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Early Retirees—Alternatives to Medicare, Part II
Good to Know This article is part II of a series to help early retirees make informed healthcare coverage choices for the years before they’re eligible for Medicare. Remember that the first article in this series described how faith-based medical cost-sharing ministries can offer cost-effective coverage for those clients willing to accept behavioral exclusions from…
Loan 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…
Rental Property Like-Kind Exchange
William found someone to buy his rental property in Maine. Which of the following properties William would like to purchase as rental property would allow him to complete a like- kind exchange? A golf course rental property in Arizona that William identified 30 days after selling his Maine property. A beach rental house at the…
401(k) Plans and Same-Sex Couples
CFP® Certificants in the News Financial planning for same-sex couples is as important as planning for opposite-sex couples according to CFP Board. For context, the Supreme Court’s 2015 decision in Obergefell gave same-sex couples the right to marry and, once married, to enjoy the same rights as opposite-sex married couples. However, the new rights generally…
Annual Return and Compounding
Course: Fundamentals of Financial PlanningLesson 5: Using the Calculator Student Question: My question relates to being able to clearly distinguish when the CFP Board exam will require an annual, or other period for the answer.Question 5(b) asks: “What is the rate of return on Investment 2 using daily compounding?” What is the annual rate of…
Various Sources of Income
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…
How Safe is Your Client’s Cash?
CFP® Certificants in the News CFP Board expects certificants to understand “safe haven investments” of cash. A safe haven in this context is an account with a low default risk, as in bank deposits guaranteed by the Federal Deposit Insurance Corporation (FDIC). You may have heard that cash deposited into a federally chartered bank is…
Real Estate Income and IRA Contributions
Course: Retirement PlanningLesson 1: Using IRAs to Build and Distribute More Retirement Income Student Question: This page states that rental income is not included in the definition of earned income. If the client is a professional real estate developer whose income is derived mainly from rental income, would they be able to contribute to an…
Appropriate Valuation Method
Sam McBuck has an estate of $10 million and would like to leave it to his nephews. Sam assumes he will live for at least 5 more years. The property in Sam’s estate currently includes the following assets: An apartment building in downtown New York that Sam owns with three partners, each of whom wants…