How Couples Can Max Out Their Social Security Benefits

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I hope you had a wonderful weekend. Today is National Vanilla Pudding Day! There had to be a day to mindlessly eat vanilla pudding and today is the day!

LRPC’s Monday Morning Minute for this week, “How Couples Can Max Out Their Social Security Benefits” (presented below) comes to you courtesy of Charles Schwab & Co. As an independent, objective Registered Investment Advisory firm, Lawton Retirement Plan Consultants, LLC has access to research from many sources. Be assured that I will share enlightening, useful information with you each week.

Bring yourself up-to-date on the recent changes in the law that relate to how couples may claim Social Security benefits. Learn how Schwab suggests couples maximize those benefits.

Have a wonderful week!

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How Couples Can Max Out Their Social Security Benefits

By Carrie Schwab-Pomerantz, Charles Schwab & Co.

Key points

  • While new Social Security rules have eliminated some options for couples, there are still workable strategies to maximize benefits.
  • If you were born before January 1, 1954, you can still use the “restricted application” to file for a spousal benefit.
  • Other strategies for maximizing overall benefits, including spousal and survivor benefits, vary based on relative age and earning records but are worth exploring.

The 2015 Budget Act dramatically shifted the landscape for couples attempting to maximize their Social Security benefits. As you’ve discovered, just when many of us had our plans in place, we’ve been forced to reevaluate. Fortunately, there are some strategies that still work. But before I get into those, let’s review what’s changed.

No more ‘file and suspend’

First, the old ‘file and suspend’ strategy is no longer available to new filers. In the past, one spouse could file for benefits — which allowed the other spouse to file for a spousal benefit — then suspend their own benefit to let it grow. No more. Now when a person suspends their own benefit, they also suspend spousal benefits. This effectively prevents one spouse from collecting benefits on their husband’s or wife’s record while the other spouse holds off in order to accrue delayed retirement credits. It was great while it lasted.

Further restrictions on a ‘restricted application’

The second related, but different, change impacts what is known as a ‘restricted application.’ For many years, this provision allowed a married person to collect a benefit based on their spouse’s work record rather their own record as long as their spouse had already filed. In this way, at Full Retirement Age (66 for those born between 1943 and 1954), a spouse could file for a spousal benefit only (a restricted application) and then switch to their own increased benefit at a later date.

This possibility hasn’t been completely eliminated, but whether or not you can use it depends on your age. If you were born before January 1, 1954, you’re in luck. The provision is still available to you. Anyone younger isn’t eligible.

Couple strategies that still work

So where does this leave us with the new rules? Unfortunately, there’s no one-size-fits-all recommendation. Each couple’s financial situation, birth dates, relative ages, anticipated longevity, and earnings records factor in.

Because of this complexity, it generally makes sense to consult with an advisor who specializes in Social Security benefits before deciding. In the meantime, here are a few guidelines to consider:

  • A primary breadwinner should consider delaying filing to age 70. Assuming good health and the prospect of a long life, this makes sense for two reasons. First, it can eventually add up to a larger lifetime benefit. And second, it will mean an increased benefit for a surviving spouse.
  • It may make sense for the lower earning spouse to file for their own benefit at Full Retirement Age (FRA). The tactics will vary, however, depending on birthdate. Here are a couple of examples:

1. Let’s say, as the lower earner, you file for benefits at your FRA. Since your husband turned 62 before the end of 2015, at his FRA he could file a restricted application for spousal benefits. He could then switch to his own higher benefit at age 70. Plus, since you waited until FRA to file for your own benefit, your benefit could increase if the spousal benefit were higher than your own benefit.

2. If, on the other hand, your husband had not turned 62 by the end of 2015, and wasn’t eligible to file a restricted application, it would still likely make sense for you to wait until at least your FRA to file for your own benefit and your husband to wait until age 70 to file. Your benefit could still increase to a potentially higher spousal benefit of 50% of his FRA benefit.

3. Should your husband pre-decease you, you would receive a higher survivor benefit by his delaying to age 70 in either case.

  • If both partners have equivalent earnings records, it may make sense for both to delay filing until age 70. Provided that both anticipate a long life and can afford to postpone benefits, this would maximize both retirement benefits for themselves and survivor benefits for each other.
  • Married couples with a single income face a different set of issues. Although health and anticipated longevity certainly come into play, it often makes sense for the breadwinner to postpone benefits until age 70. While the couple will forego spousal benefits until the earner files, it will allow for the largest possible retirement and survivor benefits. Other couples, however, may want the earner to file once the spouse reaches FRA, which is when the spousal benefit maxes out (the spouse would need to be at their FRA to be eligible to claim the maximum spousal benefit). In this case, though, they are forfeiting the highest survivor benefit.

No easy answers

While the new law in some ways simplified things, it’s still a complex and important decision. So I can certainly appreciate that many people may take one look at all this and want to run for cover. But I strongly advise every person approaching retirement age to stop and carefully assess their Social Security choices. Timing is important and there are still strategies — especially for couples — that can result in a higher overall benefit. Sit down with your advisor to help you make the best decision based on your situation.

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About LRPC’s Monday Morning Minute

Lawton Retirement Plan Consultants, LLC (LRPC) Monday Morning Minute is crafted to provide decision-makers with important information about the economy, investments and corporate retirement plans in a format that allows a reader to consume the information in less than 60 seconds. As an independent, objective investment adviser, LRPC has access to many sources of research and shares the best and most relevant information with its readers each week.

About Lawton Retirement Plan Consultants, LLC

Lawton Retirement Plan Consultants, LLC is a Milwaukee, Wisconsin-based independent, objective Registered Investment Adviser (RIA) providing investment advisory, fiduciary compliance, employee education, provider management and plan design services to retirement plan sponsors. The firm currently has contracts in place to provide consulting services on more than $400 million in plan assets. For more information, please contact Robert C. Lawton at (414) 828-4015 or bob@lawtonrpc.com or visit the firm’s website at http://www.lawtonrpc.com. Lawton Retirement Plan Consultants, LLC is a Wisconsin Registered Investment Adviser.

Important Disclosures

This information was developed as a general guide to educate plan sponsors and is not intended as authoritative guidance, tax, legal or investment advice. Each plan has unique requirements and you should consult your attorney or tax adviser for guidance on your specific situation. In no way does Lawton Retirement Plan Consultants, LLC assure that, by using the information provided, plan sponsor will be in compliance with ERISA regulations. Investors should carefully consider investment objectives, risks, charges and expenses. The statements in this publication are the opinions and beliefs of the commentator expressed when the commentary was made and are not intended to represent that person’s opinions and beliefs at any other time. The commentary does not necessarily reflect the opinion of Lawton Retirement Plan Consultants, LLC and should not be construed as recommendations or investment advice. Lawton Retirement Plan Consultants, LLC offers no tax, legal or accounting advice and any advice contained herein is not specific to any individual, entity or retirement plan, but rather general in nature and, therefore, should not be relied upon for specific investment situations. Lawton Retirement Plan Consultants, LLC is a Wisconsin Registered Investment Adviser and accepts clients outside of Wisconsin based upon applicable state registration regulations and the “de minimus” exception.

Additional Important Disclosures

The information provided here is for general informational purposes only and is not intended to be a substitute for specific individualized tax, legal or investment planning advice. Where specific advice is necessary or appropriate, consult with a qualified tax advisor, CPA, financial planner or investment manager. 

How To Save For Multiple Financial Goals

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I hope you had a wonderful weekend! Happy May Day!

LRPC’s Monday Morning Minute for this week, “How To Save For Multiple Financial Goals” (presented below) comes to you courtesy of Charles Schwab & Co. As an independent, objective Registered Investment Advisory firm, Lawton Retirement Plan Consultants, LLC has access to research from many sources. Be assured that I will share enlightening, useful information with you each week.

I can hear you thinking, “Bob, I have trouble saving for one financial goal, how can anyone save for multiple goals?” Well, we all have multiple financial goals that we should be saving for. For example, our retirements, college for our kids, a first home, our next car or vacation. Check out below how Schwab thinks we can meet this challenge.

Have a wonderful week!

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How To Save For Multiple Financial Goals

From Charles Schwab & Co.

A comfortable retirement. A new car. A down payment on a house. Paying for a child’s college education. Coming up with a list of future financial goals is generally pretty easy. The bigger challenge is figuring out how you’re going to save for them all.

For most of us, socking a few extra dollars away in a savings account each month may be a good start, but it’s probably not enough, especially if we’re talking about multiple goals. The trick is to think strategically about your goals and come up with a saving and investment plan for each one. A little effort today can help make a big difference down the road.

Here are a few steps you can take as you work toward achieving your goals. [Read more…]

The 7 Most Important Financial Planning Tips

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I hope you had a wonderful weekend! I am guessing that you, like me, have waited all year for Blah, Blah, Blah Day. Well, it’s here! Today is indeed Blah, Blah, Blah Day!

LRPC’s Monday Morning Minute for this week, “The 7 Most Important Financial Planning Tips” (presented below) comes to you courtesy of The Sense. As an independent, objective Registered Investment Advisory firm, Lawton Retirement Plan Consultants, LLC has access to research from many sources. Be assured that I will share enlightening, useful information with you each week.

We all should make sure we address some basic financial planning issues. The post below lays out some of the most important.

Have a wonderful week!

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The 7 Most Important Financial Planning Tips

By The Sense

Many of us have responsibilities for both growing children and aging parents. It’s no wonder that the majority of us haven’t saved much for retirement and lack some important financial basics such as an emergency fund or insurance.

It’s tough, but we need to start making our financial lives, and particularly saving for retirement, a priority. Here’s a list of a few priorities. Like all big projects, we recommend breaking this punch list into parts and tackling one every few months or so. While retirement planning is a focus you’ll note that there are a few priorities you must tackle even before planning your retirement, especially if you have a family that depends on you. [Read more…]

Women And Money: Are You In Control Of Your Finances?

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I hope you had a wonderful weekend! Today is “Encourage a Young Writer Day”.

LRPC’s Monday Morning Minute for this week, “Women And Money: Are You In Control Of Your Finances?” (presented below) comes to you courtesy of Charles Schwab & Co. As an independent, objective Registered Investment Advisory firm, Lawton Retirement Plan Consultants, LLC has access to research from many sources. Be assured that I will share enlightening, useful information with you each week.

As the father of three daughters, I am probably more attuned to women’s issues than most men. However, all of us have a mother, sister or daughter. Think about sharing this Monday Morning Minute with the women in your life who might benefit from some financial guidance.

Have a wonderful week!

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Women And Money: Are You In Control Of Your Finances?

By Carrie Schwab-Pomerantz, Charles Schwab & Co.

Key points

  • For women who haven’t been actively engaged in their finances, it’s time to take action.
  • From retirement planning to investing to developing a comprehensive financial plan, working with an advisor is one of the best ways to get started and stay motivated.
  • By taking charge of your finances, you’re also taking charge of your life.

[Read more…]

How To Protect Your Finances In Uncertain Times

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I hope you had a wonderful weekend! Are you going to watch the NCAA championship basketball game tonight?

LRPC’s Monday Morning Minute for this week, “How To Protect Your Finances In Uncertain Times” (presented below) comes to you courtesy of Charles Schwab & Co. As an independent, objective Registered Investment Advisory firm, Lawton Retirement Plan Consultants, LLC has access to research from many sources. Be assured that I will share enlightening, useful information with you each week.

We always seem to be living in uncertain financial times. Take a look at the suggestions provided by the folks at Charles Schwab below to protect your finances.

Have a wonderful week!

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How To Protect Your Finances In Uncertain Times

By Carrie Schwab-Pomerantz, Charles Schwab & Co.

Key points

  • Apprehension about how political and economic changes may affect your wallet is understandable.
  • In times of uncertainty, you can prepare yourself by sticking to some time-tested basics of money management.
  • Here are some practical things you can do to not only protect your money but also to help it grow.

[Read more…]

Should You Pay Off Your Mortgage Early?

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I hope you had a wonderful weekend! Welcome to March Madness!

LRPC’s Monday Morning Minute for this week, “Should You Pay Off Your Mortgage Early?” (presented below) comes to you courtesy of Charles Schwab & Co. As an independent, objective Registered Investment Advisory firm, Lawton Retirement Plan Consultants, LLC has access to research from many sources. Be assured that I will share enlightening, useful information with you each week.

Many of you may have thought about this issue and wondered about the right course of action. Schwab provides some helpful insights below.

Have a wonderful week!

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Should You Pay Off Your Mortgage Early?

From Charles Schwab & Co.

Some people enjoy the peace of mind that comes with being debt-free in retirement. But warm and fuzzy feelings should be weighed against solid financial facts. Whether it makes sense to pay off your mortgage when — or before — you retire depends on your individual situation.

The interest rate on your mortgage may be the single biggest factor in this decision, according to Rande Spiegelman, vice president of financial planning at the Schwab Center for Financial Research. “If the rate on the mortgage is low, an early mortgage payoff might not be the best option,” he says. “It may be better to maintain liquidity of your funds and diversify your assets.”

Should you pay or stay? Rande says you should consider these factors when deciding whether to retire your mortgage or keep it: [Read more…]

Seven Quick Tips To Set You Up For Financial Success

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I hope you had a wonderful weekend! Happy daylight savings time week!

LRPC’s Monday Morning Minute for this week, “Seven Quick Tips To Set You Up For Financial Success” (presented below) comes to you courtesy of Charles Schwab & Co. As an independent, objective Registered Investment Advisory firm, Lawton Retirement Plan Consultants, LLC has access to research from many sources. Be assured that I will share enlightening, useful information with you each week.

This is a really short piece from Schwab on important items you should consider to make your financial life easier and more successful. I hope at least one of these ideas works for you.

Have a wonderful week!

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Seven Quick Tips To Set You Up For Financial Success

By Carrie Schwab-Pomerantz, Charles Schwab & Co., Inc.

Key points

  • New Year’s resolutions are often abandoned by early January, especially if they’re unrealistic or too general.
  • To make a resolution stick, you really need to have a specific plan of action.
  • When it comes to your financial resolve, try these seven financial tips to help set yourself up for success all year long.

We’re still in the early part of 2017 and do you know what that means? For a lot of us, it means our New Year’s resolutions are already a thing of the past. It isn’t that we’re not committed to positive change. It’s just that often we’re not clear about how to achieve it. Especially if resolutions are general — sure, we all want to lose weight or save more money, but it can be hard to follow through.

So what’s the answer? First, when it comes to your finances, get specific about what you really want to accomplish. For instance, how much do you want to save each month? What bills do you want to pay off first? The second essential part of success is making a plan and then sticking with it. The following financial tips are designed to help make it easy — almost automatic — to stay on track. Basically, these are simple things you can set in motion now that can keep you going in the right direction all year long. [Read more…]

Buffet’s Investing Advice From His 2017 Shareholder Letter

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I hope you had a wonderful weekend! The days are getting longer and the darkness is receding. Warmer weather is just around the corner!

LRPC’s Monday Morning Minute for this week, “Buffett’s Investing Advice From His 2017 Shareholder Letter” (presented below) comes to you courtesy of ThinkAdvisor. As an independent, objective Registered Investment Advisory firm, Lawton Retirement Plan Consultants, LLC has access to research from many sources. Be assured that I will share enlightening, useful information with you each week.

Every year Berkshire Hathaway’s shareholder letter contains insights on investing from Warren Buffet that many eagerly await reading. You may be surprised at some of Mr. Buffet’s thoughts this year outlined below.

Have a wonderful week!

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Buffett’s Investing Advice From His 2017 Shareholder Letter

By Janet Levaux, Editor in Chief, Research Magazine

According to Chairman Warren Buffet, the market value of Berkshire Hathaway’s shares has roared ahead at a compound annual growth rate of 20.8% since 1965 — more than double the S&P 500’s 9.7%. In 2016, Berkshire shares soared 23.4%, beating the S&P’s 12.0% improvement. A year earlier, the shares dropped 12.5%, while the S&P gained 1.4%.

While the information on returns is always welcome by investors and market watchers, it is the Oracle of Omaha’s musings on a variety of topics that are eagerly anticipated. Read on for the top eight nuggets of wisdom gleaned from this year’s 28-page letter to investors: [Read more…]

Top Five Money Habits Of Happy Couples

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I hope you had a wonderful weekend! It was in the 60’s this weekend — I think spring is on the way!

LRPC’s Monday Morning Minute for this week, “Top Five Money Habits Of Happy Couples” (presented below) comes to you courtesy of ThinkAdvisor. As an independent, objective Registered Investment Advisory firm, Lawton Retirement Plan Consultants, LLC has access to research from many sources. Be assured that I will share enlightening, useful information with you each week. This is a short piece I believe everyone can read in less than 60 seconds.

Ever wonder how some couples seem to navigate the money thing so easily? The article below reveals their secret money habits! [Read more…]

Six Keys To Investment Success: T. Rowe’s Brian Rogers Reflects

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I hope you had a wonderful weekend! Remember Valentine’s Day is tomorrow!

LRPC’s Monday Morning Minute for this week, “Six Keys To Investment Success: T. Rowe’s Brian Rogers Reflects” (presented below) comes to you courtesy of ThinkAdvisor. As an independent, objective Registered Investment Advisory firm, Lawton Retirement Plan Consultants, LLC has access to research from many sources. Be assured that I will share enlightening, useful information with you each week. This is a short piece I believe everyone can read in less than 60 seconds.

As his retirement approaches, Brian Rogers, Chairman and CIO at T. Rowe Price, shares his knowledge gained from 35 years working with investments.

Have a wonderful week!

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Six Keys To Investment Success: T. Rowe’s Brian Rogers Reflects

By Emily Zulz, Staff Reporter, ThinkAdvisor

On Brian Rogers’ desk at T. Rowe Price is an engraved cube displaying the reminder, “Doubt everything. Believe nothing.” “And I think those are good things for investors to do,” as well, Rogers said

As the time nears for him to step down from his current roles as chairman and CIO at T. Rowe, Rogers is taking time to reflect on his career. “One thing that really struck me” in 1982 when he joined T. Rowe, he recalled at the event, is how “passive was making increasing inroads into our business.” In addition, he said, “fees were under cyclical pressure in 1982. Fast forward to 2016 and it feels like the same two trends are in place, and will continue.”

Recently, T. Rowe Price announced that Rogers will retire as chairman and CIO on March 31, 2017, after nearly 35 years at the firm. While he will stay on as a non-executive chair, his role as CIO will be taken on by six senior investment executives. Recently, Rogers shared six keys to investment success he’s learned over his career. [Read more…]