Mary Beth Franklin

Retirement 2.0blog

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

Nov 22, 2015, 10:11 AM EST

Social Security changes sting women retirees

By Mary Beth Franklin

Social Security benefits play a critical role in retirement income security for many American women. Given their longer life expectancy and the increasing divorce rate among older couples, women are more likely to spend their final years alone. In 2013, Social Security represented nearly half of all income for unmarried women, including widows age 65 or older, according to the Social Security Administration. More than 80% of retired women currently collecting Social Security took benefits early, locking in a lifetime of lower payments, according to a new Nationwide Retirement Institute survey. And nearly a quarter of them said if they could do it over again, they would have held out for a bigger benefit. “Women in general have to be prepared to live longer and often have to do so with less savings,” said Shawn Britt, director of advanced consulting for Nationwide Financial Services. “This makes maximizing Social... Read full post

Nov 18, 2015, 4:37 PM EST

Top questions about new Social Security claiming rules

By Mary Beth Franklin

My virtual mailbag is bursting at the seams with questions from InvestmentNews readers about how new regulation will affect Social Security claiming strategies for current and future retirees.First, let me stress that no one who is currently collecting Social Security benefits will be affected by the prospective changes to rules determining who can file and suspend Social Security benefits to allow a spouse, dependent or disabled child to collect auxiliary benefits while the wage earner's retirement benefit continues to grow until age 70. Second, the Social Security Administration has not yet issued any official guidance on the new rules. Consequently, industry experts are left to their own devices to interpret the effective date of the new regulations. President Barack Obama signed the Bipartisan Budget Act of 2015 into law on Nov. 2. The new regulations will take effect 180 days after enactment.Until SSA issues an official... Read full post

Nov 10, 2015, 5:04 PM EST

Software companies race to update Social Security advice

By Mary Beth Franklin

There's nothing like a bit of stealth legislation that upends the Social Security advice industry to figure out who is on top of their game — and who is not.Buried in the budget legislation designed to avoid a government shutdown was the elimination of two key Social Security claiming strategies that can help individuals, married couples and divorced spouses maximize their retirement benefits. Rules affecting surviving spouses have not changed.“Our software is already updated for advisers and consumers,” William Meyer, president and founder of Social Security Solutions, said via email just days after President Barack Obama signed the Bipartisan Budget Act of 2015 into law on Nov. 2. “In addition, we have a collateral kit of 10 pieces including a new seminar for advisers, frequently-asked-questions documents and additional pieces for both advisers and clients,” said Mr. Meyer, whose company includes the... Read full post

Nov 2, 2015, 3:30 PM EST

Social Security claiming strategy triage

By Mary Beth Franklin

The outrage is palpable. Financial advisers and their clients who were counting on exercising a coordinated claiming strategy to maximize their Social Security benefits and secure their retirement were shocked to learn that most of those options have been virtually eliminated by a stealth act of Congress.It's not just that file and suspend strategy and the option to restrict Social Security claims to spousal benefits have been eliminated for all but a small group of people who happened to be born at the right time. It's the fact that there was no advance warning. The Social Security rule changes were slipped into a backroom budget compromise designed to keep the country from running out of money.There were no public hearings on the subject. No legislation was introduced. Word leaked out last week just before the House approved the budget deal by a 222-167 margin on Wednesday. The Senate followed with a 64-35 approval in the dark of the ... Read full post

Oct 29, 2015, 6:12 PM EST

Social Security strategies grandfathered for existing claimants

By Mary Beth Franklin

The window is closing on exercising creative claiming strategies to maximize Social Security benefits, but retirees who are already receiving benefits are grandfathered in under the old rules.“This amendment grandfathers in anyone who is already using the claim-and-suspend filing option as well as those who request it between now and the next six months,” said Web Phillips, senior legislative counsel at the National Committee to Preserve Social Security and Medicare.In addition, anyone who is 62 or older by the end of 2015 will retain the right to collect just spousal benefits starting at their full retirement age of 66, assuming their spouse has already claimed retirement benefits or had requested to file and suspend their benefits within six months after enactment of the law.Future retirees who are younger than 62 — those born in 1954 or later — are out of luck. The rules regarding “file and... Read full post

Oct 28, 2015, 6:50 AM EST

Game almost over for Social Security claiming strategies

By Mary Beth Franklin

As soon as the news leaked out that a pending congressional budget deal would kill existing Social Security claiming strategies for almost everyone, I was inundated with questions from financial advisers and individual consumers about what it all means.Was I surprised? Yes. Absolutely gob smacked!Will retirees who already exercised such creative claiming strategies such as file and suspend or filing a restricted claim for spousal benefits before this legislation is signed into law be grandfathered? It appears that in most cases, they would not be protected.First, let me explain what the legislation says and then what it means. Please keep in mind, this situation is fluid. The legislation passed the House 222-167 Wednesday and now moves on to the Senate, where it is expected to win support and be signed by President Obama.It all started with Mr. Obama's budget proposal for fiscal year 2015. In that document, the administration called... Read full post

Oct 19, 2015, 6:59 PM EST

The Social Security survivor benefit do-over

By Mary Beth Franklin

I have been a road warrior lately, traveling all across the country from New York to Los Angeles spreading the word about smart Social Security claiming strategies. My favorite part is the interaction with the audience following my presentations. Although I can easily answer about 99% of the questions, every once in a while I get one that stumps me.On a recent trip, I was surprised to be asked the same confounding question during stops in three different cities: Could a widow or widower stop collecting a survivor benefit in order to receive a larger amount later? Frankly, I wasn't sure. I knew that anyone who is collecting retirement benefits has an once-in-a-lifetime opportunity to withdraw their application for benefits within the first 12 months of claiming them. To do so, they must file form 521 and repay any retirement benefits that they have received, as well as any auxiliary benefits collected on their earnings records by a... Read full post

Oct 13, 2015, 2:35 PM EST

Seniors squeezed by no Social Security increase

By Mary Beth Franklin

By the time the Social Security Administration makes its official announcement about 2016 benefit levels later this week, it will be old news. As I reported in early August, there will be no increase in Social Security benefits next year as inflation over the past 12 months has been too low to trigger an automatic cost-of-living adjustment.This will mark the third time that seniors have received no increase in their Social Security benefits since automatic COLAs were enacted by Congress in 1975. The first two times were in 2010 and 2011.This week's drama will instead focus on a simultaneous announcement by the Center for Medicare and Medicaid Services regarding how much retirees will pay for their Part B Medicare premiums, which covers a portion of the cost for doctors' visits and other outpatient services.Although the majority of Medicare recipients will continue to pay the same $104.90 per month base amount for Medicare Part B in... Read full post

Sep 28, 2015, 2:25 PM EST

Complex Social Security rules for divorced spouses

By Mary Beth Franklin

One of the least understood rules for claiming Social Security benefits pertains to the rights of divorced spouses.A recent joint study conducted for the AARP and the Financial Planning Association found that only 26% of married or previously married consumers who participated in the online survey last summer could correctly identify the key Social Security rule governing divorce.To refresh your memory, that rule is that a marriage must have lasted at least 10 years before a divorce in order for someone to be able to collect spousal benefits on an ex's earnings record. Or to put it another way, at least a decade must elapse between “I do” and “I don't.”(More: 10 top Social Security questions for divorced spouses)Sadly, nearly one-third of survey respondents thought they could never collect Social Security benefits based on the ex-spouse's work record regardless how long the couple had been married, according to... Read full post

Sep 23, 2015, 2:37 PM EST

How Social Security claiming strategies affect Medicare premiums

By Mary Beth Franklin

Ever since I first wrote about the likelihood that there will be no cost-of-living adjustment in Social Security benefits in 2016, I have been inundated with questions from readers asking how their clients will be affected.Although Social Security benefits are likely to be frozen at current levels in 2016 because of negligible inflation over the past year, some retirees could see a net reduction in their monthly benefits next year. That's because Medicare Part B premiums, which are usually deducted directly from Social Security payments, could increase for some beneficiaries, meaning their net Social Security benefits could decline in 2016.The Social Security Administration and the Centers for Medicare and Medicaid Services are expected to announce the new 2016 levels for benefits and premiums next month.FILE AND SUSPENDOthers who are enrolled in Medicare but have not yet collected Social Security benefits could see a steep increase in ... Read full post

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