Blog
Student Question of the Week: Emergency Fund
Student Question from Sophie LCourse: Fundamentals of Financial Planning Student Question: Hi Dan, The adequate amount for an Emergency Fund is 3 months for married clients who both have substantial and reliable income. What is the generally accepted level, if any, for “substantial income”? In Question 3, I considered that $60,000 per spouse was not…
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Bipartisan Solutions for America’s Broken Tax Code
Congressman Dave Camp (R-MI), Chairman of the powerful Ways and Means Committee, recently released draft legislation dubbed The Tax Reform Act of 2014 (TRA 2014). TRA 2014 aims at job growth, a simpler and fairer tax code, and putting more hard-earned income back into the hands of taxpayers. Laudable goals all, but the bigger news…
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Student Question of the Week: Ownership of EE Bonds
Student Question from Pam FCourse: Fundamentals of Financial Planning Student Question: Hello, My question deals with a situation where a grandparent buys EE bonds for a grandchild and both the grandparent’s name and the grandchild’s name are listed as owners on the bonds. In that situation, would the bonds be counted as the child’s asset…
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Student Question of the Week: Entering Negative Numbers
Student: Question from Natalie PCourse: Fundamentals of Financial Planning Student Question: Hello, What is the general rule for using a negative number when entering payments? I am calculating the second problem on this web page and am having trouble determining why I need to use a negative when entering payments. Thanks so much! Charles has…
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Secrets of the Roth IRA
It would be a mistake to consider the Roth IRA (or Designated Roth account) merely for the income tax-free qualified distributions. There’s more, much more, to the Roth and we’ll reveal a condensed thumbnail of just three commonly overlooked benefits. 1) Minimize the 3.8% Net Investment Income Tax (NIIT) Because the NIIT is based in…
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Student Question of the Week: 3.8% Medicare Surtax
Student Question from Leslie GCourse: Fundamentals of Insurance Planning Student Question: Hi Dan, I’m confused on how I would know whether or not to apply the 3.8% Medicare surtax in the following CFP Board released question. How can I know without knowing their AGI? Your client’s federal marginal tax rate is 35% and the state…
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Student Question of the Week: Isn’t an IRA a Qualified Plan?
Student Question: Hi Dan! I think I’m confused on my terminology. I always thought non-qualified plans were: SERP’s, Executive Deferred Comp., 457 Plans, etc. But in Lesson 1 of the Retirement Planning section, I see that IRA’s, SEP’s, 403(b)’s are considered “non-qualified plans.” Am I mixed up about this? Instructor Response: Hi Margie! I hope…
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Student Question of the Week: FDIC versus SIPC
Student Question from Leslie GCourse: Fundamentals of Financial Planning Student Question: I thought that all investments were SIPC covered; however, does that change for an IRA invested in a money market fund or CDs? Thanks! Instructor Response: Hi Leslie! The purpose of the FDIC is solely to provide consumer confidence in our nation’s banking system.…
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CFP® Practice Question: Disadvantages of Universal Life Insurance
Which of the following statements concerning the disadvantages of universal life insurance is (are) correct? (1) The future yield potential for the policy owner is uncertain. (2) The semi-compulsory regular savings feature of conventional whole life insurance is lost. (3) Since the cash value is invested primarily in common stocks and other equities, it is…
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