Results for "On Retirement"

Jul 16, 2019, 1:03 PM EST

Women in two-income households face greatest retirement risk


By Mary Beth Franklin

For years, I've been writing about the retirement challenges that women face as a result of their longer average lifespans, lower lifetime earnings and the fact that most women end up alone as a result of divorce, widowhood or never having married. In fact, it was one of the central themes of the InvestmentNews​ Women Adviser Summit in Boston last week: Single women often face bleaker retirement prospects than their married counterparts.But new research from the Center from Retirement Research turns conventional wisdom on its head.Despite the financial benefits of dual-income households during women's working years, the new CRR study reached a startling conclusion: Married women in their 50s are more at risk for retirement security than any other group of women, including those who are divorced, single, widowed or in one-earner households.These head-scratching results have some logical explanations and demonstrate how... Read full post

Jul 8, 2019, 10:47 AM EST

Why healthy clients need to save more for retirement


By Mary Beth Franklin

Here's a counterintuitive thought: Healthy clients are likely to have higher medical costs in retirement than their less-healthy counterparts. Why? Because they are likely to live longer than average, and health-care costs tend to increase at the end of life.A newly released white paper from HealthView Services, Why Health Needs to Be Part of Retirement Planning, provides new data detailing the projected cost of health care, the impact of health conditions and strategies to plan for, manage and even reduce health-care costs in retirement. HealthView Services, which provides health-care cost data for the financial services industry, bases its retirement health-care projections on 530 million health-care cases, as well as actuarial, government and economic data.The report shows actuarially projected total lifetime health-care costs for an average healthy 65-year-old couple retiring in 2019 will be $387,644 in today's dollars. Total... Read full post

Jun 28, 2019, 3:30 PM EST

Retirees lose $3.4 trillion by claiming Social Security too early


By Mary Beth Franklin

Despite all the talk about the value of maximizing Social Security benefits, it seems few retirees are listening. The fact that only 4% of retirees wait until age 70 to claim their maximum retirement benefits is not news. What is noteworthy, however, is how much those early claiming decisions are costing retirees in terms of potential retirement income and overall wealth.Social Security pays over $1 trillion in benefits to more than 65 million people each year, or about nine out of every 10 retirees. It accounts for about one-third of all retirement income each year. About 50% of current retirees report that more than half of their annual income from Social Security while a third report than more than 90% of their income comes from these benefits.A new study, "The Retirement Solution Hiding in Plain Sight: How Much Retirees Would Gain by Improving Social Security Decisions," quantifies the lifelong impact of workers claiming benefits... Read full post

Jun 28, 2019, 10:56 AM EST

Confusion around Medicare enrollment


By Mary Beth Franklin

Sifting through my inbox, I've noticed an uptick in questions about when and how to enroll in Medicare. The source of most of the confusion relates to clients who continue to work past age 65.Medicare Part A, which is free to most retirees, covers hospitalization. Medicare Part B, which pays for outpatient services, has a monthly premium, currently $135.50 per month for most beneficiaries but more for higher-income retirees. Monthly premiums for Part D prescription drug plans are also tied to income. Most people who choose original Medicare Parts A and B also buy a supplemental Medigap policy. About one-third of Medicare beneficiaries enroll in all-inclusive Medicare Advantage plans, which often provide added benefits and lower overall costs in exchange for using a network of health-care providers."We have a client come in today who will turn 65 in September and is still working full-time," an adviser in Oak Brook, Ill., wrote in an... Read full post

Jun 19, 2019, 1:53 PM EST

How to suspend Social Security benefits


By Mary Beth Franklin

I often counsel readers about the option of suspending their Social Security benefits as a way to increase their future payouts. One reader had a simple question: How could he do it?"I claimed Social Security at 62 and I will turn 66 in December," said Randy of Zanesville, Ohio. "I started to do some projects to generate additional income, so I don't need the money from Social Security, and I would love to suspend my benefits until 70. I just don't know how to go about it." It's a great question with a simple answer.If you are already entitled to benefits like Randy, you may voluntarily suspend retirement benefit payments once you reach full retirement age. You can ask the Social Security Administration either over the phone (800-772-1213) or in writing to suspend your benefits.The suspension would begin the month after you make the request. Social Security benefits are paid the month after they are due. So, for example, if you contact ... Read full post

Jun 12, 2019, 3:06 PM EST

Special Social Security rules for public sector employees


By Mary Beth Franklin

Questions from readers about Social Security rules and strategies seem to come in waves. The latest tsunami involves Social Security rules for public employees, their spouses and survivors — a total of about 2.5 million people.Although participation in Social Security is compulsory for most workers, about 7% of all workers are not covered by Social Security, according to a new report from the Congressional Research Service. Noncovered workers include state and local government employees, such as teachers, police officers and firefighters, in certain states that provide alternative retirement systems, as well as most federal civilian employees hired before 1984. Noncovered workers do not pay FICA taxes on their earnings.There are two separate provisions that can reduce Social Security benefits for public-sector workers and their eligible family members if the worker receives a pension based on earnings from employment not covered ... Read full post

Jun 5, 2019, 1:23 PM EST

Terminal diagnosis affects Social Security timing


By Mary Beth Franklin

I received a heartbreaking email from a reader the other day asking for advice on when he should claim his Social Security benefit given his recent diagnosis of stage 4 lung cancer. He is 61 and no longer working. His wife is 62."[My wife] has worked some, but her full retirement age benefit — or even her delayed benefit at age 70 — would never be equal to her survivor benefit" the reader said. His wife's full retirement age benefit is about $900 per month. His is about $2,500 at his full retirement age of 66 and 8 months.His wife had filed for Social Security benefits on her own earnings record but withdrew her application before receiving any benefits when the couple learned of his terminal diagnosis. The couple had lots of questions about the best way to proceed to maximize the wife's future survivor benefits. They had gotten conflicting information from a variety of sources, including the Social Security... Read full post

May 23, 2019, 1:23 PM EST

Dealing with widows requires empathy and patience


By Mary Beth Franklin

I often write about the need to protect clients from the financial risks of living too long, but last week I was reminded that not everyone is blessed with long life. My husband Mike decided to accompany me on a trip to Chicago last week for my presentation to the annual InvestmentNews Retirement Income Summit. It gave him a chance to visit with two college friends who live there while I connected with InvestmentNews readers from around the country.But things didn't go as planned. He never got to see his friend Jeff, who died the day after we arrived following a massive heart attack. Jeff was 66 and enjoying a well-planned retirement after a successful career. Mike was shocked and heartbroken over the sudden loss of his fraternity brother. My sympathies lay with Jeff's wife Carol, who had no warning that her husband of 42 years would be taken from her in an instant.Ironically, we received the news of Jeff's passing just after I... Read full post

May 8, 2019, 6:01 PM EST

Future retirees often overestimate Social Security benefits


By Mary Beth Franklin

Chalk it up to wishful thinking, or merely misinformation, but many future retirees overestimate how much they are likely to receive from Social Security, according to an annual survey released Wednesday by the Nationwide Retirement Institute. Clients who work with financial advisers are less likely to claim benefits early and tend to receive larger benefits as a result, the sixth annual survey found."Social Security is a complex source of retirement income, often causing a disconnect between what consumers think their benefit will be compared to reality," said Tina Ambrozy, president of sales and distribution at Nationwide. "Preparing for retirement holistically by working with advisers and taking advantage of online tools can help older adults maximize benefits and achieve personal goals."The online survey of more than 1,300 older adults who are retired or who plan to retire in the next 10 years, found that nearly half — 44%... Read full post

May 6, 2019, 3:40 PM EST

Hints about Social Security COLA and Medicare premiums in 2020


By Mary Beth Franklin

Buried in the recent Social Security and Medicare Trustees' Report were some hints about next year's projected cost-of-living adjustments for Social Security benefits and likely increases in Medicare premiums for 2020.The fact that the Medicare Part A hospital insurance trust fund is expected to be depleted in 2026 unless Congress acts before then stole the headlines. But the report also revealed that the basic Medicare Part B premium, which helps pay for doctors' fees and outpatient services, is expected to increase by $8.80 to $144.30 a month in 2020. And more people are likely to pay high-income surcharges, officially known as income-related monthly adjustment amounts, or IRMAA, next year.In 2018, approximately 3.7 million high-income Medicare beneficiaries, defined as individuals with modified adjusted gross income above $85,000 and married copies with combined MAGI over $170,000, paid IRMAA surcharges. Many of those people are... Read full post

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