Mary Beth Franklin

Retirement 2.0blog

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

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

Feb 5, 2015, 9:55 AM EST

How to best minimize taxes during retirement

By Mary Beth Franklin

Maximizing Social Security benefits through appropriate claiming strategies is just the first step in improving your clients' retirement success. The second, more complicated step is to minimize their taxes by locating assets in the proper type of accounts and tapping those assets in the optimum order. The combination of higher Social Security benefits and lower marginal tax rates results in more spendable retirement income in the long run and can extend the life of your clients' portfolio, reducing the chance they will run out of money.Conventional wisdom dictates that retirees tap their taxable accounts first, followed by tax-deferred retirement accounts, and finally tax-exempt Roth individual retirement accounts. But this withdrawal hierarchy could unintentionally increase a client's overall tax burden, including boosting the portion of Social Security benefits subject to income taxes and triggering higher Medicare premiums when... Read full post

Jan 29, 2015, 9:43 AM EST

Social Security reaches 75th anniversary of first monthly retirement check

By Mary Beth Franklin

Let me take a moment to acknowledge a historic event. Jan. 31 marks the 75th anniversary of the first monthly Social Security retirement check. Ida May Fuller, a legal secretary from Vermont, received the first monthly old-age benefit of $22.54 under the then-new Social Security law. The check was dated Jan. 31, 1940.Ms. Fuller's story, recounted in detail in the history section of the Social Security Administration website, underscores one of the most important aspects of the nation's retirement system: Benefits continue for the rest of your life, no matter how long you live. In Ms. Fuller's case, that turned out to be a very long time indeed. Born on a farm outside of Rutland, Vt., on Sept. 6, 1874, Ms. Fuller lived to 100. By the time she died on Jan. 31, 1975 — 35 years after receiving her first Social Security check — she had collected nearly $23,000 in benefits.As American longevity continues to increases, deciding... Read full post

Jan 26, 2015, 6:27 PM EST

Two new Social Security books to add to your go-to list

By Mary Beth Franklin

Financial advisers often ask me for recommendations of which books to read to enhance their knowledge of Social Security rules and claiming strategies.I, of course, tell them to start with my ebook "Maximizing Your Clients' Social Security Retirement Benefits". Think of it as the CliffsNotes of Social Security rules that every financial adviser should know.Looking for something more you can add to your bookshelf? I also refer readers to some old standbys — all available at for around $20 — including "Social Security: The Inside Story" (CreateSpace, 2014) by former Social Security Administration employee Andy Landis; "Social Security Strategies" (self-published, 2011) by Social Security Solutions founders William Meyer and William Reichenstein; and ”Social Security Essentials” (Social Security Timing, 2013) by financial adviser Dean Barber and Joe Elsasser, founder of Social Security Timing software.... Read full post

Jan 22, 2015, 12:00 PM EST

A recipe for future retirement security

By Mary Beth Franklin

When the American College of Financial Services released the results of its first-ever “Retirement Income Literacy Survey” last December, I dutifully reported the astounding results: Just 20% of retirement-age Americans can pass a basic quiz on how to make their nest eggs last throughout retirement.Then I took the 38-question quiz. Frankly, I'm not surprised that a majority of the more than 1,000 people between the ages of 60 and 75 who took this test failed. Unless you are accustomed to reading industry reports on best ways to invest and draw down savings in retirement or are conversant in the probability of needing long term care, I think that some of these questions are beyond the general knowledge of the average American. David Littell, director of the retirement income program at the American College, admitted that the quiz isn't easy. But he said the purpose is to shine a spotlight on some of the very complex... Read full post

Jan 20, 2015, 6:53 AM EST

Investigate Social Security claiming tools for free

By Mary Beth Franklin

I often receive emails from financial advisers asking my opinion about the “best” Social Security planning tools. I tell them it depends on how much they want to spend, how detailed they want to get and how well the Social Security tools integrate with their existing financial planning software.When considering a Social Security software program, make sure it covers all of your potential client profiles including married couples, single and divorced individuals and widows and widowers. If your practice includes public sector employees who do not pay FICA payroll taxes, it is critical that any Social Security claiming tool you use can handle the Windfall Elimination Provision and Government Pension Offset rules that can reduce or wipe out potential Social Security benefits.You also need to think about how you want to present a Social Security claiming strategy to your clients. Is the client-facing report generated by the... Read full post

Jan 12, 2015, 4:17 PM EST

House GOP targets Social Security funding

By Mary Beth Franklin

House Republicans flexed their muscles during the first week of the new session of Congress, setting up a future fight over Social Security funding that will probably take shape in the lame-duck session after the 2016 elections.On the first day of the new session of the 114th Congress last week, the new Republican majority adopted a procedural rule that forbids the House from approving any financial fix to the Social Security Disability Insurance program unless it is accompanied by broader Social Security reforms. The SSDI Trust Fund is expected to run out of money in 2016.The 36-page set of rules passed 234-172, with all Democrats opposed and almost every Republican in favor.I warned InvestmentNews readers in November that they would be hearing a lot about Social Security disability benefits this year. But even I was caught off guard by how quickly House Republicans moved on the issue.(More: 10 ways to maximize Social Security... Read full post

Jan 9, 2015, 2:14 PM EST

Social Security's special tax rule for repaying benefits

By Mary Beth Franklin

Increasingly, some financial advisers are encouraging their retirement-age clients who have no immediate need for extra income to repay Social Security benefits they've already received and reapply for benefits later when they will be worth more.But what if those Social Security benefits have already been taxed? Is there a way to recoup taxes on benefits that are later repaid?That's the question Mary Dean, a financial planner with Dean Roland Russell Family Wealth Management in San Diego, posed in a recent email.“My 68-year-old client will make over $100,000 in 2015 and does not need Social Security,” Ms. Dean wrote in an e-mail. “Her first Social Security check was received in December 2014,” she explained. “What form does she need to repay the Social Security received?” Anyone who changes their mind within 12 months of first receiving Social Security retirement benefits can withdraw their... Read full post

Jan 5, 2015, 6:47 AM EST

How Social Security cost-of-living adjustments change benefits this year

By Mary Beth Franklin

Starting this month, more than 58 million Social Security recipients will see a slight increase in their monthly retirement and survivor benefits — up 1.7% from last year — while high-income workers will pay up to $114.75 more in payroll taxes.The maximum Social Security benefit for someone retiring at the full retirement age of 66 in 2015 is $2,663 per month. That's up $21 from the maximum benefit of $2,642 per month for someone who retired at full retirement age in 2014.But typical retirees, many of whom claim reduced benefits early, receive a lot less. The Social Security Administration estimates the average Social Security benefit in 2015 will be $1,328 per month, up $22 from last year.Retirees can claim Social Security benefits as early as age 62, but they are reduced by 25% compared with claiming at full retirement age. And those who claim Social Security before full retirement age while continuing to earn income from ... Read full post

Dec 30, 2014, 3:36 PM EST

Resolving confusion over Social Security survivor benefits

By Mary Beth Franklin

Social Security benefits can be pretty darn confusing. But sometimes, what a Social Security representative tells prospective beneficiaries and what those consumers hear may be two different things. As memorialized in the 1967 movie “Cool Hand Luke,” what we've got here is a failure to communicate.For example, financial adviser James Williams of FMG Financial Management Group in Lancaster, Pa., emailed me about his new clients. The husband, John, is 64 and began collecting reduced Social Security benefits early at 62, before engaging Mr. Williams as his adviser. John's wife, Mary, who is 50 and still working, is the higher-earning spouse.According to Mr. Williams, John and Mary visited their local Social Security office two years ago to determine whether he should claim benefits early at 62. The couple said the Social Security representative told them that because of the couple's age difference and because there are no... Read full post

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