Results for "On Retirement"

Jan 23, 2019, 5:13 PM EST

Readers weigh in on annuity buyout offer

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By Mary Beth Franklin

As a nation, we have become accustomed to divided politics. As a financial planning community, we have our own version of contentious issues, and one of those hot-button issues involves variable annuities.When I asked InvestmentNews readers to weigh in on whether I should accept or reject a recent buyout offer for my annuity contract from Ohio National, the reaction was swift and vociferous. You would have thought I shouted "Build the wall" at a Democratic fundraiser! I feel as if I am facing my own personal Brexit moment: Should I stay or should I leave?Several readers expressed thanks to me for sharing the details of the company's buyout offer as a way to sink their teeth into a real-life case study. I am equally grateful to the scores of readers who posted their recommendations in the comments section following the original article or emailed me directly with their detailed analyses.The recommendations ranged from "retain the... Read full post

Jan 21, 2019, 7:00 AM EST

My Medicare year

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By Mary Beth Franklin

I turned 64 last December. That means I am eligible to enroll in Medicare at the end of this year. Based on the inquiries I have received from friends and InvestmentNews readers, the Medicare enrollment process is filled with angst. But with a little preparation and help from online tools — and sometimes professional advisers — this critical step in the retirement journey can be accomplished with minimum of pain.While the traditional retirement age of 65 is still a key milestone for Medicare eligibility, the full retirement age for Social Security benefits is 66 or older, depending on birth year. The decoupling of the eligibility ages for these two essential retirement programs — and the fact that many people continue to work beyond traditional retirement age — complicates Medicare enrollment decisions.The year before turning 65 is a good time to review your Medicare options. The first question you need to... Read full post

Jan 14, 2019, 3:24 PM EST

Anatomy of an annuity buyout offer

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By Mary Beth Franklin

I may be going out on a limb, but after receiving numerous negative comments about my decision to purchase a deferred variable annuity from Ohio National Insurance Co. a decade ago, I am laying out the specifics of the company's recent buyout offer and invite readers to offer their opinion on whether I should accept it before the Feb. 11 deadline. Think of it as a case study of a client in the retirement red zone, that period starting about five years before retirement when potential market downturns can wreak havoc on future withdrawal strategies by reducing the size of a nest egg before distributions begin. During last year's InvestmentNews Retirement Income Summit, David Blanchett, Morningstar's head of retirement research, cautioned financial advisers that they should assume low investment returns for the near future, with the strong possibility of some negative returns. Mr. Blanchett warned that declining markets could put those... Read full post

Jan 2, 2019, 3:36 PM EST

Social Security and gray divorce

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By Mary Beth Franklin

Over the holidays, a financial adviser contacted me with questions about how to help one of his newly divorced clients, a classic example of the growing trend of gray divorce, which occurs when a long-time marriage dissolves in or near retirement. The adviser was certain that the former wife, who is collecting a Social Security benefit worth less than half of her ex-husband's benefit amount based on their joint claiming strategy, would receive some sort of increase to equalize their benefits after the divorce. He was sorely disappointed.Both former spouses were born in 1950, which means they had access to a Social Security claiming strategy no longer available to people born after that date. The husband filed and suspended his Social Security benefit when he turned 66, a few months before the April 29, 2016, deadline that eliminated the strategy forever. It allowed him to trigger spousal benefits for his wife while his own retirement... Read full post

Nov 30, 2018, 5:45 PM EST

Anger over Ohio National's attack on VA contracts

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By Mary Beth Franklin

I am angry and appalled by Ohio National Financial Services' announcement that it will terminate the trailing commissions on existing variable annuity contracts with guaranteed income benefits. Talk about changing the rules in the middle of the game!As the owner of one of these annuity contracts with a valuable guaranteed minimum income benefit, or GMIB, that offers a stream of income for life, I can keep my existing contract or accept the company's buyout offer. Ohio National is offering me more money than the existing cash value of my contract, but less than the guaranteed benefit amount — which grows by at least 6% per year — on which my future withdrawals would be based.The buyout offer, available through Feb. 11, encourages me to "work with a trusted financial professional to evaluate your retirement plan and retirement income needs to determine if this offer is right for you." The only problem is that Ohio National... Read full post

Nov 1, 2018, 4:18 PM EST

Future retirees focus on taxes

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By Mary Beth Franklin

In the past, retirees relied on their accountants for tax advice. But future retirees increasingly are looking to their financial advisers for guidance on how to maximize their spendable retirement income by minimizing their taxes, according to a new survey released Thursday by the Nationwide Retirement Institute.Over half of future retirees surveyed said they wished they better understood how their income in retirement will be taxed, according to an online study of U.S. adults age 50 or older. One-third of the respondents were characterized as affluent future retirees who have investible assets of $150,000 or more and who plan on retiring in the next 10 years."Building tax flexibility into a retirement income plan is crucial," said Eric Henderson, president of Nationwide's life insurance business. "Doing so allows you to use different types of investments and retirement accounts — taxable, tax-deferred and tax-free — to... Read full post

Oct 31, 2018, 5:07 PM EST

Near-retirees get a Halloween scare

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By Mary Beth Franklin

Who needs to watch reruns of "Friday the 13th" horror movies for cheap Halloween thrills? A quick glance at the financial news, including the heart-stopping 900-point swing in the Dow Jones Industrial Average in intraday trading Monday, is enough to make the average investor shriek. Focus on those 401(k) owners within striking distance of retirement, and the scene looks more like a cameo from the "Walking Dead."This year marks the 40th anniversary of the legislation that paved the way for 401(k) plans, and the first generation of workers who spent their careers saving in personalized accounts are on the verge of retirement. Unfortunately, extreme stock market volatility, even by traditionally spooky October standards, and historically low bond yields mean those who retire in the next few months or years could face some scary financial times.Market performance in the first few years of retirement determines financial security throughout ... Read full post

Oct 15, 2018, 9:27 AM EST

Social Security and the fear of missing out

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By Mary Beth Franklin

Fear of missing out, or FOMO, is generally associated with millennials who worry that something exciting is happening elsewhere when they're not there. But baby boomers are not immune from FOMO — a word officially added to the Oxford Dictionary in 2013 — when it comes to collecting Social Security benefits. Many think they should be getting a bigger benefit.Just this week I fielded questions about three different scenarios including a widow, a disabled worker and an aspiring early retiree. Each thought they deserved more from Social Security and in each case, they were wrong. Perhaps this is the dark side of advising clients about how to maximize their Social Security benefits. It leaves them hungry for more. Here are some guidelines to help set them straight.Social Security was designed to replace some lost earnings when a worker retires or can no longer work as a result of illness or injury and to help eligible family... Read full post

Sep 19, 2018, 3:44 PM EST

Determining if a message from Social Security is a scam

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By Mary Beth Franklin

A financial adviser contacted me recently to ask if the email he received from the Social Security Administration reminding him to review his estimated benefits statement online was valid."Does Social Security send out these types of emails, or is it a scam?" he asked. Coincidently, I received a similar email this week reminding me to review my online statement to ensure that my earnings record is correct and to see my latest benefits estimate.We can all breathe easier. The Social Security email is valid, and it's an excellent idea to review your benefits statement at least once a year. While it is your employer's responsibility to report your earnings each year, it is up to you to make sure they are accurate. If your earnings record is wrong, it could affect your future benefits.But the Federal Trade Commission recently​ issued a warning to ignore phone calls from official-sounding callers who tell you your Social Security... Read full post

Sep 14, 2018, 9:19 AM EST

2019 Social Security cost-of-living adjustment now expected to be 2.8 percent

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By Mary Beth Franklin

Update: Social Security COLA for 2019 announced; will be 2.8 percent​ It looks like Social Security benefits will increase by about 2.8% in 2019. Although that's down slightly from an earlier estimate, it still would be the largest benefit boost in seven years, according to The Senior Citizens League, a nonpartisan advocacy group representing more than 1 million retirees. Previously, the organization had projected a 3% increase in Social Security benefits next year.The Social Security Administration will issue its official announcement of the 2019 cost-of-living adjustment, or COLA, in October following the Oct. 11 release of the consumer price index data for August. Social Security COLAs are based on the increase in the CPI-W, which measures price inflation for urban workers, in the third quarter (July, August and September) of the current year from the corresponding third quarter of the prior year. In July, the CPI-W... Read full post

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