How to Present Claiming Decisions to Risk-Averse Clients

Jul 16, 2019 /

It has become standard practice that risk tolerance questionnaires are completed for almost every client during a financial planning or investment planning process. But risk tolerance isn’t just insightful for investing, it could be helpful with Social Security decisions, too. Advisers can use risk tolerance for guidance on how to approach Social Security planning with their clients.

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Social Security Statements May Be Coming Back to Mailboxes

Jul 12, 2019 /

Since 2012, the Social Security Administration has scaled back the mailing of paper statements after it established a website, My Social Security, that offered access to that information online. The agency was able to save on the costs of mailing paper records—in 2018, the total cost was $7.6 million, compared to $24 million in 2016. During those years, the cost per statement was 52 cents. But a new bill, called the Beneficiary Education Tools, Telehealth, and Extenders Reauthorization Act of 2019, or BETTER Act, includes a provision that would reinstate mailed Social Security statements.

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Americans Confident About Retirement, But Reality Differs

Jul 9, 2019 /

Several weeks ago Gallup released the surprising but positive news that fewer people than ever are worried about Social Security. New details show that nonretired Americans’ expectations that they will live comfortably in retirement are more positive than they have been since 2004. However, expected and actual retirement age and income sources differ, suggesting the pre-retirees might be overconfident.

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Only 4% of Beneficiaries Wait Until Age 70 to Claim SS

Jul 5, 2019 /

Social Security now accounts for about one-third of all income annually received by U.S. retirees, amounting to $1 trillion in annual benefits. While impactful, research consistently finds that the financial effect of Social Security could be even greater if more people waited to enroll, since monthly benefits can increase in value if retirees delay claiming. But, we don’t know how much is annually lost from households making the sub-optimal decision about when to claim Social Security, how many are making mistakes, or who is making those wrong decisions. To explore these questions, we utilize new technology invented by United Income and data sponsored by the Social Security Administration:

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Divorce Rate Down, Except for Older Generations

Jul 1, 2019 /

In 2017, around one million couples in the U.S. called it quits. That may sound like a lot of busted unions, but the rate of divorce—just like the rate of marriage—is down. Today, younger married couples are less likely to split up than they once were, driving the trend. But, at the same time, the rate of divorce for older generations has increased in a phenomenon known as “gray” divorce.

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Why So Many Older Americans Rate Their Health as Good or Even Excellent

Jun 28, 2019 /

A common myth about aging is that older adults are burdened by illness and feel lousy much of the time. In fact, the opposite is usually true. Most seniors report feeling distinctly positive about their health, according to data from the 2017 National Health Interview Survey.

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Survey: Seniors Worry About Health and Finances

Jun 24, 2019 /

A survey of U.S. adults aged 60 and older on behalf of the National Council on Aging shows that, unsurprisingly, seniors are especially concerned by health and finance-related matters. Specifically, 56% say they are worried about health care costs exceeding their retirement income and 54% are worried about losing their independence. 48% worry about outliving their savings, 46% about becoming a burden to their family or others, and 43% that prescription drug costs will exceed their retirement income.

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Video Vignettes Improve Social Security Comprehension

Jun 21, 2019 /

There’s an informal rule in journalism: put too many numbers in an article, and readers will drop like flies. A similar phenomenon might also be at work when someone looks at a Social Security statement filled with numbers. In a recent experiment, a friendlier approach proved effective in helping people process this information: tell a story.

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Beware the Social Security Tax Torpedo

Jun 18, 2019 /

For most people, federal income taxes are straightforward during their working years because income is primarily from a paycheck. However, in retirement it can become much more complicated because income may come from multiple sources with different tax characteristics. Even Social Security benefits might be taxed, and the consequences can be complicated.

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Former SSA Commissioners Propose Budget Reforms

Jun 14, 2019 /

A worsening customer service crisis at the Social Security Administration has prompted three of its former commissioners to urge the U.S. Congress to fix the annual budgeting process that has starved the agency of the resources it needs to do its job. A letter calling for administrative budget reforms signed by the former commissioners—two appointed by Democratic presidents, and one by a Republican—was delivered to congressional leadership last week.

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Husbands Ignore Future Widow’s Needs

Jun 11, 2019 / 2 Comments

The amount of money a widow receives from Social Security can mean the difference between comfort and hardship. Husbands have a lot of control over how this will turn out. Each additional year they postpone collecting their own Social Security adds another 7.3% to the amount a future widow will receive every month from the program’s survivor benefit. But husbands can be a stubborn lot.

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Do You Want to Live to 100?

Jun 7, 2019 /

Do you want to live to be 100? Living to 100, once a rarity in the U.S., is on the rise. Centenarians now number around 82,000, up from 50,000 in 2002, according to census figures; those 100-plus are the country’s second-fastest growing age group, just after those 85 and older. In the next decade, the number of centenarians is expected to rise to about 140,000. Researchers think we can live even longer: While average life expectancy for men is 76 and women is 81, the limit of human life is widely set at 122, the reported age of Jeanne Calment, who died in 1997.

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Knowledge of Social Security Woefully Low

Jun 4, 2019 /

As you know, Social Security offers two types of benefits for spouses: spousal and survivor benefits. Ideally, married individuals think about the impact of their Social Security choices on their spouse. However, if people do not fully understand the rules for the spousal and survivor benefits, they may make suboptimal choices, not only about Social Security claiming, but perhaps also about labor and marriage decisions. This paper from the University of Michigan uses new data from the Understanding America Study to assess understanding of these benefits. Overall, the results suggest that knowledge of spousal and survivors benefits is low. Furthermore, people’s perceptions of their knowledge is misaligned with their actual knowledge, with many thinking that they know more about Social Security than they actually do.

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Worry About Social Security Falls to a New Low

May 31, 2019 /

Most of the news about Social Security is usually doom and gloom. Recent financial reports show we’re still on track to run out of money in the reserves within 15 years. So it’s a bit surprising that a recent Gallup poll shows that fewer people than ever are worried about Social Security.

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All You Ever Wanted to Know About the Social Security Earnings Test

May 28, 2019 /

The Social Security rules are extraordinarily complex and create a virtual labyrinth that retirees must successfully navigate to get the most out of the system they have likely been paying into for most of their lives. In particular, the timing of when benefits are claimed can have a significant impact, not only because benefits are adjusted (i.e., reduced) for those who retire “early,” but also because the so-called Social Security Earnings Test applies to anyone who receives Social Security benefits early. Many retirees—and advisors—don’t fully understand how the Earnings Test works. This Nerd’s Eye View post looks at multiple possiblities, with examples.

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COLAs Still Not Enough for Seniors

May 24, 2019 /

No matter how high the government sets next year’s cost-of-living adjustment (COLA) for Social Security recipients, it will fail to offset the declining purchasing power of American seniors. According to a new report from The Senior Citizens League, Social Security recipients have lost 33% of their buying power between 2000 and 2019.

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76% of Pre-Retirees Would Switch Advisors If Not Advised On Social Security

May 21, 2019 /

When it comes to Social Security, there is a lot that America’s workers nearing retirement don’t know. The sixth annual survey from the Nationwide Retirement Institute, conducted online by The Harris Poll among 1,315 U.S. adults ages 50 or older who are retired, or plan to retire in the next 10 years, finds that nearly half (44%) say Social Security will be their main source of retirement income, followed by just 23% of older adults relying on their pension. Here are some of the disturbing facts:

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Nearly 40% of Americans Wish They Had Filed for Social Security Later

May 17, 2019 /

If you can, wait. That’s the advice from today’s to tomorrow’s retirees. In a new survey commissioned with Age Friendly Ventures, the MassMutual Social Security Pulse Check accessed people in their 70s who are “paying it forward” by advising the next generation to defer claiming social security benefits in order to maximize monthly payments.

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American Confidence in Retirement Rises

May 14, 2019 /

The Retirement Confidence Survey gauges the views and attitudes of working-age and retired Americans regarding retirement, their preparations for retirement, their confidence with regard to various aspects of retirement, and related issues. The RCS is the longest-running survey of its kind and is conducted annually by the Employee Benefit Research Institute (EBRI) and the independent research firm Greenwald & Associates. Here are some results from the 2019 survey. You can find more here.

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Will the SECURE Act Actually Bring Security to Older Americans?

May 10, 2019 / 1 Comments

For the 75 million boomers marching into old age and the Generation X cohort that follows, the future looks bleak. One in five working-age Americans has no savings, and another 10% have squirreled away less than $5,000 for retirement. The retirement income crisis has spurred Congress into action; both the House and Senate introduced bills which would provide U.S. workers with expanded opportunities to participate in employer-provided retirement plans. Beltway insiders say the SECURE Act is on track to become law. So, will it provide financial security to boomers and Generation X in their retirement years? The answer is yes and no.

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