Blog | Social Security (12)

Social Security

Final budget dramatically changes Social Security claiming options

on November 5, 2015 | By Joe Elsasser, CFP®, Founder and President of Covisum

The 2016 budget makes sweeping changes to Social Security claiming rules for retirees surrounding the Restricted Application and the Voluntary Suspension. Changes to the Restricted Application

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Social Security

Budget bill would dramatically change two Social Security claiming strategies

on November 5, 2015 | By Joe Elsasser, CFP®, Founder and President of Covisum

The proposed 2016 budget makes two highly significant changes to Social Security claiming rules. Section 831(a) eliminates the restricted application strategy by requiring that anyone who files for any benefit be “deemed” as though they are filing for all benefits for which they are eligible. Section 831(b) modifies voluntary suspension by requiring that any benefits for any auxiliary be stopped when the primary wage earner suspends his own benefit. Under prior rules, a voluntary suspension only stopped the checks of the person who suspended their benefits, while auxiliaries such as spouses and children could continue to collect their checks.

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Social Security

Fact sheet shows 2016 Social Security changes

on October 27, 2015 | By Katie Godbout, Vice President of Sales & Marketing

The 2016 Social Security Administration Fact Sheet is now available. Don’t get caught off guard with questions about the maximum taxable earnings limits or the retirement earnings test exempt amounts. Print your copy of the fact sheet and have it readily available to answer your clients’ questions.

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Social Security

Beware of averages

on September 22, 2015 | By David Cechanowicz, JD, MSFS, CLU®, ChFC®

When an individual or a couple decides how and when to claim their Social Security benefits, life expectancy is one of the foundational factors that must be considered. Americans are living longer, and nearly half of them claim their retirement benefits as early as possible. Nearly all of the remainder claim their benefits prior to their full retirement age.

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Social Security

Avoid the estimates on Social Security statements

on September 22, 2015 | By Katie Godbout, Vice President of Sales & Marketing

As you meet with clients and obtain their Social Security statements, there are a few things you should review. First, take a look at the second page of the statement, where it states “We based your benefit estimates on these facts: Your estimated taxable earnings per year after 2015…” If you keep reading, you’ll see that the Social Security Administration is assuming you’ll continue to work and make about the same as you did in 2013 or 2014, all the way until the age of the estimate.

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Social Security

Why claiming strategies are not ‘gaming the system’

on September 22, 2015 | By David Cechanowicz, JD, MSFS, CLU®, ChFC®

Social Security turned 80 this year, and as you might expect, it has generated a lot of press — some good, some bad, and some just off the wall. At times, it may feel like you need storm gear to protect yourself from the barrage.

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Social Security

How do I update my client's annual inflation rate?

on September 3, 2015 | By Katie Godbout, Vice President of Sales & Marketing

In the Social Security Timing software you have an option to use the long-term median or you can enter what you like for the annual inflation rate. Our median is a reflection of what the Trustees report sets as the ultimate long-range average annual growth rate in the CPI-W, which was recently set to 2.7%. Read the full report here. Our software has been updated accordingly.

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In The News

Why the lump sum payment doesn't always maximize benefits

on August 26, 2015 | By Katie Godbout, Vice President of Sales & Marketing

Advisors often ask us about Social Security’s lump sum payment because they’ve read articles mentioning this option. These articles often use an example like this: someone files and suspends at 66 with the goal of waiting until 70 to build delayed retirement credits of 8% each year but then is diagnosed with a terminal illness at 68. The client could then request a lump sum payment to act as though he were receiving a benefit amount as early as when he first suspended. We’ve heard rumblings about using this as a potential tax strategy, potentially creating a year or two of completely tax-free income. These articles fail to mention the risks and how this option doesn’t always help when trying to maximize Social Security. Before you suggest a lump sum payment, keep these factors in mind:

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Social Security

How Good Social Security Planning Can Offset 'Disturbing' Trend Hurting Widows

on July 27, 2015 | By David Cechanowicz, JD, MSFS, CLU®, ChFC®

While researching the impact of male Social Security claiming and poverty rates for widows, I have read article after article that illustrates the need for competent financial advising, especially in the area of Social Security claiming decisions and retirement income planning. There is no shortage of research literature that directly ties the financial futures of many women to the claiming decisions of their husbands. For example, a study commissioned by the Federal Reserve in 2012 concludes the following: Husbands are very responsive to their own benefit incentives, but they are not responsive to the incentives created by dependent benefits.1

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