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Actuarial Assumptions in Defined Benefit Pension Plans

By Dan Madden, CFP®

Which of the following statements concerning the various actuarial assumptions used in estimating an employer’s contributions to a Defined Benefit Pension Plan is correct? The higher the assumed rate of investment income, the larger the employer’s assumed contribution rate. The higher the employee turnover or termination rate, the larger should be the employer’s assumed contribution…

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IRS Discount “Coupons” – Flexible Spending Arrangements

By Bruce Starks, CPA, CFP®

Good to Know If your doctor emailed a 35% discount coupon to your inbox, would you take the free money?  Your clients that are under-utilizing Flexible Spending Arrangements to pay medical and child-care costs may be throwing away free money. How? Contributions to the Flexible Spending Arrangements discussed herein are not subject to income, Social…

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No Additional Cost Services Exclusion

By Bruce Starks, CPA, CFP®

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?…

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Assets in the Gross Estate

By Dan Madden, CFP®

Which of the following assets would be included in Martin’s gross estate? Life insurance on Martin’s life purchased one year before he died by the trustee of Martin’s irrevocable life insurance trust. Life insurance on Martin’s life purchased by Martin’s wife two years before he died. Life insurance on Martin’s life purchased three years before…

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The Jackie Robinson of Financial Planning

By Bruce Starks, CPA, CFP®

CFP® Certificants in the News In a recent CFP Board press release, Board Chair Kevin Keller announced that, “As we celebrate Black History Month, I want to recognize LeCount Davis, CFP® for his contributions to the financial planning profession. LeCount was the first African American to earn the CFP® certification, and I am not alone in considering…

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Prepaid Plan Refunds

By Dan Madden, CFP®

Course: Fundamentals of Financial PlanningLesson 6: Educational Savings Techniques Student Question: Good afternoon – What happens if a parent has contributed to a prepaid tuition plan, but the child decides not to attend that school? Also, do contributions pertain to just one school? Or is it any school within that state? Kind regards, Austin Instructor…

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Who is an Investment Advisor?

By Dan Madden, CFP®

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…

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ALERT – IRS Audit Red Flags

By Bruce Starks, CPA, CFP®

Good to Know The “red flag” expression comes to us courtesy of its first use in 1602 to signal the preparation for war. An IRS audit, while not a declaration of war against a taxpayer, can certainly put an unprepared client in the cross hairs of an unpleasant tax conflict. Before unfurling the red flags,…

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Accounting for Inflation

By Bruce Starks, CPA, CFP®

Course: Fundamentals of Financial PlanningLesson 5: Using the Calculator Student Question: Good afternoon.  Can you explain why we didn’t take inflation into consideration for the second calculation in the first problem? Dawn wants to have $25,000 in today’s dollars for a round-the-world cruise when she retires 11 years from now. She assumes she can earn…

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