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Key Takeaways from the Financial Planning Association’s Annual Conference

I recently attended the Financial Planning Association’s (FPA) annual conference in Boston, which featured some of the best minds in the financial planning field. The speakers and attendees were some of the most innovative folks in the industry who came together over the course of four days to connect and share ideas.

Three key topics at the conference that caught my attention were:

  1. Social Security Benefit Strategies
  2. Education Planning
  3. Financial Services for Millennials

Among the many Social Security Benefit strategies discussed, the most talked about one was the “File and Suspend” strategy, which is very effective for couples. Bankrate.com has a clear explanation of this strategy:

“File-and-suspend allows married taxpayers who retire at different ages to collect optimal benefits. Here's how it works: 

Let's say Jack has reached his full retirement age of 66 but plans to work to 70 in order to collect his delayed retirement credits, which can increase his full benefit amount by 32 percent. Let's also say Jill, his nonworking spouse, just turned 62. He can file for Social Security benefits but request an immediate suspension of his benefits. He won't receive any checks and will continue to accrue delayed retirement credits. 

His wife, however, can now apply for benefits on his record and begin receiving checks at a higher amount than she would have received on her own employment record.” 

By utilizing this strategy, Jill can claim a spousal benefit and Jack can let his or her own retirement benefit continue growing until age 70.

Adults who are single can also take advantage of the File and Suspend strategy as well. Imagine you have reached Full Retirement Age (FRA) and you are intending on claiming benefits once you reach 70 to receive maximum benefits. If you file and suspend, and something comes up at age 68 where you need money, you can elect to receive a lump-sum for the time you delayed, and then simply receive normal benefits going forwards. This strategy allows for increased flexibility and increased total benefits for couples.

Another great topic highlighted during the conference was higher education planning. In this lecture, the speaker shared some great resources to help understand more about the college planning process. Many may be unaware, but the federal government requires most colleges to have a net price calculator on their websites. A net price calculator is essentially a calculator that estimates the “net price” to attend a particular college or university. It is the difference between the full cost to attend a specific college minus any grants or scholarships for which students may be eligible. The calculator will ask an individual about their finances, child’s scores, and other things that may qualify them for financial aid. It then uses those answers to determine how much money the college is likely going to award.

It is often difficult to find the section on a college website, so I would recommend “Googling” the college in question and net price calculator. The speaker also shared with us a great website that reveals how long it takes most students to receive degrees. I was astonished to find that many schools had less than a 20% chance that students would graduate in 4 years – something parents may take for granted! You can learn more about average graduation rates here. The number of years it takes students to complete a degree has significant effects in the planning process so please take a look at the above site.

The last lecture worth mentioning was about financial services for millennials. I found this absolutely fascinating. Millennials have a completely different mindset about life than previous generations. They are used to turning to the Internet for answers and are more concerned about work/life balance than pretty much anything else. This generation is very entrepreneurial and is likely to switch jobs many times over their working careers.

Even though this generation needs financial advice and services, most financial advisors are not catering to this market. The average advisor is over 55 years old and has trouble relating to the needs of millennials. However, this generation is burdened with the highest amounts of student debt in history and very much needs the unbiased advice of a trusted advisor. They need to learn about student loan repayment strategies, how to maximize company benefits, negotiating salary packages, funding education for their children, deciding whether to buy a house or rent an apartment, and so many more difficult financial decisions. Therefore, we are deep at the drawing board building a program where we can assist this generation with the complicated, but significant financial decisions they are facing. Perhaps you know someone who can benefit from this service.

Over the past five years, technology has been revolutionizing the financial industry. About half of the booths at the exhibition hall were technology firms that have built some sort of online platform for our field. There were Customer Relationship Management (CRM) Software vendors, Financial Planning Software vendors, Performance Reporting Software vendors, Social Media Communications vendors, and many more.

Eliot Rose is currently using many of these types of tools to enhance relationships, increase productivity, and boost efficiency. I am proud to say that most of our back-end operations are on the cloud and are supported by the latest and greatest tools in the field.

Jason Siperstein, CFA, CFP

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