Bruce Starks, CPA, CFP® – Page 29

How to Correct a Faulty Claiming Age Decision

Good to Know You may find yourself advising clients and prospects that were either misinformed or unaware of the consequences of claiming Social Security benefits too early. A potential, if not common, client angst is the realization that age 62 was NOT a wise claiming age decision. A client could face three unwelcome results from…

Loan Impact on Basis in a Modified Endowment Contract

Course: Insurance PlanningLesson 15: Income Taxation of Life Insurance Student Question: Hello, Can you help me better understand the difference between policy basis in a normal policy and policy basis on a modified endowment contract. From the Coursework: But for MEC purposes, the basis is increased by any portion of loans that were considered taxable…

CFP Board Imposes Public Sanctions On 22 Individuals

CFP® Certificants in the News This blog’s title confirms that it’s not always good to have one’s name in the news. According to CFP Board’s November 22, 2021 release, “Certified Financial Board of Standards, Inc. (CFP Board) announced today public sanctions against 22 current or former CFP® professionals or candidates for CFP® certification, effective immediately…

The 2021 Crystal Ball: Year-End Tax Strategies for Individuals

Good to Know Year-end tax planning for 2021 depends in large part on proposed legislation, such as the “Build Back Better Act.” Without a reliable crystal ball, the ultimate passage of the Act and other legislation is hard to handicap. However, the passage of the Act could hit many upper-middle-income and high-income taxpayers squarely in…

Qualified Plans – Parties in Interest

Course: Retirement PlanningLesson 6: Matching Business Owner Needs to the Right Qualified Plan Student Question: How is “connection to the plan” defined in regards to a “party in interest” when talking about qualified plans? Would a plan participant count as someone with a connection to the plan? From the Coursework: A party in interest is…

HOW TO REDUCE CYBER RISKS IN CLIENT ACCOUNTS

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…

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…

Is the Stretch IRA Dead for Everyone?

Good to Know The answer posed by the blog title is no. That’s good news. The bad news is that only a short list of beneficiaries is eligible for stretch IRA treatment at the death of the original IRA owner. Only an eligible designated beneficiary can stretch distributions from Traditional IRAs where the original owner…

Clarifying Tort Liability

Course: Retirement PlanningLesson 2: Qualified Plan Advantages and Disadvantages for Employees and Business Owners Student Question: Hi, I have a few questions regarding tort liability. Negligence is Tort Liability? Why isn’t it contractual? Are all torts criminal in nature? John Instructor Response: Hi John, Good questions here. See below for my response to each. Yes…

Maximum Employer Contribution to Defined Contribution Plans

Course: Retirement PlanningLesson 2: Qualified Plan Advantages and Disadvantages for Employees and Business Owners Student Question: Hello, If I understand correctly, the maximum an employer can contribute to a defined contribution plan is $58k over the life of the individual’s plan? Austin Instructor Response: Hi Austin, You are directionally correct. The maximum annual employer contribution to a…