Category Archives: Sign of the Times

Social Security Alert: Last Call for File-and-Suspend

By Karl Schwartz, CPA, CFP® | Principal, Senior Financial Advisor and 
the OneBite Editorial Staff

Click here for a full recap of the key benefits and changes put into place following the passage of the Bipartisan Budget Act of 2015.

As many of you know, the Bipartisan Budget Act of 2015, signed into law by President Obama last November, impacted several popular Social Security filing strategies, including two that are most commonly used by married couples today: file-and-suspend and restricted application.

Since the signing of the Bipartisan Budget Act, the Social Security Administration (SSA) has provided clarification on several details that were not specifically defined in the initial legislation. Here is a summary of the final details you should know:


Recap: This strategy allows one spouse to file for Social Security benefits at their full retirement age (FRA) and then immediately suspend the collection of the benefits as far out as age 70. One of the key elements of this strategy is that it addresses one of the qualifying factors to allow a spouse to collect a spousal benefit based on their earnings record.

Deadline Approaching: To take advantage of this strategy, you must be 66 and file and suspend your benefits on or before April 29, 2016. The SSA recently announced that it will not process any suspension requests submitted on or after April 30, 2016. However, if you file and suspend before April 30, but your request isn’t processed until April 30 or later, the SSA will still honor your claim — thus, you’ll still be able to take advantage of the strategy (so long as you’re of eligible filing age).

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Understanding the DOL’s Fiduciary Rule

By the OneBite Editorial Staff

It has swept headlines, sparked water-cooler conversations and ignited heated discussions in countless Congressional hearings. If you’ve kept a pulse on the regulatory world over the past few months, chances are you’ve heard about the release of the Department of Labor (DOL)’s fiduciary rule for retirement plan advice. But what, exactly, does the legislation entail? And more importantly, how does it affect retirement plan advisors, plan sponsors and participants?


The Timeline

Though the buzz around the rule has increased over the past year, the legislation is actually six years in the making: it was initially proposed in 2010, but was withdrawn in 2011, following strong industry opposition and resistance from both sides of the aisle.

The DOL went back to the drawing board and reintroduced the proposal for public comment last April. After several attempts by lobbyists, legislators and industry opponents to block the rule (including a failed attempt to attach it to the omnibus spending bill at the close of 2015), the legislation was delivered to the Office of Management and Budget (OMB) for review in January. On April 6, the rule made its official debut to the public.

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Protecting Our Seniors and Their Assets

By Patrick Brault, CPA, CTFA | Principal, Regional Director

Over the past few years, a disturbing trend has come to light regarding our nation’s growing senior population: elder financial abuse and exploitation has become more widespread, with new cases increasing by the day. According to AARP, senior fraud accounts for nearly $3 billion in losses each year — and that number is expected to grow.1 A recent article in The New York Times noted that 10,000 people will turn 65 every day over the next decade, which means more elders will be susceptible to financial abuse in the coming years.2

Unfortunately, the full impact of this epidemic remains largely unknown — one of the greatest concerns for this age group is that most cases of abuse, especially those related to finances, are not reported. Typically, financial losses are related to situations involving physical or mental abuse (or both). And what’s worse is that the perpetrators are often people the senior wouldn’t expect — in fact, many cases of abuse involve “trusted” confidants, such as relatives, friends, advisors and others.

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Top Three Changes on the Tax Front for 2016

By the OneBite Editorial Staff

In one of its final legislative actions at the close of the year, Congress cleared the “Protecting Americans from Tax Hikes” (PATH) Act of 2015, which permanently reinstated a number of popular tax provisions that had lapsed in previous years (you can read more about the bill here).

Beyond the passage of the PATH Act, 2016 will bring a handful of minor changes that you’ll need to keep on your radar for next year. Right now, you’re probably thinking, “That’s great and all, but I’m focused on finalizing my 2015 tax return — I can’t even think a full year ahead.”

Sure, it may sound daunting — but it’s important to remember that tax planning is a year-round process, one that doesn’t halt once your return is signed and filed. The sooner you plan ahead and start the preparation process, the better your chances of achieving greater savings (and avoiding any unwelcome surprises) next year. The first step: schedule a meeting with your advisor to get up-to-speed on the new adjustments and assess whether they’ll affect your tax plan moving forward.


Here’s a quick look at the top changes that will take shape in 2016:

Continue reading Top Three Changes on the Tax Front for 2016

New Legislation You Should Know: 529A ABLE Accounts

By Benjamin Hayes, CFP®, MBA | Principal, Senior Financial Advisor

Late last year, Congress enacted new rules to improve the recently created 529A ABLE account, a tax-advantaged savings account for individuals with disabilities. Before we jump into the new rules, let’s briefly review the key advantages and distinctions of the account itself.

529 New Legislation - Benjamin Hayes_ABLE

A Step Forward for Special Needs Planning

In 2014, Congress passed legislation to expand on the popular 529 plan for college savings, creating the 529A ABLE (or “Achieving a Better Life Experience”) account. The new ABLE account was developed to provide parents the opportunity to save money in a tax-advantaged investment vehicle for children with special needs.

A typical 529 plan allows for tax-free distributions only if the beneficiary uses the funds for qualified education expenses. But if the beneficiary doesn’t have expenses from one of those qualified institutions, any earnings withdrawn from the 529 account are subject to taxes and penalties. For parents of children with special needs, this rule significantly limited the practical use of a typical 529 account.

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By Roger Hewins | President

A sleeper hit movie released several years ago, “Sideways” followed the misadventures of two oddballs who could not have been more different. What was supposed to be a week of golf and good wine — two old college roommates having a nice time before the wedding of one of them — turned into something quite different. Both of them traveled from the heights of ecstasy to the depths of despair (really!), only to end up making some modest progress along their respective life journeys.

And so it goes for us. We couldn’t even sit down to write the year-end letter before the S&P 500 fell on each of the first five trading days of 2016, down 6% overall — the worst first week ever.1 Now, it is close to last August’s low; the Dow is down more than 1,000 points, as well.

So what’s with “Sideways?”

A “sideways market” is one that moves up and down over time, but makes little net progress. Imagine the line chart going up and down and ending up more or less in the middle, back to where it started. Add a little extra volatility, and that’s what we have had on our hands this past year or so. Interesting…the period just before a presidential election is often a time when markets do very well. Certainly not this cycle, not so far — up and down, down and up.

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2015 Through a Long-Term Lens

By Martha Post, CFA | Principal, Chief Investment Officer

Overall, we’ve had a pretty smooth, upward path in the markets since the 2008 financial crisis, but each year brings its share of upsets.  2015 is ending on some uncertain notes with a spate of worrisome headlines, related to this week’s Fed meeting and interest rate hike; the closing of the Third Avenue Focused Credit Fund, an aggressive high-yield bond fund; and the continuing decline in oil prices, to name a few.  Meanwhile, Congress looks to be on the verge of passing tax and spending bills that would keep the government running through next September, after the usual last minute deliberations.

2015 Year in Review Continue reading 2015 Through a Long-Term Lens

The End of Complex Social Security Filing Strategies

By Karl Schwartz, CPA, CFP® | Principal, Senior Financial Advisor and
Ryan McGuire, CFP® | Financial Advisor

Editor’s Note: This article was updated on April 4, 2016, to reflect the Social Security Administration (SSA)’s most recent updates to the rules governing these filing strategies.

Over the past 15 years, a few Social Security filing tactics have gained momentum among married couples reaching retirement age. These strategies are a source of conversation for many clients and were also the focus of Hewins Financial Advisors’ first OneBite™ Webinar, which took place in October 2015. As a firm, Hewins recognizes the importance of Social Security for all working families and is proactively educating its client base about the changing landscape of the program.

The Bipartisan Budget Act of 2015 — signed into law by President Obama on November 2, 2015 — changed two of the most popular Social Security filing strategies for married couples: “file-and-suspend” and “restricted application”.

New Social Security Changes-01

Since the signing of the bill, the Social Security Administration (SSA) has provided clarification on several details that were not specifically defined in the initial legislation. Here is an overview of the main changes you need to know, as well as recent updates to the rules (as of April 2016): 

Continue reading The End of Complex Social Security Filing Strategies

The Curious Case of ETF Illiquidity in Volatile Markets

By Rafia Hasan, CFA, CFP® | Senior Associate Consultant, Investment Committee

Exchange-traded funds, or ETFs, have gained popularity in recent years, amassing close to $2 trillion in assets.1 ETFs come in many shapes and sizes: the plain-vanilla funds are similar to index mutual funds, with the added flexibility of allowing investors to trade throughout the day. Other ETFs follow a more complex strategy — some promise the inverse of an index, while others are leveraged to provide double or triple the return on an index.

Most long-term investors are better served steering clear of the latter — complex ETF strategies that are opaque, speculative and often contain hidden risks. But what about the ETFs that track broadly diversified indices? Do they make sense for the long-term investor?

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When Should You Take Social Security Benefits?

By Thuong Thien, CFP® | Consultant

Do you want to learn more about how you can boost your Social Security benefits? Click here to register for the first installment of our OneBite™ Webinar series.

You have probably seen the word “FICA” on your paychecks — and like many people, you may disregard it. FICA, or the Federal Insurance Contributions Act, actually refers to a tax you pay toward Medicare and Social Security. While it’s important to understand the impact both programs will have on your future, let’s focus on the latter: Social Security.

One of the most common questions I hear from clients is, “When should I start my Social Security benefits?” It’s important to build a framework for your retirement and understand where Social Security fits into your overall financial picture. Here are a few aspects to consider as you start to navigate the process.

When to take Social Security benefits

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