Take Financial planning initiative

28 Jun 2015 | Author: | No comments yet »

Gay marriage’s big benefit is Social Security.

Q: I am writing because I may need to make a change in my financial planning. The much-anticipated Supreme Court ruling on same-sex marriage has been decided, with the majority of judges declaring it a constitutionally protected right. While 37 states previously recognized same-sex marriages, today’s ruling means that no state can ban same-sex marriage, or refuse to recognize a marriage performed legally in another state.

For boomers and older generations, the condition of your skin, especially your facial appearance, is a barometer of your overall health and perhaps your life expectancy, scientists say. And as the population ages—by 2020 one in seven people worldwide will be 60 or above—dollars are pouring into research that may eventually link your skin health to your retirement finances. Since the court struck down a key part of the Defense of Marriage Act in 2013, couples who were legally married in a state that recognized their union have been able to file joint federal tax returns and receive other federal benefits. Today’s decision extends that ruling to the rest of the country and affects a host of other financial issues, including Social Security, estate taxes, and retirement planning. Recognition of same-sex marriage in all 50 states will guarantee access to Social Security’s spousal and survivor benefits, which are the most valuable features of the program.

Answer: In order for minor children to qualify for benefits on a grandparent’s record, they must either be adopted, or both of their natural parents must be deceased or disabled. Financial Engines, a large financial advisory firm, ran numbers recently for a hypothetical same-sex couple and found that marriage could be worth $343,000 in additional lifetime benefits. (bit.ly/1CyQo0h) Spouses usually do not have the same lifetime earnings history, and hence their Social Security benefits differ. Those already living in states where gay marriage is legal know that this can be a mixed blessing, because in some cases filing jointly could trigger a higher tax bill.

If this is the case, I believe your two grandchildren qualify to collect child benefits until they are 18 or 19, or if they are still in primary or secondary school, and if your wife qualifies to collect child-in-care spousal benefits until the youngest child reaches age 16. That is why many married couples take advantage of rules that permit a spouse to receive up to half of a living spouse’s benefit if it is larger than his or her own.

Typically, the more disparate a couple’s incomes, the more likely spouses are to benefit from filing jointly, says financial planner Stuart Armstrong II, who married his partner in Massachusetts in 2005. Skin health is also a growing focus for consumer and health care companies, which have come to realize that half of all people over 65 suffer from some kind of skin ailment. But the problem is that life expectancies are ever increasing — to nearly 80, according to the last report from the Centers for Disease Control and Prevention. Nestle, which sees skin care as likely to grow much faster than its core packaged foods business, is spending $350 million this year on dermatology research.

The consumer products giant also recently announced it would open 10 skin care research centers around the world, starting with one in New York later this year. Or, you could wait until after the full retirement age (currently 66) to claim – that gives you a whopping delayed retirement credit of 8 percent for each 12-month period of delay – up until age 70. Social Security has the following statement on its website: It is important to note that any benefits withheld while you continue to work are not “lost”. Estate taxes: Before the DOMA case, same-sex spouses could not transfer property to each other without potentially owing federal gift tax, nor could they inherit assets without paying federal estate tax (if the estate was large enough to trigger the tax). Once you reach [Full Retirement Age] FRA, your monthly benefit will be increased permanently to account for the months in which benefits were withheld.

A crowd funded start-up venture just unveiled Way, a portable and compact wafer-like device that scans your skin using UV index and humidity sensors to detect oils and moisture and analyze overall skin health. The former governor of Louisiana, Huey Long, was elected to the Senate in 1930 and proposed a program entitled, “Share the Wealth.” His idea was to take from the rich and privileged and create a guaranteed income of $5,000 per year for every family (equal to over $69,000 today).

It depends on each person’s situation regarding health, finances, family situation, job status, etc.” Maya Rockymoore, chief executive of Global Policy Solutions, a social change strategy firm, says taking Social Security early for some is a “rational” decision. “People retire for different kinds of reasons,” Rockymoore says. “When people say wait for normal retirement age or 70 so you can get most out of it, they mean maximizing the financial benefit. But even at companies that offered partner benefits, the value of those benefits was treated as taxable income in the policyholder’s paycheck, which will no longer be the case. The second nasty gotcha arises from Social Security’s family benefit maximum, which will limit the total benefits that your grandchildren and wife can receive to somewhere between 50 percent and 87 percent of your full retirement benefit. This saves 1.41 percent a year in fees while putting your money in a fund that has generally been in the top 30 percent of comparable funds over time periods out to 15 years.

By asking a dozen or so questions—including how much you smoke, how briskly you walk and how many cars you own—the website purports to tell you if you will die within the next five years. Willie Schuette, a financial planner for the JL Smith Group in Cleveland, says the primary reason people take benefits early is because they need the money. “People need that income the day they retire from their current job,” he says. “They are in the best shape of their lives,” he says. “There are so many things they can do in their 60s and enjoy that money. Married same-sex partners can now also fund a spousal IRA for a nonworking spouse, and no longer need to worry about losing out on 401(k) benefits even if they weren’t specifically designated as the beneficiary. Default decision making: Same-sex partners who wanted to be sure that they could make health care or financial decisions on the other’s behalf used have to complete legal paperwork granting power of attorney. NCPSSM has been holding Social Security education meetings for same-sex couples around the country. (A list of upcoming events can be found here: bit.ly/1GOHKyF)

The company behind the site, Lapetus Solutions, hopes to market its software to firms that rely heavily on life-expectancy algorithms, such as life insurers and other financial institutions. Davis, the court held in a 5-4 decision, that: “It is too late today for the argument to be heard with tolerance, that in a crisis so extreme, the use of the moneys of the nation to relieve the unemployed and their dependents is a use for any purpose narrower than the promotion of the general welfare.” In short, the court was saying that the depression was so severe and entrenched, that it had to act to promote the general welfare of the nation. Most times, the recommendation to wait till 70 is made because the financial planner industry is trying to maximize client dollars in retirement, he says, but that may not necessarily be the client’s goal. “People always underestimate how long they will live,” she says. “How long did my parents live? Davis, the Supreme Court held that: “The proceeds of both [employee and employer] taxes are to be paid into the Treasury like internal-revenue taxes generally, and are not earmarked in any way.” Because Article 1, Section 8 of the U.S.

This is strikingly similar to the court’s ruling on Obamacare when it stated that the federal government has the power to mandate that all Americans purchase health insurance. Because Social Security is so deeply entrenched and so many retirees depend on it, I believe there is no political party or person that would risk being branded as the “party who stole retirement.” However, I do believe we will see some significant changes in the coming years.

If you can cover most of your food, shelter, clothing, transportation and medical expenses with your pension, very little of your standard of living is at risk when stocks go up and down. While a personalized, scientific mortality forecast might offer a troublesome dose of reality, it would at least help navigate one of the most difficult financial challenges we face: knowing how much money we need to retire.

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