Mary Beth Franklin

Retirement 2.0blog

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

Jun 29, 2016, 2:38 PM EST

Social Security benefits for noncitizens

By Mary Beth Franklin

Britain's recent decision to exit the European Union has dominated world headlines and underscored the interconnectedness of our global economy. For many financial advisers, headlines about immigration and international employment issues strike close to home following an uptick in the number of foreign-born clients. That has raised questions about whether those clients can collect the Social Security benefits they earned by working here or marrying a U.S. worker, particularly if they decide to retire to their home country or elsewhere abroad.As with so many aspects of Social Security rules, the answer is complicated. It depends on the worker's immigration status, years of residency in the U.S., country of origin and whether that nation has a bilateral agreement with the U.S. Advisers may want to download a copy of “Your Payments While You are Outside the United States” for a complete list of countries and circumstances that ... Read full post

Jun 20, 2016, 3:21 PM EST

Baby boomers reach required minimum distribution milestone for retirement accounts

By Mary Beth Franklin

The first of wave of baby boomers will hit an important milestone beginning July 1. Those earliest boomers born at the start of 1946 will turn 70 in mid-summer, and will be followed at the rate of 10,000 people per day for the next 18 years.Uncle Sam will have his hand out — not to applaud the generation's half-birthday but to collect income taxes from their retirement account distributions that have finally come due. It seems like a good time to review some basic distribution rules for IRAs, 401(k)s and other types of retirement savings plans.SPECIAL FIRST YEAR RULEClients who were born between January 1 and June 30, 1946 — who turn 70 this year — can choose to take their first required minimum distribution from their traditional IRAs (including SEPs and SIMPLE IRAs) by Dec. 31, 2016, or delay until April 1, 2017. But if they decide to take advantage of the April 1 deadline that is available only for first-year... Read full post

Jun 16, 2016, 4:11 PM EST

Most recent retirees do not regret claiming Social Security early

By Mary Beth Franklin

A majority of recent retirees (69%) would not change the age they started to collect Social Security, according a new survey of Americans age 50 or older released by the Nationwide Retirement Institute on Thursday.The survey found nearly a quarter of recent retirees (23%) regret claiming their Social Security benefits before full retirement age, while 2% said they would draw their benefits earlier and 6% said they were not sure.Of the respondents who said they would not change when they began claiming benefits, 39% said they were reacting to events beyond their control such as poor health or job loss, according to the third annual online survey of more than 900 Americans in or nearing retirement.The survey revealed that one of the biggest shocks to current retirees is the cost of health care. One in four respondents said health care expenses keep them from enjoying the retirement lifestyle they had expected. Separately, a study... Read full post

Jun 6, 2016, 5:30 PM EST

Social Security cost-of-living adjustment unlikely for 2017

By Mary Beth Franklin

If inflation continues at its current low pace, 2017 may turn out to be another year when Social Security recipients will not receive an automatic increase in their monthly retirement and disability benefits. If that happens, it would mark the second year in a row — and the fourth time since 2010 — that there will be no cost-of-living adjustment (COLA) in Social Security benefits.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 — if any — would be based on the increase in the third-quarter average CPI-W for 2016 over the third quarter of 2014, the last year in which a COLA became effective.Although inflation could pick up between now and the end of September that marks the end of the third quarter, the latest CPI-W is 0.3% lower than the average CPI-W for the base... Read full post

Jun 1, 2016, 2:30 PM EST

Longevity may alter financial planning

By Mary Beth Franklin

Longevity is a hot topic among financial services firms. Based on the fact that people are living about 30 years longer on average than they did a century ago, several major companies have teamed up with leading research institutions to figure out what these added years may mean for financial planning.A few months ago, I reported on the latest installment of a multi-year study by Bank of America Merrill Lynch and Age Wave on the impact of longer lives on various aspects of retirement living including health, home, family, giving, leisure, work and finances. In my article, “Longevity can be an asset in retirement,” I discussed how an increased pool of retirees could be a boon for charities and nonprofit organizations in the future if older Americans continue to donate their time and money to their favorite causes at their current rate. Although Americans age 65 represent just 31% of today's population, they account for 42%... Read full post

May 25, 2016, 4:56 PM EST

Social Security, divorce and remarriage

By Mary Beth Franklin

The rules governing Social Security benefits for divorced spouses are complicated. No surprise there. But even I learned something new the other day thanks to a question submitted by an InvestmentNews reader.First, let's review the basics. As long as you were married at least 10 years, are age 62 or older, are divorced and currently single, you can collect benefits on your ex's earnings record just as if you were still married (even if your ex has remarried).But other basic Social Security claiming rules apply. If you are also entitled to benefits on your own work record and you claim benefits before your full retirement age, which is currently 66 for anyone born from 1943 to 1954, Social Security will only pay you a spousal benefit if it is larger than your own. A spousal benefit is worth 50% of the worker's benefit if the spouse claims at 66 or later; less if claimed earlier.In most cases when a retirement benefit is larger than a... Read full post

May 16, 2016, 12:01 AM EST

New tool aims to optimize retirement withdrawals

By Mary Beth Franklin

Social Security Solutions, creator of the SS Analyzer tool for financial advisers, unveiled its new Income Solver software program today that aims to help financial advisers manage retirement income withdrawals in the most tax-efficient way, resulting in more spendable income for clients.“For years, conventional wisdom has led advisers to distribute clients' income first from taxable accounts, then from tax-deferred accounts and finally from tax-exempt accounts,” said Bill Meyer, founder and managing principal of Social Security Solutions and Retiree Inc. “Our research has proven incontrovertibly that the status quo is sub-optimal."That research, conducted by William Reichenstein, a professor at Baylor University and head of research for Retiree Inc. and Social Security Solutions, shows that a tax-efficient withdrawal strategy, coupled with optimization of the client's Social Security income, can enable the client to... Read full post

May 10, 2016, 12:04 PM EST

How to become a Social Security expert

By Mary Beth Franklin

How can I become a Social Security expert? That is one of the most common questions I receive from InvestmentNews readers. And if you think you are too late to hop on the Social Security bandwagon in light of the scheduled elimination of two key Social Security claiming strategies, you couldn't be more wrong.Helping clients determine the best time to claim Social Security benefits to suit their personal situation will continue to be a key element of a solid retirement income plan. And given the current confusion over claiming options, it's a perfect time to brush up on key Social Security rules so you can answer your clients' and prospective clients' questions.The ability to file and suspend benefits at age 66 ended on April 29. Those who filed and suspended their benefits before the deadline are grandfathered under the old rules that allow a worker to trigger benefits for an eligible family member, such as a spouse or minor dependent... Read full post

Apr 27, 2016, 5:25 PM EST

Relief for looming Social Security deadline

By Mary Beth Franklin

In the words of Matthew Allen, a Social Security expert whose company helps financial advisers and their clients determine an optimum claiming strategy, "This has been a crazy week!"What an understatement. The opportunity to request to file and suspend Social Security benefits under the more-favorable existing rules expires at midnight on Friday. As long as someone is 66 or older by April 30, 2016, they can request to file and suspend their benefits by the April 29 deadline, the Social Security Administration said in its interpretation of the new claiming rules created by the Bipartisan Budget Act of 2015. That will trigger Social Security benefits for eligible family members, such as a spouse or minor dependent child, while the worker's own benefit continues to grow by 8% per year up until age 70.The file-and-suspend strategy is also valuable for single people who may want to lock in the option to request a lump sum payout of all of... Read full post

Apr 25, 2016, 4:06 PM EST

Social Security employees finally get instructions on how to implement new claiming rules

By Mary Beth Franklin

Good news, folks. Apparently employees in Social Security field offices finally got official instructions on how to implement the new claiming rules — 11 days before the first claiming option known as file and suspend disappears forever.The lack of clarity over the new rules authorized by the Bipartisan Budget Act of 2015 has been a source of frustration for financial advisers and their clients. The legislation was signed into law on Nov. 2, 2015, but the agency's only official communications with its field offices were contained in two separate emergency messages issued in February with the promise that specific instructions would follow.In the meantime, the range of advice issued by local offices and hotline operators was inconsistent. If it wasn't such a serious breakdown of communication, in might be downright funny.Some Social Security applicants were told they could not file and suspend their benefits even though they were... Read full post

« Newer Older »