online users since the agency launched My Social Security in 2012. Now it is mandatory as a result of an executive order that requires all... Read full post

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