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Maximum Employer Contribution to Defined Contribution Plans
Course: Retirement PlanningLesson 2: Qualified Plan Advantages and Disadvantages for Employees and Business Owners Student Question: Hello, If I understand correctly, the maximum an employer can contribute to a defined contribution plan is $58k over the life of the individual’s plan? Austin Instructor Response: Hi Austin, You are directionally correct. The maximum annual employer contribution to a…
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Defined-Benefit Pension Plans – Actuarial Assumptions
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 rate.…
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Anchoring Risk in Client Investing
Good to Know This blog is the first in a series to identify common psychological influences that can lead clients to financial decision errors. We begin this series with a common influence referred to as Anchoring. Anchoring Defined Anchoring is regarded by some as one of the most powerful psychological influences in the human brain.…
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Phantom Stock
Course: Investment PlanningLesson 5: Fundamental Equity Analysis Student Question: Hello, What is the difference between Stock options and Restricted stock plan or phantom stock? Seems confusing. Mary Instructor Response: Hi Mary, Stock options are contracts between employer and an employee that allow the employe to purchase a specific number of employer shares at a specific price after…
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Identifying Monetary Policy
Which of the following is a monetary policy that will tighten the money supply? Sell government securities Lower the discount rate Decrease government spending Increase taxes CLICK TO REVEAL ANSWER Expand A is the answer. Selling government securities is a monetary policy that will tighten the money supply as the cash used to purchase the…
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CFP Board Announces 2021 Virtual Diversity Summit and Career Fair
CFP® Board Updates The CFP® Board will be holding the 2021 Virtual Diversity Summit from November 17 – 19, 2021. The Summit focuses on solutions to advance diversity and inclusion in financial planning. The event will also feature a virtual career fair focused on women and people of color, connecting with employers. The virtual career…
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Maximum Family Benefit
Course: Insurance PlanningLesson 10: Social Security Student Question: Does the maximum family benefit apply to a husband and wife that are both fully insured if the combined total between the two exceeds the maximum family limit? If I understand correctly, the maximum family limit only applies if there are beneficiaries within the family receiving benefits…
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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…
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The “Secret” Social Security Payraise
Good to Know One of the beauties of Social Security Retirement benefits is the cost-of-living adjustment (COLA). The COLA is simply an increase to a covered worker’s benefit to maintain their purchasing power. A covered worker is a worker from whose compensation Social Security taxes have been withheld. The long-term average annual COLA is 2.2%,…
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