The “Secret” Social Security Payraise

Good to Know One of the beauties of Social Security Retirement benefits is the cost-of-living adjustment (COLA). The COLA is simply an increase to a covered worker’s benefit to maintain their purchasing power. A covered worker is a worker from whose compensation Social Security taxes have been withheld. The long-term average annual COLA is 2.2%,…

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Understanding the Relationship Between Coupon Rates and Duration

Course: Investment PlanningLesson 9: Fixed Income Securities Student Question: There is a question regarding duration that I continue to struggle with. Which of the following are true:1-Lower coupon bonds are more sensitive to interest rates than high coupon bonds.2-There is inverse relationship between bond prices and change in interest rates.3-There is a positive relationship between coupon rates and…

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UNHOLY TRILOGY: COVID, REMOTE WORK, and CYBERCRIME

CFP® Certificants in the News “There are only two kinds of financial planning firms: those that have faced a cyberattack and those that will.”  Consulting Firm PwC Business is booming for cybercriminals.  The confluence of COVID and remote working has more than doubled cyberattacks against financial firms.  Moreover, the increased number of attacks is far…

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Crummey Powers

Course: Insurance PlanningLesson 16: The Irrevocable Life Insurance Trust Student Question: Must Crummey powers always be in effect to apply the annual gift tax exclusion in order to transfer to an irrevocable trust? Or is it the case that as long as it was done once, will all transfers be eligible for the annual gift tax exclusion? Michael…

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Calculating Late Filing/Paying Penalties

Course: Income Tax PlanningLesson 1: Introduction to Taxation Student Question: For this question, could you send me the math behind finding the answer?  I want a better understanding of how the penalty was assessed. Thank Andrew Review Exercise: Jerry’s taxes were due April 15th. He filed his return in October of the same year, and…

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Tax-Avoidance On Steroids—Private Placement Life Insurance

Good to Know CFP Board expects a certificant to serve a spectrum of client demographics based upon factors such as age, gender, culture, and net worth.  This blog summarizes a unique income tax strategy for high and ultra-high net worth clients.  Private Placement Life Insurance (PPLI) can help a client: Avoid income tax on investment…

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Passing Property Via Will

Course: Investment PlanningLesson 14: Evaluation Portfolio Performance Student Question: Hello – I’m a little confused about the example (below) discussing an heirloom of only sentimental value. Why would this be titled at all for a will, especially since an earlier lecture said items of no value would pass through will as the situation does not…

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5 Habits of Successful Candidates for CFP® Certification

Good to Know The 5 habits to passing the CFP® exam are not complicated. In fact, they’re quite simple in concept. But here’s the rub, simple is not always easy. For example, here’s the simple equation for losing weight: Calories out > Calories in = Weight loss Yet seven of every ten Americans, the author…

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SEP IRA Contribution Limits

Course: Retirement PlanningLesson 5: Leveraging Nonqualified Plans for Small Business and Not-For-Profit Employees and Owners Student Question: Hello , I am having trouble understanding how Shared Coverage is implemented. Could you help me understand with an example?  Also, could you explain the Waiver of Premium benefits in simple words. Shared Coverage: “For couples where each…

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Speak Now or Forever Hold Your Peace—CFP Board’s Proposed Nondisclosure Sanctions

CFP® Certificants in the News CFP Board’s recent background and disclosure review project resulted in a higher-than-expected number of reviews, investigations, and disciplinary actions taken against CFP® certificants. Solely in the author’s opinion, the scope and depth of the disclosure violations, when coupled with the CFP Board’s strategic goal of utmost public trust, may have…

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