Student Question

Course: Investment PlanningLesson 11: Fixed Income Investment Strategies Student Question: Good morning! This page in the lesson lists the Laddered Approach and the Barbell Approach as popular passive bond strategies. However, in the reading, on Page 312 (Money Education, 2nd edition), the Laddered Approach and the Barbell Approach are listed as active strategies. Can you help me clarify which is correct? Thanks! Kaitlyn Instructor Response:…

Course: Retirement PlanningLesson 2: Qualified Plan Advantages and Disadvantages for Employees and Business Owners Student Question: I understand below is an example, but it is possible to contribute $20k to a retirement fund like a Roth IRA? I thought the limit was $6k. Example:Acme, Inc. contributed $20,000 to Tarzan Smith’s qualified plan in Year 1. Tarzan will never pay Social Security tax or Medicare tax on the $20,000 employer contribution;…

Course: Insurance PlanningLesson 10: Social Security Student Question: This question (below) doesn’t quite make sense to me. Could you clarify why the correct answer is D? Robin Elizabeth qualifies for a retirement benefit of $250 and a spouse’s benefit of $400. At her full retirement age, she will receive which of the following? Both $250 and $400. The higher of…

Course: Insurance PlanningLesson 6: Commercial Property and Liability Insurance Student Question: Hi Dan – On this review page, the correct answer for Question 2 (below) indicates that insurance will pay only over 97% of replacement cost. However, it says in the chapter that as long as the property is insured for more than 80% of replacement cost, the policy will pay the full cost…

Course: Insurance PlanningLesson 14: Purchasing and Pricing Life Insurance Student Question: The surrender cost index is so confusing in terms of what I need to know. And could you provide a definition for the annuity due factor? Matt Instructor Response: HI Matt,  This can be confusing.  Let’s take a full step back for perspective.  The purpose of the Surrender Cost Index is…

Course: Retirement PlanningLesson 1: Using IRAs to Build and Distribute More Retirement Income Student Question: I am confused about this calculation (question below). If I use 20 years instead of 15 years,  my need is now $90,305 from my own savings. The math makes sense but  the answer does not. If I have an additional 5 years to save, shouldn’t the required out-of-pocket cash be less…

Course: Fundamentals of Financial PlanningLesson 9: CFP Board Regulatory Requirements Student Question: For sub-section iv of Standard A-10(a), I’m a bit confused as to who that applies to. Does this apply to the certificate holder or the client? Will Instructor Response: Hi William- Thank you for the question. In A(10)a-IV, the CFP® certificant must provide this information to the client. Bruce Student Question: I…

Course: Fundamentals of Financial PlanningLesson 4: Managing Cash Flow and Debt Student Question: I’m making sure I understand the means test. If the person is trying to file Section 7 to get rid of debt but the means test shows they can cover their allowable expense, will they be forced to file Section 13 and have to do a repayment plan? It appears the means test is…

Course: Fundamentals of Financial PlanningLesson 5: Using the Calculator Student Question: I am confused as to how to get the correct answer for question number 4. Jackie invests her bonus at the beginning of this calendar year. If she earns 7% compounded monthly, what is the annual equivalent rate? Round your answer to two decimal places. I solve for the future value…

Course: Income Tax PlanningLesson 7: Arriving at Adjusted Gross Income Student Question: Regarding the minimum deductible and maximum out-of-pocket limits for a high deductible health plan, could you explain more clearly “The minimum deductible must be at least $1,400 (single) or $2,800 (family)“. Does that mean, if single, an individual will pay at least $1,400 per doctor visit/procedure, but no more than the maximum out-of-pocket…