Good morning and happy Tuesday. Before getting things started I’d like to take a moment to announce that today marks 30 years of my wife and I being together. While we will be married 26 years this August, we like to celebrate both anniversaries and the first one, today, takes us back to our senior year of high school. Yep, we’re high school sweethearts and I wouldn’t have traded a single day since. It’s good being lucky.
Anyway, on to business…
There’s a lot on my mind this morning, as is likely true for you, so here are two points of interest. One relates to an update of the Social Security rules and the other deals with information security.
The Social Security Fairness Act of 2023 –
News about this Act has been trickling in over recent weeks since the legislation was only signed into law last month and there’s been a lot going on.
Retroactive to January 2024, the Act repealed the Windfall Elimination Provision and Government Pension Offset that was applied to the Social Security benefits of workers who paid into the system during some of their working years but not during other years because they were participating in a public pension program. This applies to many Federal, state and local government employees, with public school teachers and cops being some of the most common.
Since the late 70’s the WEP and GPO provisions were intended to stave off windfalls being received by retirees (and often their surviving spouses) by getting their full Social Security benefit and their full pension from other employment. These incredibly confusing provisions created retirement planning problems for the worker and the financial planners trying to help them. The fairness of the provisions was also debated for years. Frankly, I can’t recall one time when working with clients that a true windfall seemed to be eliminated by the WEP and GPO.
Regardless, Congress has eliminated the provisions. The change applies to current SSI recipients and those who maybe didn’t bother applying because the WEP and GPO would have taken most or all of their benefit. As always, the details are complicated and the SSA will be the final arbiter of your benefits, so be proactive if this change applies to you.
The SSA’s website says they’re working on implementing these changes and the timeline is unclear. I’d assume there will eventually be a lump sum payment for impacted benefit recipients sometime this year plus increases to monthly benefit payments. Some filers will receive small increases while others will see a substantial increase in their benefits.
Here are a few points taken directly from the link below.
Not necessarily. We know that some press articles have mentioned teachers, firefighters, police officers, and other public employees when discussing the new law. However, only people who receive a pension based on work not covered by Social Security may see benefit increases. Most state and local public employees – about 72 percent – work in Social Security-covered employment where they pay Social Security taxes and are not affected by WEP or GPO. Those individuals will not receive a benefit increase due to the new law.
The most convenient way to apply for retirement or spouses' benefits is online at www.ssa.gov/apply. Please note that the online application continues to collect pension information until we are able to update it; however, we will not offset the benefit.
[The SSA] will take an application by telephone for people who did not previously apply for retirement benefits because of WEP or spouse's or surviving spouse's benefits because of GPO. If you meet these conditions, call 1-800-772-1213 Monday through Friday, from 9:00 a.m. to 6:00 p.m. ET. When the system asks, "How can I help you today?", say "Fairness Act." Then, you'll be asked a few questions. Your answers will help us connect you to a WEP-GPO trained representative to take your claim.
Here's the link I mentioned: https://www.ssa.gov/benefits/retirement/social-security-fairness-act.html?tl=0%2C1%2C2%2C4%2C5%2C11
Information Security –
There’s a ton of news lately about Trump administration officials accessing a variety of personal information stored in government systems. A few people have asked about information security at Schwab and Ridgeview Financial Planning. While we’ve covered this subject previously it’s good to refresh our understanding of how this works in my little corner of the world. (The following details apply to clients who trust me to manage their accounts at Schwab, but the processes are probably similar at your brokerage firm – you can ask them.)
Information Security at Schwab –
Schwab is very conservative when it comes to this topic. This shows up in technology but also in back-office processes because the regulators require it and for a more practical reason mentioned below. They employ two-factor authentication, which is ubiquitous (and sometimes annoying) these days when logging into your accounts. They also offer security enhancements like voice id.
Schwab has a variety of backstops in place to keep a fraudster from making structural account changes, wiring out money, etc, if they actually gain entry to your accounts, which is always possible and why we plan accordingly. Those types of activities have to be signed for, signature verified and then go through an approval process. While this can add time to what should otherwise be a quick request, internal controls like these are absolutely necessary to ensure your information and money are safe.
Beyond that, your information within the Schwab system is private and Schwab will cover losses due to unauthorized activity that it should have been able to catch. Here’s a link with more information about this.
https://www.schwab.com/schwabsafe/security-guarantee
Information Security at Ridgeview –
I keep all of the information I have related to you in an encrypted cloud folder. Each client has their own folder within the HIPAA and SEC-compliant service that I’ve used for over ten years. The file content is encrypted while sitting there and while in transit to you, whenever it needs to be emailed. Additionally, the service encrypts my password so staff at the company can’t access your information either. Basically, it’s as safe as I can reasonably make it.
Our client portal can be two-factor protected (it’s up to you – we can assist in setting this up if you like).
Beyond that, I’m almost always working and personally look at account activity and the variety of alerts I have set up each day. Alerts for money movement, initiating and updating banking instructions, beneficiary updates, and so forth. If I see something I’ll say something. If I get an odd request, I’ll call you to verify. This personal review is an important element, I think, in monitoring for fraudulent activity. I’ve suggested to people that it’s important to review your own account activity (of all your accounts!) at least weekly, but more is better. And you have me doing it nearly every working day, so that’s good.
Additionally, Ridgeview computers are protected by an institutional-grade monitoring system for hard drives and email accounts. This sometimes snags legitimate client emails but also works as intended - my threat monitor chart looks like a mountain range over the course of a typical week – the phishing attempts and fraudulent emails are numerous.
Still, it’s always possible that someone can get into your account so I focus on what the person could actually do. I think the most likely thing would be to create mischief by doing some unauthorized trading or maybe changing your email address. If so, we could have Schwab cancel or reverse those trades and reset your email address. Otherwise, it’s challenging for someone to do something more serious because of Schwab’s internal processes and my personal review.
All that said, let me know if you’re nervous about this sort of thing and we can discuss your specific questions.
Have questions? Ask us. We can help.
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