Posts by Dan Madden, CFP®
Retirement Funding Calculation
Erika wants $50,000 a year in today’s dollars in retirement. She anticipates retiring in 10 years and living in retirement for 30 years. Erika can earn 7% on her investments and she expects inflation to average 4%. Approximately how much should Erika have saved by the day she retires to meet this goal? $913,000 $983,000…
Read MoreAccelerated Death Benefits
Which of the following individuals would typically qualify for accelerated death benefits under their term life insurance policy? Ida who is expected to die within 7 months from cancer. Jacob who is expected to die within 10 months from AIDS. Kay who is expected to die within 3 months from kidney failure All of the…
Read MoreLoan Impact on Basis in a Modified Endowment Contract
Course: Insurance PlanningLesson 15: Income Taxation of Life Insurance Student Question: 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 income…
Read MoreS Corp and C Corp Gross Income Calculation
A client received an annual salary from his employment of $40,000. He was a 50% owner of both a C corporation and an S corporation. The C corporation had net profits of $20,000, and the S corporation had income of $10,000. Neither corporation made a distribution. The client’s revocable trust had income of $5,000 but…
Read MoreTransfer of Interest in Property Held in Joint Tenancy
Gary Chapelle owns a duplex with his brother in joint tenancy with right of survivorship. Gary would like to pass his interest in the property to his son, Bill, and Gary has provided in his will that his interest in the duplex will pass to Bill. Which of the following statements concerning the transfer of…
Read MoreVanguard Becomes Newest Founding Sponsor of Center for Financial Planning
CFP® Board Updates The CFP Board has announced Vanguard as the newest Founding Sponsor of CFP Board Center for Financial Planning. Having worked with the CFP Board for the past 6 years, Vanguard has been an invaluable support for the goals of the Center. Corporate sponsors like Vanguard form the backbone of opportunities provided by…
Read MoreSolving for Annual Equivalent Rate
Course: Fundamentals of Financial PlanningLesson 5: Using the Calculator Student Question: I am confused as to how to get the correct answer for number 4. Jackie invests her bonus at the beginning of this calendar year. If she earns 7% compounded monthly, what is the annual equivalent rate? Round your answer to two decimal places.…
Read MoreSelecting an Appropriate Trust
Which of the following trusts should Jason establish in his Will to provide for his son Gaven’s living expenses until Gaven reaches age 65 if Gaven is currently a 30-year old unemployed aspiring actor? 2503(b) trust 2503(c) trust Crummey trust Totten trust CLICK TO REVEAL ANSWER Expand A is the answer. The 2503(b) trust would…
Read MoreWho is an Investment Advisor?
Which of the following individuals need to register with the SEC under the Investment Advisers Act of 1940? Adam who retired last year from a big brokerage house but he recently started providing services to 12 clients who live in his neighborhood that he met while out golfing. Belinda who writes weekly investment articles for…
Read MoreSelecting an Appropriate Trust
Which of the following trusts should Jason establish in his Will to provide for his son Gaven’s living expenses until Gaven reaches age 65 if Gaven is currently a 30-year old unemployed aspiring actor? 2503(b) trust 2503(c) trust Crummey trust Totten trust CLICK TO REVEAL ANSWER Expand A is the answer. The 2503(b) trust would…
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