Oct 5, 2015 | Retirement, Social Security
Just 28 percent of Americans received a passing grade (60 percent or higher) when asked basic Social Security questions, a new study from MassMutual finds. Moreover, from a pool of 1,500 respondents ages 18 to 65, just one person answered all 10 true/false questions correctly. The quiz touched on a range of topics, including the national retirement age, spousal benefits and eligibility for benefits. The high failure rate suggests what a number of advisors already know: Too many Americans are lacking the knowledge and tools that will allow their retirement reality to match their retirement dreams. “Perhaps the greatest Social Security deficit in this country is the lack of education around the retirement benefits of the program, which presents an opportunity and responsibility to financial professionals,” said Michael R. Fanning, executive vice president, U.S. Insurance Group, MassMutual. “With millions of Americans nearing retirement each year, many may be at risk of underutilizing a critical component of their retirement income stream.” If there’s a silver lining, it’s self-awareness: Just 8 percent of those surveyed considered themselves to be very knowledgeable on the subject of Social Security. And that’s where you come in. How does your own knowledge stack up? Continue reading for the full quiz. 1. True or False? Social Security retirement benefits are based on my earnings history, so I’ll receive the same monthly benefit amount no matter when I start collecting. A: False. If you collect Social Security retirement benefits before reaching full retirement age, you effectively lock in a lower monthly benefit amount. If you wait to begin collecting until after you reach full retirement age, you become eligible for delayed...
Sep 21, 2015 | Life Insurance, Retirement, Social Security
The Supreme Court ruling legalizing marriage in all states for same-sex couples is a landmark decision in the equal rights arena. However, the ruling also has important financial and tax implications — implications that same-sex clients now need to be advised upon in order to avoid any planning surprises down the road. While the ruling eliminates the patchwork of state-specific rules that could confuse even the most competent financial advisor, it is critical that advisors in all states familiarize themselves with the important planning issues that same-sex couples now need to consider — whether or not they have chosen to marry. Some of the issues are fairly simple and well-settled, but the subtleties and complexities of the rules need to be considered in order for same-sex married couples to make informed planning decisions going forward. Estate and gift tax issues While same-sex spouses now have the same rights as opposite-sex spouses to inherit from one another even in the absence of a will, federal estate tax rules have evolved in recent years to make it easier for married couples to avoid transfer taxes when passing wealth after death. Same-sex clients are now able to take advantage of these special rules. For example, the $5.43 million (in 2015) exemption is portable between spouses if an election is made on a properly-filed estate tax return — meaning that same-sex couples can now count on shielding a combined $10.86 million from estate taxes without worrying about which spouse technically owns the assets. Same-sex married couples should be advised to review their estate planning documents to take into account the fact that these taxpayers are now entitled...
