Notes From the Fieldby Martin Weil

Archive for the ‘Personal Finance’ Category

November 9, 2015

File and suspend SS couples claiming strategy to be phased out under new laws

For several years now, we (and many colleagues) have recommended an optimal Social Security claiming strategy for married couples where the older spouse “files and suspends” their own SS benefit at full retirement age (“FRA,” currently 66) and the younger spouse files for a spousal, not their own, benefit when they reach their own FRA. This approach allows each spouses’ own benefit to continue to increase for four more years until age 70 at c. 8% p.a., but provides a bonus for up to four years of spousal payments (1/2 the other spouse’s full benefit) to the younger spouse. For couples who do not have a pressing financial need for full benefits at age 66, this strategy has been shown to have the highest expected lifetime return.

No more. On November 2, the President signed into law changes to the regulations which eliminate this strategy forever. Critics in Congress had loudly complained that couples were taking unfair advantage of an unintended loophole in Social Security law changes that Congress enacted in 2000 in order to assist older workers forced to return to the workplace. What Congress giveth, Congress taketh away.

Going forward, the following couples will still be able to employ the strategy:

  • Couples who have already fully employed the strategy (one spouse has filed and suspended, the other claimed spousal benefits) will not be affected.
  • Couples where one spouse has already filed for benefits, or has filed and suspended, will not be affected so long as the other spouse was born in 1953 or before.
  • Any individual who will reach 66 years of age, and files and suspends, prior to April 30, 2016 will maintain the strategy for their spouse (born 1953 or before).

For everyone else:

  • The ability to file and suspend benefits will cease for everyone six months after the law was signed on November 2. Thus, starting May 2016, one spouse will have to fully claim their own benefit before a spouse can claim a spousal benefit.
  • However, either spouse, if born 1953 or before, will still retain the ability to file for spousal benefits and later switch to their own larger benefit at age 70, so long as their partner has filed for their benefit (or filed and suspended by the six month deadline, or about April 30, 2016.)
  • Anyone born after 1953 will have to choose either a spousal or their own benefit at the time of their initial SS claim and will not be able to switch benefits at a later time.
  • Divorced spouses born after 1954 who are not already receiving benefits also will have to choose spousal or their own benefit at the time of filing and will not have the option to switch at a later time.

This is my best grasp of these latest changes to the Social Security claiming regulations, pending any further modifications. For a another write up, see

My prediction: Financial planners are going to be very busy this holiday season revisiting assumptions in their plans for those clients who will be affected by these changes.

July 27, 2015

Millenials and Their Risky Financial Behaviors

20-Something? Know or related to one?  This short article should be required reading for those in college or recently graduated.

Only 58% of students from four-year institutions say they feel prepared to manage their money. Three out of five don’t use budgets. 17% say they don’t even manage their money; their parents do it for them. 16% say they lived paycheck to paycheck, and yet only three-quarters stop spending when their bank account balances were low.

@Michael Kitces

June 14, 2015

Historical Quote of The week

The time to repair the roof is when the sun is shining.

Barry Ritholz cites this John Kennedy quote as the lead-in to his Washington Post article about preparing for a bear market while things are still going great. He advises a thorough review of your finances with an eye towards reducing debts and raising some rainy day cash. Good advice.

May 18, 2015

Quote of the Month

Exiting a long period of zero interest rates is tricky and a bit unsettling, Some of us feel like the informed citizens of Pompeii around 79 AD: we are grateful for the lovely sea views but worry about the volcano in the background.

Ewen Watt, Chief Global Strategist at Blackrock

April 24, 2015

Commonsense Financial Advice for Millennials

Item 1 – “Make a realistic budget”

This is not rocket science, but these guidelines bear repeating.  Great for 20-somethings but they work for just about every age.


March 18, 2015

If the IRS Calls … Hang Up!

I first heard about this scam from my CPA colleague Peter Montgomery who made an amusing tale out of call he received from a woman claiming to be an IRS agent. According to the linked article, this is a very sophisticated operation and thousands of individuals have been duped.

“The IRS doesn’t call people up out of the blue,” says the article and the IRS.

Timothy Camus, a Treasury deputy inspector general for tax administration, explained to the AP, “If someone calls unexpectedly claiming to be from the IRS with aggressive threats if you do not pay immediately, it is a scam artist calling.”

If you do get a call that you suspect to be a scam, hang up the phone right away, and then report the incident at the taxpayer administration hotline (800-366-4484).

February 5, 2015

Bill Gross Has His Own Financial Advisor(s)

The once, and perhaps future, Bond King, Gross has been in the news a lot the past year. This post is not about that. Reportedly worth several billion dollars and as astute a financial manager as they come, Bill Gross has one or more financial advisors to manage his own money. Why?

Most people, even those that are successful in the world of finance and business, get their own financial advisor to keep themselves out of trouble. Intelligent people understand the benefits of having an independent third party there to make sure they don’t make any huge mistakes.

So says Ben Carlson, CFA, in this article on the topic.

My favorite anecdote in the article is the story about Oracle founder and mega-billionaire Larry Ellison, whose own financial advisor pesters him quarterly about diversifying what I presume to be a vast over-concentration in his company’s stock. A man after my own heart, the advisor that is.

December 19, 2014

ABLE Accounts – Congress Agrees on Something

ABLE Accounts, which are tax-advantaged savings accounts for individuals with disabilities and their families, will be created as a result of the passage of the ABLE Act of 2014. Income earned by the accounts would not be taxed. Contributions to the account made by any person (the account beneficiary, family and friends) would not be tax deductible.

For anyone with a disabled family member or loved one, this is a huge step forward.  Envisioned as a variation on 529 college-savings plans, these accounts should make life simpler for those facing the enormous financial challenges of providing for a lifetime of support for a disabled person. The ABLE law specifies these accounts are for those persons with “significant” disabilities and with onset of disability prior to age 26. Annual contributions will be capped at $14,000.

Passed almost unanimously by both houses of Congress, the bill goes to the President for his signature. Look for implementation sometime in 2015.

December 3, 2014

IPOs, Who Are They Good For?

If your model of the stock market is that companies that are building businesses come to the stock market to finance those businesses, your model is wrong. The stock market is where companies that have built businesses go to cash out their shareholders.

The always astute Jason Zweig on why companies really go public. As he says, it is not to raise money to operate, they have already done that by raising private capital. It is to create a market to facilitate insiders and early private investors cashing out their shares by selling into a broader and deeper public market. See this example on Bloomberg about the current financing of Uber.

November 5, 2014

Quote of the Week

My point is not that mass-mediated financial advice is kinda like professional wrestling. My point is that mass-mediated financial advice is EXACTLY like professional wrestling.

That’s Ben Hunt of Epsilon Theory in an essay exposing (as we have often done ourselves) the VAST differences between the objective counsel provided by a true fiduciary advisor and the breathless infotainment masquerading as “advice” one can get on CNBC et al. This fundamental distinction is worth highlighting as often as necessary.

© Copyright 2020 MW Investment Strategy All rights reserved. Site Credts
Site Credits

Site Design
Tracey Lebedovich

Andrea Scheve
Martin Weil

Jim Erickson
Kelvin Geis