Advisor News Insight

Annuity Planning

Secure Act’s 401(k) Annuity Options: The Pros and Cons

The Secure Act contains provisions that will impact nearly every client saving for retirement—along with many who have already begun taking withdrawals from qualified plans and IRAs. The Secure Act provisions impacting lifetime income options in defined contribution plans have the potential to be some of the most significant.

This article was written by William H. Byrnes, Esq., LL.M., CWM, Executive Professor and Associate Dean of Special Projects at Texas A&M University School of Law and Robert Bloink, Esq., LL.M., Author for ThinkAdvisor.

Charitable Planning

QCD After the SECURE Act

The original rules for QCD are that if you are over age 70½ years old (subject to RMDs under the pre-SECURE rules), you can make a direct distribution to a charitable organization from your IRA. (Only IRAs are allowed to make QCD distributions). By qualifying this direct distribution as a QCD, you do not have to include the amount of the distribution as income on your tax return. After the SECURE Act passed, QCD now has a few differences.

This article was written by Jim Blankenship, CFP®, EA, founder and principal of Blankenship Financial Planning.

Educational Planning

SECURE Act Allows 529 Plans to Repay (Some) Student Loan Debt

One reason many people can’t contribute as much as they’d like—or should—to their 401k is they have competing financial priorities such as paying down student loan debt. But one 529-plan related provision in the SECURE Act may help that problem, if in a roundabout way. Until now, 529 funds could not be used to repay student loan debt. But the SECURE Act opens the door for families to take tax-free 529 plan distributions of as much as $10,000 for student loan repayment.

This article was written by Brian Anderson, Managing Editor of 401(k) Specialist.

Estate Planning

Top Ten Estate Planning and Estate Tax Developments of 2019

Ron Aucutt’s annual list (with detailed analysis) of the 2019 Top Ten estate planning and estate developments include topics addressing business valuation, “clawback” and portability, the deductibility of estate and trust administration expenses, electronic wills, retirement planning, legislative issues including introduced legislation that may foreshadow future law, and states’ income taxation of trusts and estate taxation of QTIP trusts.

This article was written by Ronald D. Aucutt, Senior Fiduciary Counsel at Bessemer Trust.

IRA Planning

IRA Required Minimum Distributions: SECURE Act Changes When Distributions Must Begin

On Friday, January 24, the Internal Revenue Service (IRS) issued Notice 2020-6 providing reporting relief as it relates to RMD statement reporting for 2020.

Retirement Planning

Bridging Accumulation To Income

When thinking about retirement today, many Americans are focused on their accumulation strategy, and worrying about if they will have enough to retire. Certainly saving for retirement is no small feat. But once they have reached their accumulation goals, clients may not be thinking about what comes next. Working with them to create a formal retirement income strategy can go a long way in helping to reduce risks to their retirement savings, and boost their confidence as they head into this next phase of their lives.

This article was written by Kelly LaVigne, JD Vice President of Advanced Markets for Allianz Life Insurance Company of North America.

Examining the Nest Egg The Sources of Retirement Income for Older American

The National Institute on Retirement Security (NIRS) issued a report examining the sources of retirement income for older Americans—finding that while many Americans rely on Social Security throughout retirement, only some are receiving the benefit. According to the report, 40% of older American retirees rely only on Social Security income in retirement, while only 6.8% receive income through Social Security, a defined benefit (DB) plan and a defined contribution (DC) plan. The report found roughly the same number of older Americans will receive income from DB plans, as from DC plans. However, this is likely to change, as the American workforce steers away from pensions.

This report was issued by the NIRS.

Millennials & Retirement 2020

Millennials’ retirement expectations are similar to previous generations – they hope to retire with adequate income that will last. However, a survey by the Insured Retirement Institute (IRI) finds that these expectations are not well aligned with the retirement planning steps millennials have taken thus far. The oldest millennials are about 40 years old, approaching their peak earning years with about 25 years to go before reaching traditional retirement age. The youngest of this generation has 40 or more years until retirement.

This report prepared and distributed by the Insured Retirement Institute (IRI).

QLAC: A Way To Secure Retirement Income Later In Life

Turning age 72 is an important milestone if you have a traditional IRA or 401(k). That’s when you must begin taking mandatory minimum yearly withdrawals, known as required minimum distributions (RMDs) from these accounts.2 But what if you don’t need that money for current living expenses and would prefer to receive guaranteed lifetime income later in retirement? Fortunately, the US Treasury Department issued a rule creating Qualified Longevity Annuity Contracts (QLACs) in 2014.

This article was distributed by Fidelity.

The Time Is Now: Next Steps Towards A More Secure Retirement For All Americans

Given the fact that nearly half of households headed by someone age 55 or older have no retirement savings and that one estimate puts the median retirement account balance across all savers at $40,000, the Aspen Institute Financial Security Program convened its third annual Leadership Forum on Retirement Savings. More than 70 experts and industry leaders explored feasible solutions over the course of two days. By Forum’s end, participants had identified five ideas most ready for advancement.

This report was distributed by the  Aspen Institute Financial Security Program.

Social Security Planning

Should Clients Take a Lump-Sum Social Security Payment?

Advice from many experts today is that people should delay claiming their Social Security benefits for as long as possible, or until age 70, when they have to claim them. But what do advisors tell clients who have delayed taking Social Security even after reaching full retirement age (FRA), and when they make the claim, the government offers them a lump-sum retroactive payment up to six months? Should they take it or not, and what’s the downside, if there is one?

This article was written by Ginger Szala, Executive Managing Editor of Investment Advisor Magazine.

This New Year, See What You Can Do Online at SocialSecurity.gov

Are you looking for new ways to save time this new year? Social Security offers many of its services online by signing up for a secure my Social Security account.

This article was written by Darlynda Bogle, Assistant Deputy Commissioner for Social Security Administration.

Assumed Federal Rates (AFRs)

§7520 Rate for February is: 2.2%

Breakdown:

Financial Facts of the Month

Back and Forth

In national elections going back to 1928, the United States has elected 7 Republican presidents (beginning with Hoover and ending with Trump) and 7 Democratic presidents (beginning with FDR and ending with Obama) (Source: BTN Research).

I Don't Agree

The 4 new rotating voting members of the Federal Open Market Committee (FOMC) in 2020 are the regional Fed bank presidents from Cleveland (Loretta Mester), Philadelphia (Patrick Harker), Dallas (Robert Kaplan) and Minneapolis (Neel Kashkari). Mester cast 2 dissenting votes in 2016 while Kashkari cast 3 dissenting votes in 2017. Harker and Kaplan, both regional Fed presidents since 2015, have never cast a dissenting FOMC vote. The #1 FOMC meeting this year is set for January 28-29 (Source: U.S. Federal Reserve System).

Population Profile

13.7% of the US population (44.7 million individuals), approximately 1 out of every 7people, was born outside the United States (Source: U.S. Census Bureau).

Soldiers

The US military has at least 10,000 troops today in each of 3 different countries – Afghanistan (14,000), Kuwait (13,000) and Qatar (13,000) (source: The Washington Post).

Super Game

Super Bowl #54 will be held in Miami on 2/02/20. No team in NFL history has ever played in the Super Bowl on their home field. Next year’s game (2021) will be played in Tampa, FL (source: National Football League (NFL)).

Three

If the USA’s GDP growth for 2019 that will be reported on 1/30/20 shows an increase of at least +3% for last year, it will end a record streak of 13 consecutive years of “sub +3%” growth (2006-2018). The next longest streak in our history of “sub +3%” growth are the 4 years from 1930-1933 (source: U.S. Department of Commerce).

Time in the Market

Since 1950 (i.e., 1950-2019), the S&P 500 index has been up 54% of 17,613 trading days, 60% of 840 months, 66% of 280 quarters and 73% of 70 years (source: BTN Research).

Unlikely

The Fed Funds futures market is forecasting an 87% chance of no change in rates by the Federal Reserve at this week’s meeting as of the close of trading last Friday 1/24/20 (source: CME Group).

Up vs. Down

The split between “up” and “down” trading days for the S&P 500 over the last 50 years (i.e., 1970-2019, encompassing a total of 12,613 trading days) is 53% “up” and 47% “down.” The split during calendar year 2019 (there were 252 trading days last year) was 60/40 (source: BTN Research).

Useful Financial Website

The OKR Goal Setting & Leadership System, Free eBook & Resources

Today OKRs are used by some of the world’s fastest growing teams and companies. S. Jay Coulter, CFP®, CIMA® has customized the OKR system for financial advisors, teams and firms. Because he has witnessed the powerful transformative ability of OKR’s, he is giving you the system for free.

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.)

CFP Ethics 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, FEBRUARY 10, 2020

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

CREDIT: 2-HOURS OF CFP 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.)

Click on the “Upcoming webinars” button below to view future CFP Ethics Webinar dates/times.

Unable to attend this month’s webinar? Receive updates and registration information for future webinars by clicking on the “Subscribe” button below.

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 is Back!

Broker Educational Sales & Training, Inc. (BEST) is a premier provider of continuing education for insurance and financial professionals, to include State Insurance professionals, CFP® certificants and CIMA/CPWA designees. BEST provides the most relevant, timely and reliable CE course content in the industry. Courses are approved in all 50 states and the District of Columbia and credits are maximized to allow for quick and easy completion.

Our CE courses are:

• Cost-effective
• Hassle-free
• Specifically designed for quick completion with accurate, current and relevant topics and include:
• Online access to state approved course material
• Unlimited retakes of review questions and final examinations
• Instant grading
• Submission of credits to the Department of Insurance
• Unbeatable customer service

Our CE courses help advisors stay abreast of the latest changes in industry rules and regulations and provides instruction on new products and planning techniques. Although the compliance department of any broker-dealer will be very proactive in ensuring that all CE requirements related to licensure are met, independent agents and brokers must assume this responsibility themselves.

Self-Study CE Course List

As a top-notch continuing education provider we:

• Deliver CE to financial and insurance advisors
• Offer up-to-date and industry pertinent CE courses that maximize credits
• Provide ClearCert certified long-term care and annuity training CE courses
• Supply CE courses that are approved in all 50 states and the
  District of Columbia

Order CE courses toll free: 1-800-345-5669 OR
send an email to self_study@brokered.net.

Super CE Program

When it comes to making a decision on how to fulfill one’s continuing education (CE) requirement, there has been a long-standing debate about online vs. classroom study. Although the options lead to a similar end result, the two mediums could not be more different. Online learning essentially allows you to study at your own pace, while classroom training tends to be carried out by certified trainers with real-life experience.

Main reasons to schedule a Super CE program:

1. A unique live CE delivery method that grants advisors several hours of CE in just one-hour of classroom time
2. Allows advisors to review the self-study materials on their own time, while meeting most, if not all, of their credit requirements in one sitting
3. Wholesalers will have an opportunity to showcase their industry knowledge while pitching their products to the attendees

What Advisors Say...

“Thanks! This was the most enjoyable CE I’ve completed in my over 14+ years as an advisor. I’ll be back.”  ~ Raymond James Advisor

“I didn’t even need the CE, but took the class to expand my knowledge and understanding. Thank you BEST.”  ~ Merrill Lynch Advisor

“BEST has perfected the Super CE program!”  ~ Morgan Stanley Advisor

“Productive & effective use of time in meeting Continuing Education requirements.”  ~ Wells Fargo Advisor

“Excellent program, well worth the time!” ~ UBS Advisor

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Articles are copyrighted to their publishers. All links were tested before this newsletter was emailed to ensure that they are still functional, but publishers move and/or delete articles. Therefore, we cannot guarantee that the links provided will remain operational.

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