Mary Beth Franklin

Retirement 2.0blog

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

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

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

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