Mary Beth Franklin

Retirement 2.0blog

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

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

Apr 18, 2016, 5:14 PM EST

Social Security planning still critical after demise of file and suspend

By Mary Beth Franklin

Even after the “file-and-suspend” Social Security claiming option sunsets on April 29, many Americans age 62 or older still will have a lot to cheer about.The Bipartisan Budget Act of 2015 eliminated two key Social Security claiming strategies. The first one, known as file and suspend, allows someone 66 or older to file for Social Security in order to trigger benefits for a spouse or minor dependent child while suspending his or her own benefit until it is worth more later. The file and suspend option disappears at the end of this month. But the phase-out period for the other strategy, known as filing a “restricted application” for spousal benefits, will continue for many years to come. This second strategy benefits married couples and eligible divorced spouses who were married at least 10 years. It allows someone who is 66 or older to claim only spousal benefits — worth half of their mate's or ex-mate's... Read full post

Apr 13, 2016, 3:16 PM EST

Health care costs squeeze retirement savings

By Mary Beth Franklin

Once upon a time, workplace-based savings accounts were focused largely on retirement. Contributions to 401(k) plans or similar employer-sponsored plans helped employees build a retirement nest egg while reducing their current tax burden. But that traditional savings model is being challenged by competing priorities for scarce dollars.In the past, workers usually looked to their employers for affordable group health insurance coverage as an expected part of their overall compensation package and the lucky ones could sometimes count on continued coverage in retirement. But as health care costs increased, many employers have shifted some of the financial burden of health care coverage to their employees, often pairing high-deductible health insurance plans with flexible spending accounts (FSAs) or more recently, health savings accounts (HSAs).As a result, today's employees are faced with numerous decisions about how to divvy up their... Read full post

Apr 12, 2016, 2:11 PM EST

The file and suspend countdown

By Mary Beth Franklin

What a difference a day makes — particularly when that day is April 30, 2016. Anyone who is 66 or older by the end of April can still file and suspend their Social Security benefits by April 29 under existing rules that allow them to trigger benefits for an eligible family member while their own retirement benefit continues to grow by 8% per year up to age 70. Those who file and suspend by April 29 also reserve the right to request a lump sum payout of suspended benefits instead of collecting delayed retirement credits. (More: Avoid local Social Security offices and file for benefits online)For example, a higher-earning husband who is 66 or older may want to file and suspend his benefits by April 29 to trigger a spousal benefit for his wife or a dependent benefit for a minor child under age 18 or a permanently disabled adult child. Each benefit is worth up to 50% of the worker's full retirement age amount, subject to family... Read full post

Apr 5, 2016, 3:26 PM EST

When Social Security is a family affair

By Mary Beth Franklin

Normally, delaying Social Security benefits until they are worth more when claimed at an older age makes sense for clients who want to maximize their lifetime benefits. But when minor children are eligible for dependent benefits, sometimes claiming early makes sense.During one of my recent seminars instructing financial professionals on how to maximize Social Security benefits under new claiming rules, one adviser proposed an interesting case study. The husband is 62 and retired and the wife is 54 and still working. The couple have 14-year-old twins. The adviser asked whether the husband should claim Social Security benefits now even though they would be worth 25% less than if he waited until his full retirement age of 66 to claim them.Absolutely! In this case, when the husband claims his Social Security benefits as soon as he is eligible at age 62, it will trigger dependent benefits for his two minor children. A child is eligible to... Read full post

Mar 30, 2016, 6:48 AM EST

Avoid local Social Security offices and file for benefits online

By Mary Beth Franklin

My email inbox continues to fill up with complaints from financial advisers and individuals about false information they have received at their local Social Security offices when they attempted to file and suspend their benefits before the April 29 deadline. The frustration is palpable and some have even turned to their members of Congress for help.One adviser from North Carolina relayed the story of a couple who visited their local Social Security office in mid-March, the day after the husband's 66th birthday. He wanted to file and suspend his benefits so that when his wife turns 66 next year she could claim only spousal benefits for up to four years while her own benefit would continue to grow by 8% per year up until age 70. At 70, they would collect their maximum retirement benefits.“They were told by the local Social Security office that they could not do that — the claiming strategy was no longer allowed,” the... Read full post

Mar 21, 2016, 3:00 PM EST

When delayed retirement credits are delayed

By Mary Beth Franklin

I can tell that Social Security planning has reached maturity when questions involve not just tactics of how to boost future benefits but queries about when higher benefits are actually paid. Several InvestmentNews readers have written to me in recent weeks complaining that after postponing their retirement benefits in order to create a larger benefit amount at an older age, they did not receive the full delayed retirement credits that they earned.I looked into their complaints and learned that it is a matter of timing. They will receive their full delayed retirement credits, worth 8% per year (or 2/3 of 1% per month) for postponing their benefits beyond full retirement age up to age 70, but in some cases, they may have to wait an extra year for full payment.“I turned 66 years old on May 7, 2015, and my full retirement age benefit was $2,657 per month,” one reader wrote. “I will start collecting my benefit on June 8,... Read full post

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