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Saving for a Retirement Goal
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…
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Having Your Cake and Eating It Too
Good to Know “She cannot eat her cake and have her cake.” Jonathan Swift, Polite Conversation 1738 What does this quote from almost 3 centuries ago have to do with Medicaid eligibility? Conventional wisdom tells us that no one can qualify for nursing home care under Medicaid insurance and simultaneously have assets or income in…
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Owner of a Grantor Trust
In which of the following situations would the grantor of a trust not be considered the owner? The grantor has a reversionary interest in the trust, of which the grantor’s son is the sole beneficiary, but the grantor cannot exercise this power until eight years after transfer of property to the trust. The grantor retains…
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CFP Board Certification Marks Usage Updated
CFP® Board Updates Say goodbye to the TM after CERTIFIED FINANCIAL PLANNER. It’s now an ®. The U.S. Patent and Trademark Office officially registered the CERTIFIED FINANCIAL PLANNER® mark earlier this summer, strengthening the legal protections. This change signifies a great achievement for the CFP Board and Professionals alike. It means the mark is now…
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Net Unrealized Appreciation
Course: Retirement PlanningLesson 7: Income Distribution Planning for Qualified Plans Student Question: Regarding net unrealized appreciation, the value of company shares at the time of distribution would be considered the client’s cost basis in that any earnings in excess of that amount could be subject to short-term cap gains if sold within a year of…
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Characteristics of a Will
Which of the following statements concerning a Will are correct? A will can be altered, amended, or completely rewritten at any time before a person’s death. A will cannot be rewritten but can be amended at any time by a codicil. A will must be signed by the maker and usually must be witnessed by…
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Retirement—Hope Is Not A Plan
Good to Know Just two of every ten workers are very confident about having a financially comfortable retirement, according to the EBRI® 34th Annual Retirement Confidence Survey. What is driving this lack of confidence? Factors include inflation fears, Social Security concerns, and a recession threat. Inflation-More than 8 of every 10 workers believe that just paying…
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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:…
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CFP® Practice Question: Gift and Generation Skipping Transfer Taxes
Austin, an unmarried man, has one son named Perry. Perry has one daughter named Kayla. Austin made no prior year taxable gifts but made two taxable gifts in the current year, including: A taxable gift to Perry in the amount of the current year basic exclusion amount on January 1 and A taxable gift to…
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