Results for "On Retirement"

Mar 19, 2019, 10:10 AM EST

Choosing between a retroactive lump sum and a bigger monthly Social Security benefit


By Mary Beth Franklin

Jim Perry, a financial adviser with Edward Jones in Coral Gables, Fla., was surprised to learn that retirees who claim Social Security benefits after their full retirement age are eligible for up to six months of retroactive benefits paid in a lump sum."I had a discussion with a 69-year-old client yesterday who will be taking Social Security when he turns 70 in July," Mr. Perry wrote to me in an email. "He told me about his friend who received a $25,000 lump sum payment from Social Security when he turned 70 a few months ago in exchange for a lower benefit. Is this an option for my client?""Yes, the Social Security Administration will pay up to six months of retroactive benefits in a lump sum for benefits claimed after full retirement age," I responded. "But there are tradeoffs."For every month that an individual postpones claiming Social Security benefits beyond full retirement age up to age 70, they earn an additional 0.66% per month ... Read full post

Feb 26, 2019, 5:28 PM EST

Medicare and the high cost of prescription drugs


By Mary Beth Franklin

Howard Sorkin, a financial adviser in Chicago, is on a mission to educate clients and other advisers about the high cost of prescription drugs for some Medicare beneficiaries. People requiring specialty drugs for cancer, multiple sclerosis, hepatitis and other serious illnesses may be on the hook for thousands of dollars a year. "Even though, as an adviser, I discussed these topics with clients, I never fully understood the true costs of medications under Part D until I was confronted with it myself," Mr. Sorkin wrote to me in an email.Mr. Sorkin was diagnosed with stage 4 nonsmokers lung cancer, including a brain tumor, in November 2016, when he was 68. Fortunately, he has had few symptoms and qualified for a new targeted drug therapy in lieu of chemotherapy. Unfortunately, the drug is very expensive. It retails for about $18,000 per month, although he is able to buy it at a discounted price of about $15,000 per month through his... Read full post

Feb 20, 2019, 2:11 PM EST

2019 is a key year for Social Security


By Mary Beth Franklin

I'd like to try to clear up some confusion about Social Security claiming strategies that was triggered by one of my recent columns.​ In last week's column, I wrote that people who reach their full retirement age of 66 in 2019 are the last group of people eligible to file a restricted claim for spousal benefits, which allows their own retirement benefits to continue to grow by 8% per year up to age 70. This strategy is available to married couples and to eligible divorced spouses who were married at least 10 years, divorced and are currently single.One reader posted in the online comments sections that he was "confused and bothered" by my article. "I'm turning 66 in 2019 and plan to claim spousal benefits when my spouse turns 66 in 2020," the reader wrote. "I was born before the cutoff and she was born after the cutoff," he explained. "Can anyone clarify?"I apologize for the confusion. I did not mean to suggest that 2019 is... Read full post

Feb 11, 2019, 10:57 AM EST

Rules for claiming Social Security at 70


By Mary Beth Franklin

By now, most financial advisers and many consumers realize that delaying Social Security benefits until age 70 can pay off big time. For every year individuals postpone claiming benefits beyond their full retirement age, they earn an extra 8% per year up to age 70.What is less obvious is what one needs to do to claim those maximum benefits. Like so many rules involving Social Security, the answer varies depending on individual circumstances.For someone whose full retirement age is 66, which applies to anyone born from 1943 through 1954, their basic benefit can increase by 32% if they wait until age 70 to claim. The full retirement age for those born from 1955 through 1960 and beyond ranges from 66 and 2 months to 67. Their delayed retirement credits increase by 0.66% per month—totaling 8% per year—for postponing benefits beyond full retirement age up to age 70.At my daily morning exercise class, which is populated mainly... Read full post

Feb 4, 2019, 3:29 PM EST

Don't wait too long to claim Social Security


By Mary Beth Franklin

If delaying Social Security benefits for a few years results in a bigger check, then delaying a little longer should result in an even bigger one, right? Wrong!This is one of the false assumptions I encountered last week during my annual trip out west with a local ski club where the average member is on the verge of retirement, and some are long past it. Once my fellow skiers learned I was the "Social Security lady," many queued up with questions, and I resembled the chair-lift line to the top of the mountain.One man, who admitted his Social Security earnings record was a bit spotty as a result of many years working abroad where he did not pay FICA taxes, figured he would keep working well past age 70 and delay claiming Social Security until he retired. I told him that was a bad idea.For every year you postpone claiming Social Security retirement benefits beyond full retirement age — which in his case is 66 — you earn... Read full post

Jan 23, 2019, 5:13 PM EST

Readers weigh in on annuity buyout offer


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, 3:10 PM EST

My Medicare year


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 a 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 your 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... Read full post

Jan 14, 2019, 3:24 PM EST

Anatomy of an annuity buyout offer


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


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


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

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