Mary Beth Franklin

Retirement 2.0blog

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

Dec 22, 2015, 5:57 PM EST

Loss of file-and-suspend strategy may be overblown

By Mary Beth Franklin

The financial impact of eliminating the file and suspend Social Security claiming strategy slated to take effect this spring may might not be as severe as originally feared, according to one software company executive.For married couples, the ability to coordinate their Social Security claiming strategies can boost their combined lifetime income by $100,000 or more, according to some estimates. But the stand-alone file-and-suspend strategy that allows one spouse who is at least 66 years old to file for Social Security and immediately suspend benefits in order to boost future retirement income is not the most valuable part of the claiming strategy equation.Jeff Miller, co-founder of Social Security Choices, a software company that helps individuals and financial advisers calculate optimum Social Security claiming strategies, recently analyzed nearly 1,300 cases of couples who used his software. “Assuming normal life expectancy,... Read full post

Dec 15, 2015, 2:55 PM EST

New Social Security service connects advisers, clients with filing experts

By Mary Beth Franklin

Some financial advisers enjoy the challenge of delving into the weeds of Social Security rules and claiming strategies by incorporating sophisticated software programs into their retirement income practice. Others do not.Now that Congress has eliminated some of the key Social Security claiming strategies for all but a select group of near and current retirees who are grandfathered under existing rules based on their birth dates, some advisers wonder whether it is worth investing their time and money to learn about Social Security options that are disappearing.Now there is a service designed especially for them. Social Security Advisors plans to unveil its new concierge service by year-end. Think of it as the Uber of Social Security claiming strategies.“Our Social Security Concierge service is geared towards financial advisers who want to help their clients make the best Social Security decision possible and maximize their... Read full post

Dec 10, 2015, 11:02 AM EST

Rethinking retirement income replacement rules

By Mary Beth Franklin

I sympathize with financial professionals who try to advise their clients on how much to save for retirement when the traditional 80% of pre-retirement income target is being questioned. Some research suggests that the rule of thumb, based on gross earnings in prime career years before retirement, is too high. Others say it is too low, given rising out-of-pocket health care costs.But one thing is clear: Planning to work longer as a way to forestall retirement and minimize savings needs may be little more than wishful thinking. Many workers say they intend to work passed the traditional retirement age of 65, even though most current retirees retired sooner than they had planned, according to a new study from the Transamerica Center for Retirement Studies."The new vision of retirement among workers is a tremendous departure from the experiences of those already in retirement," said Catherine Collinson, president of the nonprofit research ... Read full post

Dec 2, 2015, 2:58 PM EST

Don't delay on file and suspend Social Security claims

By Mary Beth Franklin

The countdown clock is ticking on the valuable Social Security claiming strategy known as file and suspend. Not only do your clients have to be at full retirement age or older to take advantage of it, but they must submit their request to file and suspend before April 30, 2016.Miss that deadline and they are out of luck.Under existing rules, anyone who is 66 or older can file for Social Security benefits and immediately suspend them, allowing their benefits to earn delayed retirement credits worth 8% per year up to age 70, which can increase their benefits by up to 32%.In the meantime, filing for benefits triggers auxiliary benefits for an eligible spouse, minor dependent child or disabled adult child. It also allows a worker the option of requesting a lump sum payout of suspended benefits in lieu of delayed retirement credits — a particularly valuable option for single individuals.But under the new rules that were signed into... Read full post

Nov 27, 2015, 8:00 AM EST

Social Security changes present opportunities

By Mary Beth Franklin

Once you recover from the initial shock of learning that the most valuable Social Security claiming strategies are being phased out, take steps to turn this game-changing event into an opportunity.Or as Frank Horath, principal of Client First Financial, which specializes in Social Security income strategies, so aptly put it in a newsletter: “Carve out new client Social Security solutions this Thanksgiving.”That's what Derek Dockendorf and Matt Cosgriff, financial advisers with Bergan KDV Wealth Management in Minneapolis, plan to do. “We're using this as an opportunity to enhance our value to our clients,” said Mr. Dockendorf, a CPA and certified financial planner. “With our tax software, we can mine the data to search for clients based on their date of birth, filing status and whether they are currently drawing Social Security,” he said. “Once we identify those in the sweet spot, it creates an... Read full post

Nov 22, 2015, 10:11 AM EST

Social Security changes sting women retirees

By Mary Beth Franklin

Social Security benefits play a critical role in retirement income security for many American women. Given their longer life expectancy and the increasing divorce rate among older couples, women are more likely to spend their final years alone. In 2013, Social Security represented nearly half of all income for unmarried women, including widows age 65 or older, according to the Social Security Administration. More than 80% of retired women currently collecting Social Security took benefits early, locking in a lifetime of lower payments, according to a new Nationwide Retirement Institute survey. And nearly a quarter of them said if they could do it over again, they would have held out for a bigger benefit. “Women in general have to be prepared to live longer and often have to do so with less savings,” said Shawn Britt, director of advanced consulting for Nationwide Financial Services. “This makes maximizing Social... Read full post

Nov 18, 2015, 4:37 PM EST

Top questions about new Social Security claiming rules

By Mary Beth Franklin

My virtual mailbag is bursting at the seams with questions from InvestmentNews readers about how new regulation will affect Social Security claiming strategies for current and future retirees.First, let me stress that no one who is currently collecting Social Security benefits will be affected by the prospective changes to rules determining who can file and suspend Social Security benefits to allow a spouse, dependent or disabled child to collect auxiliary benefits while the wage earner's retirement benefit continues to grow until age 70. Second, the Social Security Administration has not yet issued any official guidance on the new rules. Consequently, industry experts are left to their own devices to interpret the effective date of the new regulations. President Barack Obama signed the Bipartisan Budget Act of 2015 into law on Nov. 2. The new regulations will take effect 180 days after enactment.Until SSA issues an official... Read full post

Nov 10, 2015, 5:04 PM EST

Software companies race to update Social Security advice

By Mary Beth Franklin

There's nothing like a bit of stealth legislation that upends the Social Security advice industry to figure out who is on top of their game — and who is not.Buried in the budget legislation designed to avoid a government shutdown was the elimination of two key Social Security claiming strategies that can help individuals, married couples and divorced spouses maximize their retirement benefits. Rules affecting surviving spouses have not changed.“Our software is already updated for advisers and consumers,” William Meyer, president and founder of Social Security Solutions, said via email just days after President Barack Obama signed the Bipartisan Budget Act of 2015 into law on Nov. 2. “In addition, we have a collateral kit of 10 pieces including a new seminar for advisers, frequently-asked-questions documents and additional pieces for both advisers and clients,” said Mr. Meyer, whose company includes the... Read full post

Nov 2, 2015, 3:30 PM EST

Social Security claiming strategy triage

By Mary Beth Franklin

The outrage is palpable. Financial advisers and their clients who were counting on exercising a coordinated claiming strategy to maximize their Social Security benefits and secure their retirement were shocked to learn that most of those options have been virtually eliminated by a stealth act of Congress.It's not just that file and suspend strategy and the option to restrict Social Security claims to spousal benefits have been eliminated for all but a small group of people who happened to be born at the right time. It's the fact that there was no advance warning. The Social Security rule changes were slipped into a backroom budget compromise designed to keep the country from running out of money.There were no public hearings on the subject. No legislation was introduced. Word leaked out last week just before the House approved the budget deal by a 222-167 margin on Wednesday. The Senate followed with a 64-35 approval in the dark of the ... Read full post

Oct 29, 2015, 6:12 PM EST

Social Security strategies grandfathered for existing claimants

By Mary Beth Franklin

The window is closing on exercising creative claiming strategies to maximize Social Security benefits, but retirees who are already receiving benefits are grandfathered in under the old rules.“This amendment grandfathers in anyone who is already using the claim-and-suspend filing option as well as those who request it between now and the next six months,” said Web Phillips, senior legislative counsel at the National Committee to Preserve Social Security and Medicare.In addition, anyone who is 62 or older by the end of 2015 will retain the right to collect just spousal benefits starting at their full retirement age of 66, assuming their spouse has already claimed retirement benefits or had requested to file and suspend their benefits within six months after enactment of the law.Future retirees who are younger than 62 — those born in 1954 or later — are out of luck. The rules regarding “file and... Read full post

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