Mary Beth Franklin

Retirement 2.0blog

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

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

Apr 20, 2015, 7:09 AM EST

Singles can file and suspend Social Security benefits

By Mary Beth Franklin

I have received emails from several financial advisers recently asking about the availability of the Social Security file-and-suspend claiming strategy for single clients. “I have a single, never-married client, working full time who elected to file and suspend her Social Security benefits at her full retirement age,” wrote Shannon Hannon, a financial adviser with LPL Financial in West Bloomfield, Mich.“The client received a phone call from the Social Security office saying since she isn't married, she can't file and suspend her benefits,” Ms. Hannon said in an e-mail. “I thought any earner is eligible to file and suspend, without regard to marital status.”Ms. Hannon is correct. The ability to file and suspend benefits depends on age, not marital status.But just in case, I checked with the Social Security Administration. “Any primary retirement insurance beneficiary who has reached full... Read full post

Apr 15, 2015, 11:03 AM EST

Nearly half of retirees wish they had retired earlier

By Mary Beth Franklin

This is National Retirement Planning Week. From April 13 through 17, you can expect to hear from a coalition of financial services firms and consumer advocates as they sound the alarm about the coming retirement crises.Numerous experts will stress that the only way for most Americans to bridge the yawning gap between their retirement income needs and their meager nest eggs is to start saving earlier and to plan to work longer. They'll add a pitch about the importance of working with a financial adviser to make an achievable retirement plan and to stick with it.But first, let's take time for a reality check from real people who have already retired.A recent survey of retirees between the ages of 62 and 70 with investable assets of $100,000 or more revealed that nearly half of them wished they had retired sooner. The survey, conducted for New York Life Insurance Co., a leading provider of fixed immediate and deferred annuities, found the ... Read full post

Apr 14, 2015, 3:48 PM EST

Social Security closes claiming loophole for people with disabilities

By Mary Beth Franklin

If you see something, say something. We have all grown accustomed to that public safety announcement in airports, train stations and subways warning us to speak up if something seems amiss in our post-9/11 society. I want to thank Boston University economics professor Laurence Kotlikoff for being the first to sound the alarm about a minor change in the Social Security Program Operations Manual System (POMS) late last year that resulted in a big change in the rights of people who receive Social Security disability benefits.First, let me give you a little background. Social Security disability benefits automatically convert to retirement benefits at full retirement age, although the monthly amount remains the same.Until late last year, it appeared that disability beneficiaries could request to withdraw their benefits to prevent the automatic conversion to retirement benefits. That withdrawal would allow them to collect spousal or... Read full post

Apr 3, 2015, 12:05 PM EST

Social Security consolation prizes for divorced spouses

By Mary Beth Franklin

(An earlier version of this article incorrectly stated that an ex-wife is entitled to 50% of her ex-husband's Social Security as long as she is caring for their child who is under age 16.)Divorce can certainly complicate Social Security claiming rules. As long as a marriage lasted at least 10 years, a divorced spouse who is currently unmarried can claim Social Security benefits on an ex's earnings records as if they were still married.But in some cases, divorce spouses have more benefit options after they split up than they ever did when they were married.(More: 10 top Social Security questions for divorced spouses)For example, if a nonworking wife who is at least 62 years old and currently married wants to claim spousal benefits on her husband's earnings record, she must wait for her husband to take some action. The husband has to either claim benefits or file and suspend his benefits at his full retirement age in order to enable his... Read full post

Mar 31, 2015, 3:14 PM EST

Income spike can reduce Social Security benefits

By Mary Beth Franklin

Retired clients are often surprised — and sometimes angry — when they receive a notification from the Social Security Administration that their monthly Social Security benefits will decline for the coming year. Naturally, those clients turn to their financial advisers for help.The culprit? An increase in income one year can result in higher Medicare Part B premiums two years later. As Medicare Part B premiums are deducted directly from Social Security benefits, the result is a smaller net Social Security benefit. Premiums for Medicare Part D drugs plans also increase when income rises, but those premiums usually are paid directly to the drug plan. However, you can choose to have Part D premiums deducted from your Social Security benefits, too.Kyle Mostransky, a registered representative with Mostransky Financial Services in Huntington, N.Y., contacted me recently about one of his clients who received such a notice.... Read full post

Mar 19, 2015, 2:26 PM EST

New retirement planning: How to spend your time, not your money

By Mary Beth Franklin

My office bookshelves are crammed with financial titles explaining how to save for retirement, ensure that my money lasts a lifetime, use strategies to protect my nest egg from the devastating health care costs, retire wealthy and, failing that, great jobs for people 50 and older.But lately, I've noticed a subtle shift in subject matters under the retirement literary umbrella. More self-declared authors, many of them financial advisers, Wall Street veterans and former corporate executives, are expounding not on how people should spend their hard-earned money in retirement, but how they should spend their time.Ken Blanchard, co-author of “The One Minute Manager,” teamed up with psychologist Morton Shaevitz, to tell the world how to “make the rest of your life the best of your life” in a new book “Refire! Don't Retire.” They offer step-by-step checklists based on their personal journeys to reignite the ... Read full post

Feb 27, 2015, 3:01 PM EST

Stop guesstimating, or worse, ignoring, your clients' health care costs in retirement

By Mary Beth Franklin

Health care costs are key component of retirement expenses but devilishly difficult to estimate. Consequently, many financial advisers are forced to take the path of least resistance by either guessing the amount of health care costs to include in a retirement income and expense plan — or ignoring them.New research from the Employee Benefit Research Institute (EBRI) separates retiree health care expenses into two categories: recurring and non-recurring.The institute finds that recurring health care services such as doctor and dentist visits and use of prescription drugs, usually remain stable throughout retirement. But non-recurring expenses such as overnight hospital and nursing home stays, outpatient surgery and home health care tend to increase with age and generally are more expensive.“Health care is one of the key components of retirement expenses and is the only part of household expenditures that increases with age,... Read full post

Feb 19, 2015, 1:14 PM EST

Social Security rules for divorced public employees

By Mary Beth Franklin

Divorced couples who were married for at least 10 years can claim Social Security benefits on each other's earnings records as if they are still married. But questions may arise when one of the ex-spouses is a public sector employee.Last week, an adviser asked me if her client's Social Security benefits would be reduced because she receives a government pension based on her ex-spouse's public service as part of a divorce settlement.Delia Fernandez of Fernandez Financial Advisory in Los Alamitos, Calif., said she has a client who was married for 12 years and has been divorced for more than 30 years. As part of the divorce decree, her client, now 68, was awarded $1,200 a month in pension benefits based on her ex-husband's service as a Los Angeles County firefighter — work where he did not pay Social Security payroll taxes for much of his career.“Is my divorced client's Social Security on her own record going to be reduced... Read full post

Feb 9, 2015, 6:55 AM EST

Testing Social Security 'what if' scenarios

By Mary Beth Franklin

Increasingly, financial advisers are helping their clients realize that when they retire and when they begin to collect Social Security benefits are two separate decisions. Stopping work does not necessarily mean it's time to claim Social Security, particularly if clients can rely on other sources of income while they wait to collect a bigger retirement benefit later.Still, many advisers wonder how they can quantify the value of those future Social Security benefits, as estimates are based on the assumption that a worker continues to work and earn about the same salary through retirement age. But what happens if there are several years of reduced earnings — or even no earnings — between the end of work and the beginning of benefits?Luckily, there is a handy tool on the Social Security website that can help you and your clients tinker with several “what if” scenarios. For example, clients can use the Retirement... Read full post

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