Mary Beth Franklin

Retirement 2.0blog

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

Dec 22, 2017, 2:10 PM EST

New Social Security rules trip up widow's adviser


By Mary Beth Franklin

Whenever I conduct Social Security seminars for consumers and financial advisers around the country, I tell audiences that retirement benefits and survivor benefits represent two separate pots of money. Generally, if you are entitled to both, you can choose to collect one type of benefit first and switch to the other later if it would ultimately result in a larger amount. But that is not always the case. The new Social Security claiming rules that were authorized by the Bipartisan Budget Act of 2015 can sometimes play havoc with that general advice.During a recent seminar, a financial adviser asked me if his newly widowed client, who began collecting her own retirement benefits early, could suspend her benefits at 66 and collect survivor benefits on her late husband's earnings record. The adviser reasoned that the widow could earn delayed retirement credits of 8% per year between her full retirement age of 66 and age 70 while she... Read full post

Dec 6, 2017, 4:08 PM EST

Older boomers embrace retirement, study finds


By Mary Beth Franklin

A funny thing happened on the way to retirement. For many boomers, fear of the unknown gave way to contentment once they got to the other side.Six out of 10 retired boomers feel better than expected about their retirement, according to a new survey conducted by Capital Group, home of American Funds. The research analyzed the dynamics for boomer investors (age 53 to 71) as they transition into retirement.In contrast, Americans who are still working—including younger boomers, Gen-Xers (ages 38-52) and Millennials (ages 21 to 37)—are twice as worried about having enough money for retirement as retired boomers. Six out of 10 Americans (59%) currently in the workforce say that not having enough money for retirement is one of their top financial concerns compared to 28% of retirees.WORKING BOOMERSIn fact, the people who are most concerned about their ability to retire comfortably are boomers who are still working. Among boomers... Read full post

Dec 1, 2017, 2:50 PM EST

Last chance for clients to save on drug costs


By Mary Beth Franklin

There are only a few shopping days left—and I'm not talking about storming the local mall or clicking your way through to fulfill your loved ones' holiday wish list.I'm referring to something that can save older Americans significant money next year: re-shopping their Medicare Part D prescription drug plan. But time is running out. Medicare's open enrollment season ends Dec. 7.You might want to send out an e-mail reminder to older clients reminding them of this annual money-saving opportunity before the window closes. But don't be surprised if the only response is deafening silence.Part D is Medicare's insurance program for prescription drugs that originated in 2006. Older Americans enrolled in original Medicare Part A (hospitalization) and Part B (outpatient services and doctors' visits) can enroll in Part D when they first become eligible for Medicare at age 65 and can switch prescription drug plans each year during... Read full post

Nov 21, 2017, 4:54 PM EST

Medicare premiums and Social Security COLAs: Here's why retirees will pay up in 2018


By Mary Beth Franklin

Here's a riddle: How can Medicare premiums remain the same in 2017 and 2018 yet result in a 23% increase for millions of retirees?That's the quandary that many financial advisers will face next year when they try to explain to some retired clients why their Social Security check, after deducting for Medicare premiums, will be smaller in 2018 compared to this year.Blame it on the "hold harmless" provision designed to protect most retirees from a net decline in Social Security benefits from year to year. The provision prohibits annual increases in Medicare Part B premiums, which pay for doctor's visits and outpatient services, from exceeding the dollar amount of annual Social Security cost-of-living adjustments (COLA). The hold harmless provision applies to about 70% of retirees who have their Medicare Part B premiums deducted directly from their monthly Social Security payments. The remaining 30% are not protected because they do not... Read full post

Nov 6, 2017, 4:11 PM EST

Someone tried to hack my Social Security account


By Mary Beth Franklin

Several InvestmentNews readers have asked me to weigh in on whether the recent Equifax data breach, which affected an estimated 143 million Americans, could compromise online Social Security accounts.Equifax, one of the three major credit bureaus, announced in September that it had experienced a major data breach last summer involving Social Security numbers, birth dates, addresses and in some cases driver's licenses and credit card numbers, for about half of all American adults.The pilfered information is the perfect recipe for committing identity fraud. In theory, hackers could use this sensitive personal information to set up an online Social Security account in your name, file for those benefits when you became eligible and direct the payments to a new address and bank account without your knowledge.The bigger question is, can they use that same information to gain access to the millions of existing My Social Security accounts and... Read full post

Oct 23, 2017, 12:28 PM EST

How to take the Medi-scare out of retiree healthcare costs


By Mary Beth Franklin

I don't think it's a coincidence that Halloween and Medicare open enrollment season occur at about the same time each year. Although some people like to celebrate Halloween by dressing up as ghosts and zombies, for seniors, no costumes are needed to trigger goosebumps. Health care costs — especially paying for prescription drugs — is one of the scariest parts of retirement.A majority of Americans cite healthcare costs as the leading obstacle to financial security in retirement, according to new data from Northwestern Mutual's 2017 Planning & Progress Study. The number of Americans citing healthcare costs as their chief concern spiked dramatically this year from 45% in 2016 to 58% is 2017, according to Northwestern Mutual's annual survey of more than 2,700 American adults.Separately, four out of five seniors say they would have trouble paying for their drugs without the Medicare prescription drug plan known as Medicare... Read full post

Oct 9, 2017, 9:17 AM EST

Medicare rules are needlessly complex

Stethoscope and Charts

By Mary Beth Franklin

People who collect Social Security benefits early are automatically enrolled in Medicare when they turn 65. But as increasing numbers of Americans delay claiming Social Security benefits until older ages when they are worth more, many of them are missing crucial Medicare enrollment deadlines and facing lifelong penalties.It doesn't have to be that way. Better notification and a simplified enrollment process could alleviate these problems.Generally, Americans must enroll in Medicare during the seven-month initial enrollment period that begins three months before their 65th birthday, includes their birthday month and continues three months after their birthday.They can enroll in both Medicare Part A, which is free and covers hospital costs, and Medicare Part B, which carries a monthly premium and covers doctors' visits and outpatient services. They may also want to sign up for a Medicare Part D prescription drug plan and a supplemental... Read full post

Sep 26, 2017, 3:04 PM EST

Seniors scramble to beat reverse mortgage deadline

Home main

By Mary Beth Franklin

I received a frantic phone call from a reverse mortgage lender in California last week. He said he was worried about the large number of senior homeowners who were scrambling to qualify for a reverse mortgage before new, more restrictive lender limits take effect on October 2, 2017.The problem is, prospective reverse mortgage borrowers must complete a mandatory counseling session, usually by phone, before they can apply for a loan that allows homeowners age 62 or older to tap some of the equity in their home. But, apparently, there are not enough counselors approved by the Department of Housing and Urban Development (HUD) to satisfy the recent spike in demand."Our phones are ringing off the hook right now with people scrambling to find a counseling company to get their FHA (Federal Housing Administration) certificate," said Roy McGovern, founder and chief loan officer of Roy's Umbrella in Fair Oaks, CA. "It is extremely frustrating... Read full post

Sep 21, 2017, 2:07 PM EST

Demand for Social Security advice growing


By Mary Beth Franklin

Less than 20% of older Americans work with a financial adviser who provides guidance on when to claim Social Security benefits. Despite the low incidence of this type of holistic financial advice, it marks an improvement from recent years, according to a new survey of Americans age 50 or older by the Nationwide Retirement Institute.Among future retirees who are currently working with an adviser, 58% said their adviser provided guidance on Social Security benefits compared to 38% of recent retirees and about a third of clients who had been retired 10 years or more. But in about half of the cases, it was the client—not the adviser—who initiated the discussion about how and when to claim Social Security benefits.Despite the apparent reluctance among some financial advisers to offer Social Security guidance, it seems to be an increasing priority for clients. Nearly 80% of future retirees who work with a financial adviser said ... Read full post

Sep 15, 2017, 6:01 PM EST

Social Security COLA could get wiped out by Medicare costs


By Mary Beth Franklin

Consider this perverse scenario. Next year, typical retirees could see their expected Social Security cost-of-living adjustment for 2018 virtually wiped out by a big jump in Medicare premiums, but premiums for many higher-income clients could remain the same as 2017.Blame this potentially bizarre situation on the "hold harmless" provision that is designed to protect most retirees from a net decline in Social Security benefits from one year to the next. Although it is still more than a month away from the official 2018 COLA announcement, the latest Consumer Price Index (CPI) for August suggests that Social Security benefits could increase by about 1.8% next year, according to Mary Johnson, senior policy analyst at The Senior Citizens League, an advocacy group for older Americans. 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... Read full post

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