Page 44 - Investment Advisor May 2021

Conclusions

RETIREMENT PLANNING
By Jane Wollman Rusoff

The Biggest Social Security Claiming

Mistakes Women Make

Widows, stay-at-home parents and divorced spouses can be in for some
big shocks, says retirement expert and advisor Marcia Mantell.

What’s the scoop on taxing Social
Security benefits?
Not only do women not know those are
taxed, but neither does our industry. …
The income thresholds are very low, so
most clients end up paying tax on at least
some of those benefits. Benefits are taxed
at the ordinary income tax rate. This [cal-
culation] requires use of a [retirement]
worksheet found in [IRS] Publication 915.

What’s a common mistake women make
about Social Security taxes?
arcia Mantell, retirement Wrong-way thinking about Social Not having any withholding tax [taken
income expert, relishes get- Security is particularly common among out] of their benefit each month to go
Mting in the weeds of Social both widows and women who have had toward their tax liability. You can volun-
Security rules and regs, where she learned what Mantell calls “popcorn careers”: tarily choose to do that.
long ago that “nothing is a straight line.” They pop in and out of the labor force
She unpacks the biggest pitfalls that trip over decades. If she’s widowed, how is a woman’s tax
up women when they claim benefits, in While these tricky situations are more liability impacted?
this interview with Investment Advisor. common among women, some male When a wealthier woman becomes a
Author of “What’s the Deal With Social clients who may be stay-at-home dads widow, her tax bracket can increase sub-
Security for Women” (Rethink Press- and earn significantly less than their stantially — she can jump up two, three or
2019), she founded Mantell Retirement wives or find themselves widowed, are more IRMAA brackets [Income Related
Consulting in 2005 after spending more thus at risk for the same missteps. And Monthly Adjusted Amount]. It’s shock-
than 13 years in retirement product mar- same-sex couples are subject to identical ing! A widow’s tax rate may well go up
keting at Fidelity Investments. Social Security rules, Mantell points out. significantly in the year after her husband
Here she reveals big mistakes Mantell holds the Retirement dies because she will now be filing taxes
women make about Social Security Management Advisor designation and as an individual and no longer jointly.
when they claim — or fail to claim — speaks on behalf of the new Elder
benefits. Mantell argues that advisors Planning Specialist training program at What’s a big mistake regarding taxes
have alot to learn about Social Security Salem State University. and Medicare? Adobe Stock
nitty-gritty, too. Here are excerpts from our interview: Advisors fail to understand that

42 INVESTMENT ADVISOR MAY 2021 | ThinkAdvisor.com