Mary Beth Franklin

Retirement 2.0blog

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

Jul 2, 2015, 1:24 PM EST

Social Security update for gay couples

By Mary Beth Franklin

Last week's landmark Supreme Court ruling allowing same-sex couples the right to marry in every state opened the door for gay couples nationwide to apply for Social Security spousal, survivor and disability benefits, as well as Medicare coverage, subject to other existing program rules.To qualify for Social Security and disability benefits, a couple must be married at least 12 months before each spouse can apply to become the other's beneficiary. A spousal benefit is worth up to 50% of the worker's full retirement age benefit, also known as the primary insurance amount, or PIA, if the spouse who is collecting the benefit is at least full retirement age — currently 66. A spousal benefit is available as early as age 62, but it is worth just 35% of the worker's PIA.To qualify for Social Security survivor benefits and one-time lump-sum death benefit of $255, a surviving widow or widower must have been married at least nine months... Read full post

Jun 24, 2015, 3:02 PM EST

Growing consumer demand for health care and Social Security advice

By Mary Beth Franklin

The financial planning industry is at a turning point in how to address Social Security and Medicare as part of overall retirement planning. Although numerous surveys have shown that more than half of retirees and pre-retirees expect health care and Social Security advice from their financial adviser, the percentage of advisers who are willing and qualified to offer this type of advice remains low.“This presents a major opportunity for advisers and firms that do offer this specialized advice to differentiate themselves and gain market share,” according to a new white paper produced by Senior Market Sales Inc., a national insurance marketing organization. “Those who continue to ignore the role that Medicare and Social Security play in retirement risk losing clients,” the paper concluded.“"The New Foundation of Retirement Planning: Social Security and Medicare" white paper doesn't break new ground. Rather,... Read full post

Jun 22, 2015, 2:48 PM EST

Tackling the challenge of 401(k)s for small businesses

By Mary Beth Franklin

One of the biggest challenges to retirement savings in America is having access to a 401(k) or similar savings plan at work. Workers who have a workplace-based savings plan are four times more likely to have saved for retirement compared to those who don't, according to the Employee Benefits Research Institute's 2015 Retirement Confidence Survey.Many employees who don't have access to a 401(k) work for small businesses that don't have the money or the staff resources to sponsor a retirement savings plan. In fact, only 14% of small businesses provide a 401(k) versus 89% of large companies, meaning about 78 million Americans don't have an employer-sponsored retirement plan, according to EBRI.But thanks to technological advancements and a plan design inspired by the latest behavioral finance research, a 401(k) plan is now within the reach of a local hair salon, small manufacturing firm or start-up tech company. A new company based in San ... Read full post

Jun 12, 2015, 1:16 PM EST

Majority of Americans flunk Social Security quiz

By Mary Beth Franklin

How much do Americans know about their Social Security benefits? Not much, it turns out. And that could have serious implications for their future retirement income.Only 28% of more than 1,500 adults received a passing grade when asked basic questions about Social Security benefits in a true/false quiz developed by Massachusetts Mutual Life Insurance Company. And only one person who participated in the online survey conducted by KRC Research on behalf of MassMutual from Feb. 26 to March 2, answered all 10 questions correctly. (Full disclosure: I have been paid by MassMutual to speak at their events.)"Perhaps the greatest Social Security deficit in this country is the lack of education around the retirement benefits of the program, which presents an opportunity and responsibility to financial professionals," said Michael R. Fanning, executive vice president of the U.S. insurance group at MassMutual. "With millions of Americans nearing... Read full post

Jun 9, 2015, 2:05 PM EST

A Social Security benefit is a terrible thing to waste

By Mary Beth Franklin

As I travel around the country teaching financial advisers and their clients about smarter ways to claim Social Security benefits, my "magic age" strategies often trigger surprise and gratitude among my audiences who are astonished to learn about various ways they can maximize their benefits.But sometimes, there is no clever claiming strategy available to boost lifetime benefits given the difference in ages between two spouses or the relative amount of their Social Security benefits. And that leads to frustration and disappointment.Case in point: A financial adviser, who asked to remain anonymous, wrote to me recently asking for guidance about how to optimize Social Security benefits for her clients. The husband, who turned 66 in April, has not yet claimed his Social Security benefit, which is worth $2,560 per month at his full retirement age. His wife will turn 66 two years from now in July 2017.The adviser said she planned to... Read full post

May 27, 2015, 3:45 PM EST

When both spouses lose some or all of their Social Security benefits

By Mary Beth Franklin

If you collect Social Security benefits before your full retirement age of 66 and you continue to work, you can lose some or all of your benefits if your earnings exceed annual limits.Normally, the earnings cap applies only to the person who is working. But if one spouse is collecting benefits on the other spouse's earnings record, both spouses could temporarily lose some or all of their Social Security benefits.Jon Smith, vice president of wealth planning at Stifel Financial Corp., wrote to me with an interesting question about this scenario.“Let's say I am 64 years old and I have been collecting my Social Security retirement benefits for two years,” Mr. Smith wrote. “My wife, a homemaker, is also 64 and collecting spousal benefits on my earnings record,” he continued. “Then I get a job offer and I am now making $100,000 per year,” he added. “How does the Social Security Administration apply... Read full post

May 19, 2015, 4:00 PM EST

Social Security's $12.4 million error

By Mary Beth Franklin

With more than 2,700 rules governing Social Security benefits, it's amazing that monthly payments to 59 million beneficiaries — including retired and disabled workers, their spouses, dependent children and survivors — go as smoothly as they do. But with more than $800 billion a year in Social Security payments at stake, even minor errors can add up to big bucks.For example, a recent report by the Office of the Inspector General of the Social Security Administration found that the agency improperly paid 1,013 beneficiaries an estimated $12.4 million in spousal benefits that they were not supposed to receive because they were subject to Government Pension Offset (GPO) rules.And if the error is not corrected, the agency will continue to pay those 1,000-plus individuals about $2.5 million a year in improper benefits.In addition, the audit report identified 7,794 spousal beneficiaries who could have received some Social Security ... Read full post

May 11, 2015, 2:41 PM EST

Elder care needs will transform advice industry

By Mary Beth Franklin

If you're like most financial advisers, you are focused on how to capture a piece of the lucrative IRA rollover market as baby boomers transition into retirement. But fast forward 10 or 20 years and those same clients may be less interested in golf and travel and more concerned about assisted living and estate planning. Will you be ready to address their evolving needs?Dennis Gallant, president of GDC Research, a consulting firm that provides market research and analysis for the financial services industry, has discussed how aging clients and end-of-life issues will affect advisers' practices over the next few decades. As clients age and their needs grow, advisers will face both enormous challenges and business development opportunities, Mr. Gallant said during a recent webcast sponsored by the Retirement Income Industry Association. It's easy to ignore the long-term implications of the aging baby boomers — for now. Advisers are ... Read full post

May 4, 2015, 12:15 PM EST

Missed Social Security claiming opportunity costs client more than $29,000

By Mary Beth Franklin

Which is harder to swallow: realizing that your advice cost a client more than $29,000 in lost Social Security benefits or owning up to the mistake? Here's a bonus question: What do you do when the client is your mother-in-law? Ouch!I received an email from a financial adviser in Salt Lake City recently who faced this situation. For obvious reasons, he would like to remain anonymous."I thought I knew a lot about Social Security, but I learned a new and costly (around $29,100) lesson two weeks ago," the adviser wrote to me in an email."My mother-in-law is a widow and is turning 66 in June," he wrote. "She went into the Social Security Administration (SSA) office about a month ago to make all of the necessary preparations to start receiving her full survivor benefit when she turned 66," he explained."During the appointment, the SSA counselor asked whether she realized that she could have filed for and received her own reduced retirement... Read full post

Apr 27, 2015, 2:45 PM EST

Friends are OK, as we cruise toward retirement

By Mary Beth Franklin

For the 25th year in a row, the Employee Benefits Research Institute (EBRI) released its annual report card on the state of Americans' retirement savings. This was the first time that I didn't cover the release of the time-honored EBRI report, but I had a good excuse. I was enjoying a five-day Caribbean cruise with eight friends from high school. Still close after 47 years, we decided to take a cruise to celebrate our collective 60th birthdays.The 2015 EBRI survey shows that a majority of Americans — 58% — are confident or somewhat confident about having enough money for a comfortable retirement. That's a significant increase from the record lows recorded from 2009 to 2013.I took advantage of my captive audience to conduct my own retirement confidence focus group over dinner one night. It seemed an appropriate venue since our friendship began around the school lunch table when we met as freshmen in 1968.The results of our... Read full post

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