Mary Beth Franklin

Retirement 2.0blog

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

Jan 5, 2017, 3:23 PM EST

Social Security changes coming to beneficiaries and taxpayers in 2017

By Mary Beth Franklin

Social Security benefits for about 60 million retired and disabled workers and their dependents will increase slightly in 2017, but for many beneficiaries, the minuscule 0.3% cost-of-living adjustment will be wiped out by higher Medicare premiums.The 0.3% adjustment is the smallest annual increase since automatic COLAs began in 1975 (although there were three years — 2010, 2011 and 2016 — when there was no COLA). For the average retired worker, it means a $5 increase in monthly benefits in 2017. The maximum Social Security benefit for a high-income earner retiring at 66 this year will increase by $48 to $2,687 per month.Most Medicare enrollees who have their premiums deducted from their monthly Social Security benefits will pay about $109 per month in 2017, up about $4 per month from last year. But new enrollees in Medicare, as well as those who pay their Medicare Part B premiums directly, will pay the standard Part B... Read full post

Dec 28, 2016, 4:01 PM EST

Social Security rules for the twice-widowed client

By Mary Beth Franklin

The majority of American adults marry at least once during their lifetimes, but only about 40% of them stay married, according to the U.S. Census Bureau.Some Americans go on to marry a second time and a small percentage — 4% — marry three times or more. “Age is an important factor relating to remarriage as older individuals have had more time to see a previous marriage conclude and to remarry,” according to the Census Bureau report, Remarriage in the United States. “The proportion of men and women married twice is about 20% or higher for men and women aged 50 to 69,” the report said. That probably explains why I get so many questions about Social Security claiming strategies for serial spouses. This one came from Heather Piskorz, a retirement income specialist with Game Plan Financial, a marketing company that works with insurance professionals.“I'm working with a client who was married for 15 ... Read full post

Dec 27, 2016, 3:40 PM EST

2017 will be year of change for retirement industry

By Mary Beth Franklin

The financial advice industry faced some significant headwinds in 2016 from the rise of competition from robo-advisers to the historic expansion of regulation under the Department of Labor's fiduciary rule. Although the economic and public policy outlook is murky, thanks to the largely unexpected victory of president-elect Donald Trump, 2017 could be the year that holistic retirement planning becomes the norm.Demographics will drive demand for financial advice as baby boomers enter retirement at the rate of 10,000 people a day. The oldest boomers, born in 1946, have already reached the age 70 Ĺ milestone that requires them to start taking required minimum distributions from their retirement accounts. Some 24 million boomers are now 65 and older and 33 million more will join them over the next seven years. “The time has come to help them focus on the income that will support them throughout retirement,” said Cathy... Read full post

Dec 21, 2016, 5:09 PM EST

Calculating the impact of new Social Security rules

By Mary Beth Franklin

Looking back on the Social Security rules changes that took effect in 2016, some financial advisers may think that it is no longer worth their time to focus on claiming strategies to boost their clients' retirement income. But rather than playing the role of the Grinch that Stole Christmas, Congress actually handed financial advisers a gift last year that will keep on giving for years to come.The Bipartisan Budget Act of 2015 eliminated the use of the popular file and suspend strategy starting April 30, 2016, and phases out the ability of married couples and eligible divorced spouses to restrict their claim to spousal benefits depending on their birth date. As a result, figuring out the best Social Security claiming strategy to recommend to clients during the next few years may be even tougher.“Social Security is still complicated and clients are still expecting expert advice from you,” Social Security Solutions, a research ... Read full post

Dec 13, 2016, 2:23 PM EST

Social Security Administration evaluates online claiming tools

By Mary Beth Franklin

When to claim Social Security retirement benefits is one of the most important financial decisions an individual can make. Although the majority of retirees would like guidance from the Social Security Administration (SSA) on the best time to claim benefits, the agency is no longer in the business of giving advice.That creates a great opportunity for financial advisers.In the past, SSA claims representatives used a breakeven point comparison to inform potential claimants about how long it would take to recover benefits foregone at an earlier claiming age compared to waiting until a later age to collect a larger benefit. SSA discontinued this practice in 2008 “because the computation did not consider the changes in life expectancy, mortality rates and the personal factors that the claimant should evaluate when making benefit decisions,” according to the agency's Program Operations Manual System (POMS).In addition,... Read full post

Dec 8, 2016, 3:04 PM EST

Time for a new Social Security Commission

By Mary Beth Franklin

Based on the recent presidential campaign that was virtually devoid of public policy discussions, you would never know that the nation's bedrock retirement program — Social Security — will become insolvent in about 18 years when today's 49-year-olds reach full retirement age.Now that the election is over, it is time to get serious about the fate of this crucial program. The longer we wait to fix it, the harder it will be to solve the problems that are exacerbated by the demographics of a growing retiree population.The Social Security Trustees project that the program's trust funds, which hold surplus payroll tax revenues earmarked to pay benefits, will be exhausted in 2034. Currently, those trust fund assets are being used to supplement payroll tax collections to pay current beneficiaries. If Congress does nothing before 2034, all retirees, regardless of income, will see their benefits cut by 21%.(More: Seniors see Social... Read full post

Nov 30, 2016, 2:24 PM EST

Older investors use both financial advisers and online advice

By Mary Beth Franklin

Affluent older investors have increased their use of both online resources and paid financial professionals in the past year because they don't believe a single source can resolve all their questions, new research reveals. As more sources of information and advice become easier to use, consumers are asking questions and becoming choosier about which services they are willing to pay for.“Older investors have a growing appetite for both digital and live advice,” said Laura Varas, founder and CEO of Hearts & Wallets, a source for retail investor data and insights. “Blending behavior spikes for emotionally charged, high-impact decisions like optimizing Social Security when no one source provides confidence,” Ms. Varas said in releasing the latest insights gleaned from the firm's study “Explore Pre/Post-Retirees 2016: Digital Habits Revealed.”The study focuses on affluent consumers ages 53 to 74 with... Read full post

Nov 28, 2016, 4:44 PM EST

Many current retirees reluctant to tap savings

By Mary Beth Franklin

Despite all the warnings about the coming retirement crisis in America, current retirees seemed to be doing quite well in terms of financial assets and expenses. But the secret to their success — heavy reliance on traditional pensions — suggests that retiring boomers will need more help from financial advisers to achieve a similar level of retirement security.Pensions provided at least half of total income for the more than 40% of retirees who participated in an online survey conducted for the Insured Retirement Institute (IRI) last summer. In contrast, only 24% of private industry workers are covered by a defined benefit plan today.The IRI survey included more than 800 Americans between the ages of 65 and 80. Most had annual household incomes in excess of $50,000. All participants had investible assets of at least $50,000 and about half of them had investible assets between $100,000 and $500,000.The vast majority of these... Read full post

Nov 23, 2016, 12:41 PM EST

Seniors see Social Security changes as benefit cuts

By Mary Beth Franklin

Lawmakers who voted last year to do away with two key Social Security claiming strategies labeled their legislative action a “closure of unintended loopholes.” But a majority of senior voters disagree with that description.In a new poll conducted for The Senior Citizens League, 70% of respondents said the Social Security changes were “unnecessary benefit cuts.”A year ago, Congress passed the Bipartisan Budget Act of 2015 that authorized changes to Social Security rules. The law eliminated the ability of a worker to file and suspend benefits at full retirement age in order to trigger auxiliary benefits for a spouse while the worker's own retirement benefit continued to grow.(More: Advisers still baffled by key rule changes to Social Security claiming strategies)Under new rules that took effect on April 30, 2016, a worker of full retirement age or older can still suspend Social Security benefits in order to earn... Read full post

Nov 21, 2016, 4:37 PM EST

Why Social Security is crucial to women

By Mary Beth Franklin

Financial advisers looking to expand their roster of female clients would be wise to brush up on Social Security claiming rules. With women's longer life expectancies and the fact that they are more likely to live alone in old age due to widowhood or divorce, women represent more than half of all Social Security beneficiaries age 62 and older and two-thirds of all beneficiaries over the age of 85.In September, I shared critical Social Security claiming strategies with advisers attending the Financial Planning Association's annual conference in Baltimore and was honored by the Women's Institute for a Secure Retirement with one of its 2016 WISER Hero Awards for my ongoing work explaining Social Security rules to consumers and financial advisers. WISER is an organization based in Washington that helps women take financial control of their lives.It seems like a good time to remind my InvestmentNews readers about how careful claiming of... Read full post

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