Bruce Starks, CPA, CFP® – Page 8

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…

National Debt: Fiscal Tsunami or Ripple?

Good to Know This blog article is the first in a three-part series, including: Federal agency perspectives, Private sector perspectives, and Summary comparison. “The growing [national] debt could create additional challenges for federal fiscal management, which could in turn cause challenges for American households and individuals, too. These potential challenges include: Risks to economic growth…

Social Security Retirement Benefits

Course: Insurance PlanningLesson 10: Social Security Student Question: This question (below) doesn’t quite make sense to me. Could you clarify why the correct answer is D? Robin Elizabeth qualifies for a retirement benefit of $250 and a spouse’s benefit of $400. At her full retirement age, she will receive which of the following? Instructor Response: Great…

What You Should Know About CFP Board Discipline

CFP® Certificants in the News CFP Board publishes disciplinary actions that include public censure, suspension, and even permanent revocation of the right to use the CFP® mark. We’ll identify two recent disciplinary actions taken by CFP Board and then make observations. Public Censure Paul, a CFP® certificant from New York, “entered into a Letter of…

No Additional Cost Services Exclusion

Course: Income Tax PlanningLesson 6: Employer-Sponsored Total Income Exclusions Student Question: For “No Additional Cost Services” provided by an employer, which are excluded from employee income, there is the requirement that no significant costs are incurred. How is “significant” cost determined? Significant sounds subjective. Is there a general rule for determining what is considered significant?…

Social Security Bankruptcy—Fear or Fact?

Good to Know Social Security consists of two major benefit programs—disability and retirement/survivorship. We’ll address these programs in just a moment, but first, the author will contrast the crucial difference between Social Security “solvency” and “bankruptcy.” Solvency is the ability to pay 100% of benefits. Bankruptcy is the inability to make any significant benefit payments.…

Maximum Family Benefit

Course: Insurance PlanningLesson 10: Social Security Student Question: Does the maximum family benefit apply to a husband and wife that are both fully insured if the combined total between the two exceeds the maximum family limit? If I understand correctly, the maximum family limit only applies if there are beneficiaries within the family receiving benefits…

Will 401(k) Rollovers Equal Advisors’ Fiduciary Responsibility?

CFP® Certificants in the News The CFP Board’s recent news release opined that “The Department of Labor’s new retirement security rule standard expanding fiduciary duties will likely face legal opposition. Advocates for the rule, including CFP Board, plan to submit amicus briefs in support of the DOL in any lawsuits.” The news release cites an…

Value of Life Insurance in Buy-Sell Agreements

Course: Insurance PlanningLesson 17: Business Uses of Life Insurance Student Question: Do buy sell agreements accounts for projected growth of the company? Do the life insurance benefits increase over time to account for projected growth, or perhaps can they invest and grow conservatively to keep up with inflation (or COLA on the plan)? Instructor Response:…

Fiduciary Rule Rises Again

Good to Know If the term “Department of Labor Fiduciary Rule” sounds familiar, there’s a reason. The DOL’s previous Fiduciary Rule (2016) was a failed regulatory effort that was struck down by the Fifth Circuit Court of Appeals in 2018. The Court held that the DOL exceeded its authority. One perspective of the Court’s ruling…