Mary Beth Franklin

Retirement 2.0blog

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

Aug 2, 2017, 5:29 PM EST

A refresher course on Social Security claiming rules


By Mary Beth Franklin

By now, most financial advisers should be generally familiar with the changes to Social Security claiming rules that took effect last year. But it is the nuances of the new rules that can thwart a carefully crafted retirement income plan. Based on the numerous emails I have received from advisers, it seems a refresher course is in order. Here is a summary of the claiming rules authorized by the Bipartisan Budget Act of 2015.The claiming strategy known as "file and suspend" is no longer available, but those clients who took advantage of this strategy before the April 29, 2016, deadline are grandfathered under the old rules, as are their spouses and dependents.The file-and-suspend strategy could trigger benefits for spouses and/or minor dependent children or permanently disabled adult children while the worker's own benefit would continue to accrue delayed retirement credits worth 8% per year up to age 70. At that point, the worker could ... Read full post

Jul 27, 2017, 2:35 PM EST

Most women flunk retirement income literacy quiz

frustration stress paperwork retirement main

By Mary Beth Franklin

It is unfortunate that the people who are likely to live the longest understand the least about how to make their money last a lifetime. Only 18% of retirement age women can pass a basic quiz about how to make a nest egg last in retirement, according to findings from The American College of Financial Services' 2017 RICP Retirement Income Literacy Gender Differences Report. That's about half the rate of men of the same age. RICP stands for Retirement Income Certified Professional, a designation offered through The American College.Even though more than 80% of women failed the quiz, the majority—55%—are still extremely confident that they and their spouses would have enough money to retire comfortably. Call it the Scarlett O'Hara syndrome. Apparently, many women simply plan to think about it tomorrow. Unfortunately, many of them will spend their final years alone due to divorce, widowhood or never being married."Women face... Read full post

Jul 10, 2017, 9:38 AM EST

How Social Security treats the survivors of young workers


By Mary Beth Franklin

I just received a sad question from a financial adviser in Indiana who asked if there would be any Social Security benefits available for a young widow and child following the death of their 25-year old husband and father in a traffic accident. She noted that the young man had not worked long enough to accrue the 40 credits usually required to be eligible for Social Security benefits.I assured her there is an exception to the 40-credit rule when a very young worker dies or becomes disabled. The adviser's question really hit home, as I was on the way to a funeral of my 31-year-old nephew who had died over the July 4th weekend. Although most of us think of Social Security as a government program for older people who retire or become disabled or that pays survivor benefits to elderly widows and widowers, it also provides valuable benefits for very young workers. Because of their brief careers, the eligibility rules are more lenient.A... Read full post

Jul 6, 2017, 2:58 PM EST

Dual income couples complicate Social Security earnings test


By Mary Beth Franklin

With so many people planning to work beyond normal retirement age, dual-income couples create a challenge for financial advisers when it comes to recommending a Social Security claiming strategy.Anyone who claims Social Security benefits before full retirement age while continuing to work could lose some or all of their benefits — at least temporarily — if they earn too much. In 2017, "too much" is defined at $16,920 if someone is under full retirement age for the entire year. They would lose $1 in benefits for every $2 earned over that limit.In the year someone reaches full retirement, during the months before their 66th birthday, a more generous earnings test applies. They would lose $1 in benefits for every $3 earned over $44,880 in 2017. Once someone (who was born from 1943 through 1954) reaches 66, the earnings test disappears. Benefits lost due to excess earnings are automatically restored at full retirement age in... Read full post

Jun 29, 2017, 11:57 AM EST

An adviser's guide to Social Security survivor benefits


By Mary Beth Franklin

One of the primary tenets of financial planning is to anticipate a worst-case scenario and to implement a strategy to buffer the risk. For many families, the untimely death of a parent or spouse can spell financial disaster.While Social Security survivor benefits alone may not be sufficient to support surviving spouses and children during difficult times, they can play a crucial role in maintaining financial stability. Based on recent emails, many financial advisers are attempting to include Social Security survivor benefits in their "what if" scenarios, prompting questions about how to estimate the amount of those benefits.One adviser from Dallas posed questions about his clients, a married couple where the husband is 62 and the wife is 60. They both plan to delay claiming Social Security retirement benefits until they turn 70, but the adviser wondered what would happen if the husband, who has a slightly larger full retirement age... Read full post

Jun 14, 2017, 6:06 PM EST

Retiree health care costs rising faster than Social Security benefits


By Mary Beth Franklin

Health care costs in retirement are rising twice as fast as the average annual increase in Social Security benefits, putting a crucial source of retirement income on a collision course with one of the biggest expenses retirees face. Over time, retiree health care costs for today's workers could exceed their gross Social Security payments.The third annual "Retirement Health Care Data Report" projects that lifetime health care premiums for Medicare Parts B and D, supplemental Medigap insurance and dental insurance for an average 65-year-old couple retiring this year is $321,994 in today's dollars. When deductibles, copays, hearing, vision and dental out-of-pocket costs are added, total lifetime retirement health care costs could top $400,000, according to HealthView Services, which produces health care cost-projection software for financial advisers and financial institutions.While the numbers are eye popping, HealthView Services chief... Read full post

Jun 5, 2017, 3:17 PM EST

Social Security cost-of-living adjustment predicted for 2018


By Mary Beth Franklin

Social Security beneficiaries have lost nearly a third of their buying power since 2000 as the costs of items typically purchased by the elderly have significantly outstripped the annual inflation increases in their retirement benefits, according to a new report by The Senior Citizens League (TSCL) obtained by InvestmentNews.But creeping inflation over the past 12 months may have a silver lining. Based on Consumer Price Index (CPI) data through April of this year, the consumer advocacy group estimates that the Social Security cost-of-living adjustment for 2018 will be about 2.1% — significantly higher than the paltry 0.3% increase this year.Social Security inflation adjustment have averaged only 1% since 2012, including no increase in 2016. COLAs are based on increases in the CPI-W, which measures price inflation for urban workers, from the third quarter of the prior year to the corresponding quarter of the current year. The... Read full post

May 24, 2017, 6:24 PM EST

Rectifying Social Security's flawed advice


By Mary Beth Franklin

Forgive me if you are tired of reading about the bad advice being dispensed by Social Security representatives. But this story has a happy ending and offers some helpful, step-by-step guidance of how to help clients caught in a bureaucratic maze.Several months ago, Jana Davis, a financial adviser in Los Angeles, wrote to me asking for help with one of her clients, a divorced woman trying to claim spousal benefits on her ex-husband's earnings record. "I have a client who fits all of the divorced spouse criteria for receiving a spousal benefit from her ex-husband," Ms. Davis wrote. "She was married more than 10 years, has been divorced more than two years and never remarried," she wrote. "We know that half of her ex's benefit will be more than her full retirement age benefit," she added. "She is age 68 and her ex-husband has just reached his full retirement age of 66."Ms. Davis instructed her client to apply for her Social Security... Read full post

May 15, 2017, 1:52 PM EST

Social Security Administration steps up online security


By Mary Beth Franklin

Here we go again. The Social Security Administration announced that, beginning June 10, users of the agency's online services will need a one-time code to log into My Social Security accounts, which provide access to personal benefit estimates and lifelong earnings records.The agency's previous attempt to institute enhanced online security last year was short lived.On July 30, 2016, the Social Security Administration (SSA) began requiring new and current Social Security account holders to sign into their account using a one-time code text message as an extra measure of online security. Two weeks later, the agency reversed itself in response to public outcry from senior advocacy groups and some members of Congress who noted that many seniors do not have cell phones or live in rural areas without reliable cell phone service."Online security is vital, but we feel alternate options should be offered," said Mary Johnson, a policy consultant ... Read full post

May 9, 2017, 6:02 PM EST

Social Security blocks clients' claiming strategies


By Mary Beth Franklin

I am detecting a pattern. Time after time, a financial adviser recommends how a client should claim their Social Security benefits in a way that will maximize their lifetime income, only to be thwarted by a well-meaning Social Security representative who talks the client out of their intended strategy by offering a bigger immediate benefit.During my recent appearance at the InvestmentNews Retirement Income Summit in Chicago, I talked to numerous advisers who shared their frustration over this situation."We recommended that my client, who was 67 at the time, take her spousal benefit in February 2016," said Kelly Cartier, a financial adviser with Cartier Financial in Clearwater, Fla. "But when she went to Social Security office in March 2016, they suggested she take her full retirement age benefit instead and get a lump sum payment going back to full retirement age rather than taking the spousal benefit and letting her benefit grow to... Read full post

« Newer Older »