Advisor News Insight

President Trump Signs Coronavirus Stimulus Legislation

“The President signed the CARES Act (Coronavirus Aid, Relief, and Economic Security Act), which is aimed to provide financial relief for the economic downturn caused by the Coronavirus pandemic. The bill will inject $2 trillion into the American economy, and includes a range of tax rebates, expanded unemployment benefits and a variety of business tax-relief provisions designed to bolster individual, family and business finances.”

The CARES Act and its Impact on Retirement Plans

The CARES Act is a very extensive piece of legislation that is meant to provide emergency assistance to large and small distressed businesses, in order to stabilize the U.S. economy that has been hammered by this pandemic. By now, almost everyone has likely heard about provisions of the Act that provide direct payments of $1,200 to individuals, and those that provide employers whose business is fully or partially suspended as a result of COVID-19, with tax credits intended to allow them to keep paying employees on furlough. This bill covers a lot more of those highly publicized provisions. This article will specifically focus on the provisions that directly impact tax-qualified retirement plans.

CARES Act tax provisions aim to stabilize pandemic-ravaged economy

While the focus of the legislation is not tax, a large number of tax provisions are included in the over-600-page bill.

BEST Virtual Super CE

As conferences and local CE meetings have been cancelled due to the concerns surrounding the Coronavirus, BEST has created the solution to help you meet your mandatory CE requirements.

BEST Virtual Super CE Consists of:

• 1-Hour Live Webinar & Electronic Exam
• Provides up to 21 hours of state insurance CE credit and up to
  20 hours of professional designation CE credit

Contact our Business Development Department to
schedule a customized Virtual Super CE.

Toll Free: 1-800-345-5669
Email: BusinessDev@brokered.net

Office Hours:
Monday - Thursday, 8:30 AM - 5:00 PM ET.

Elder Planning

Going It Alone – A Guide for Widows: 5 Steps for Navigating the Financial Challenges

This step-by-step guide from the Women’s Institute for a Secure Retirement will help with navigating the immediate financial challenges and making long-term plans for a widow’s future financial security.

This guide was prepared and distributed by Women’s Institute for a Secure Retirement.

Estate Planning

Heckling Musings 2020 and Estate Planning Current Developments

The 54th Annual Heckling Institute on Estate Planning was held in Orlando on the week of January 13, 2020. This summary includes observations from that seminar, as well as other observations about various current developments and interesting estate planning issues (including planning under the SECURE Act).

This article was written by various authors of Bessemer Trust.

Executive Compensation

GAO Report: Private Pensions: IRS and DOL Should Strengthen Oversight of Executive Retirement Plans

A newly released Government Accountability Office (GAO) report, the GAO reviewed data on the five highest-paid employees at S&P 500 companies and found that 2,300 top executives have more than $13 billion saved in these accounts. The average CEO has about $14 million in their account, with some CEOs contributing more than $200 million each.

Long-Term Care Planning

Care giving and Long-Term Care, for a Loved One:
Lessons Learned

Medicare rules for triggering SNF coverage eligibility are pretty clear, and knowing them can help a patient avoid bankruptcy. One of the Medicare SNF coverage triggers requires an eligible three-day inpatient stay, prescription for SNF “restorative” (not “custodial”) care. There is no “custodial” long-term care insured in any Medicare policy. In other words: The patient must be getting better.

This article was written by Stephen George, Freelance Writer at ThinkAdvisor.

IRA Planning

IRS Individual Retirement Arrangements

The Internal Revenue Service (IRS) has updated two comprehensive publications designed to help anyone making IRA contributions or receiving IRA distributions for tax year 2019 or considering making retirement donations before April 15, 2020. The 2019 editions of Publication 590-A, Contributions to Individual Retirement Arrangements (IRAs) and Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs). Both publications address the unique features of both Roth and traditional IRAs.

Retirement Planning

Careful Considerations: Spousal Rollover or Inherited IRA?

A spouse beneficiary of an IRA faces many decisions. There is great flexibility and many items to consider. For example, how old was my spouse when he or she passed and what impact will that have on my available choices? Do I need money now? How can I minimize my tax burden? Will penalties apply if I withdraw from the account? By systematically considering each question and leveraging the rules, a spouse beneficiary can create a unique plan that fits his or her needs. After all, with the loss of a spouse, the last thing anyone wants to deal with is money problems derived from poor planning.

This article was written by Andy Ives, CFP®, AIF® - IRA Analyst at Ed Slott and
Company, LLC.

Generating and Protecting Retirement Income in Defined Contribution Plans

A paradigm shift must occur in the role DC plans play in building and strengthening retirement security. It is time to move away from a myopic focus on wealth accumulation to emphasize generating and protecting lifetime income. Taking a longer view of the retirement income puzzle, consultants at Willis Towers Watson teamed up with researchers at the Georgetown University Center for Retirement Initiatives, developing a 30-year retirement outcomes for five categories of income-generating options.

This article was written by Angela M. Antonelli, Research Professor and Executive Director of Georgetown University Center for Retirement Initiatives, McCourt School of Public Policy. In conjunction with Willis Towers Watson.

JP Morgan’s Guide to Retirement™

The 2020 JP Morgan’s Guide to Retirement™ provides an effective framework for supporting your retirement planning conversations with clients.

This guide was prepared and distributed by J.P. Morgan Asset Management.

Required Minimum Distributions (RMDs)

This page from the IRS website summarizes the rules on required minimum distributions, both before and after the death of the plan account owner.

The Buckets Are Working

Bucket 2 has sprung a small leak recently, but cash holdings are proving their mettle.

This article was written by Christine Benz, at Morningstar.

Roth IRA Planning

There’s A Tax And Estate Planning Opportunity In The Stock Sell-Off

There’s a financial planning opportunity in the current sell-off in the stock market. Instead of fretting about the damage done to your portfolio, consider the ways you can use the downturn to increase the after-tax wealth of you and your family. There’s one opportunity staring many people in the face, and it can solve two financial problems.

This article was written by Bob Carlson, Senior Contributor at Forbes.

Tax Planning

Advisers Look for IRS, DOL Guidance on SECURE Act’s ‘Must Dos’

The broad retirement savings bill enacted last year has raised a boatload of logistical questions from tax practitioners, but there are a manageable number of “must dos” on which they expect government guidance soon.

This article was written by Warren Rojas, Senior Reporter at Bloomberg Tax.

Coronavirus Sell-Off Presents Tax-Loss Harvesting Opportunity

Tax-loss harvesting and security swapping makes lemonade out of a lemon investment. The concept is simple. Sell a security in your taxable account that’s at a loss to take a tax benefit this year, and simultaneously buy a similar security to replace the one you sold to maintain your position in the market. There is one caveat. You cannot buy a substantially identical security within 30 days of the sale because the IRS will not allow the loss.

This article was written by Rick Ferri, Senior Contributor at Forbes.

Assumed Federal Rates (AFRs)

§7520 Rate for April is: 1.2%

Breakdown:

Financial Facts of the Month

Bear

After closing at an all-time high of 3386 on 2/19/20, the S&P 500 fell 26.7% to close at 2481 on 3/12/20. The fall was the 4th drop of at least 15% but was the 1st decline of at least 20% (the level required to be defined as a “bear” market) that has occurred during the bull market that began on 3/10/09. The 3 other “near-bears” ended on 7/02/10 (off 16.0%), 10/03/11 (off 19.4%) and 12/24/18 (off 19.8%) (Source: BTN Research).

Bull Over

The bull market for the S&P 500 that began on 3/10/09 is now officially over. The bull lasted 131 months (2,756 trading days and 1 month short of 11-years in duration), peaked on 2/19/20 at 3386, gained +529% (total return) or an annualized gain of +18.3% per year (total return), and set 255 all-time closing highs. It was the 11th (and longest) bull since the end of WWII, producing the 2nd largest overall gain (Source: BTN Research).

Every Day

An estimated 10,800 Americans will turn 65 years old each day this year (2020). This group represents the 10th year of 19 years of “Baby Boomers” turning age 65. An estimated 11,500 Americans will turn 65 years old each day in the year 2029 (Source: U.S. Government Accountability Office (GAO)).

Expensive Education

Outstanding student loan debt in the USA was $1.51 trillion as of 12/31/19, up +110% from $720 billion as of 12/31/09 (Source: Federal Reserve Bank of New York).

Half as Much

The total return for the S&P 500 over its 11-year bull market (i.e., 3/10/09 through 3/06/20) is a gain of +16.8% per year (total return). If you missed the 20 best percentage gain days over the 11-year bull run (i.e., 20 days in total, not 20 days per year), the +16.8% annual gain is cut in half to an +8.5% annual gain. There were 2,768 trading days over the entire 11 years (Source: BTN Research).

High and Low

The best trading day for the S&P 500 YTD during 2020 was its +9.3% gain (total return) on 3/13/20. The worst trading day for the S&P 500 YTD was its 9.5% loss (total return) the day before on 3/12/20. During 2011, the best and the worst trading days also occurred on consecutive days (Source: BTN Research).

Smaller Household Size

There were 2.52 people on average living in every American household in 2019, the lowest average household size in US history. There were 3.33 people on average per household in 1960 (Source: U.S. Census Bureau).

Useful Financial Website

Coronavirus Resource Center

Johns Hopkins experts in global public health, infectious disease, and emergency preparedness have been at the forefront of the international response to COVID-19.

This website is a resource to help advance the understanding of the virus, inform the public, and brief policymakers in order to guide a response, improve care, and save lives.

Recommended Reading

Financial / Insurance Calculators & Websites

An extensive list of online calculators and informational websites.

Requirement Updates

Several states have updated their insurance CE requirements. (View updates, CE requirements and more by clicking on the link below.)

2-Hour CFP/CIMA/CPWA Ethics CE Live Webinar

“Ethical Practices for Professionals” (Course#: 248997)

During this live webinar, Ed will present the CFP Board’s Ethics CE program to help bring CFP® professionals up-to-date on the new Code and Standards.

PRESENTED BY: EDWARD J. BARRETT
CFP®, ChFC®, CLU®, CEBS®, RPA, CRPS®, CRPC®

DATE: MONDAY, APRIL 13, 2020

TIME: 2:00PM - 4:00PM EASTERN TIME

CREDIT: 2-HOURS OF CFP/CIMA/CPWA ETHICS CE

(NOTE: This webinar does NOT include state insurance credit.)

FEE: $49.00 (USD)

PAYMENT OPTIONS:

1. CFP ONLY license: $49.00
2. CIMA / CPWA ONLY license: $49.00
3. CFP AND CIMA / CPWA licenses: $49.00 plus an additional
   fee of $25.00

(“Investments & Wealth Institute® has accepted this CFP Ethics webinar for 2 hours of CE credit towards the CIMA®, CPWA® and RMA® certifications.”)

The webinar consists of:

• Five learning objectives:
1. Identify the structure and content of the revised Code and Standards, including significant changes and how the changes affect CFP® professionals.
2. Act in accordance with CFP Board’s fiduciary duty.
3. Apply the Practice Standards when providing Financial Planning.
4. Recognize situations when specific information must be provided to a Client.
5. Recognize and avoid, or fully disclose and manage, Material Conflicts of Interest.
• Five vignettes (review questions)
• Interactive polling questions at the end of each learning objective (except for Learning Objective Number Four)
• Five interactive quiz questions after all Learning Objectives have been presented (credit received for attendee time logged and participation, no examination required)
• Webinar Evaluation Form after the presentation has ended (will open after the presenter has ended the webinar. You will also receive a follow-up email 24‑48 hours AFTER the webinar has concluded, with a link to access the online Evaluation Form.)

Unable to Attend this Month’s Webinar?

Click on the button below to view our Ethics live webinar schedule.

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Advisor Insight Audio Podcast

HOSTED BY: EDWARD J. BARRETT
CFP®, ChFC®, CLU®, CEBS®, RPA, CRPS®, CRPC®

Below is a list of available Advisor Insight Audio Podcast episodes:

2019

• Episode 1: 2019 IRS Tax Information
• Episode 2: 2020 COLA Numbers
• Episode 3: 2020 HSA Numbers

2018

• Episode 1: Roth IRA Recharacterizations After the Tax Cuts and
  Jobs Act of 2017 
  
• Episode 2: Financial Exploitation of Seniors 
  

NOTE: OUR PODCAST EPISODES ARE NOT APPROVED FOR CE CREDIT!

Featured Self-Study CE Courses

The Advisors Guide to IRAs

This is a continuing education course that covers all aspects of Individual Retirement Accounts. The course is designed to help the financial advisor or insurance professional benefit the client with more in-depth information concerning the history and specific types of IRAs; investing; protections; estate planning; and, education.

BEST courses have been updated for 2020, including the provisions signed into law for the SECURE Act of 2019.

BEST Online CE Courses

BEST is a premier provider of CE for financial and insurance professionals, to include State Insurance, CFP® and CIMA®/CPWA® professionals.

BEST courses are updated annually to provide the some of the most accurate and time sensitive content in the industry. Our CE courses are:

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Select a button below to order the CE you need today!

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Self-Study CE Course List

As a top-notch continuing education provider we:

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Order CE courses toll free: 1-800-345-5669 OR
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BEST Virtual Super CE

As conferences and local CE meetings have been cancelled due to the concerns surrounding the Coronviras, BEST has created the solution to help you meet your mandatory CE requirements. BEST Virtual Super CE.

Reasons to setup a BEST Virtual Super CE:

1. Maintain value-added relationships with advisors during this time period
2. Provide up to 21 hours of state insurance CE credit and up to
   20 hours of professional designation CE credit
3. Educate and help advisors grow their business
4. Increase meeting attendance and improve your business objectives

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