July 2021


Advisor News Insight

Happy Independence Day!



Charitable Planning

Senate Bill Proposes Dramatic Changes for Donor Advised Funds and Private Foundations

This article was written by Dahlia B. Doumar, Partner, Robin Krause, Partner, Tanvi Mirani, Associate, and Justin Zaremby, Associate at Patterson Belknap Webb & Tyler LLP.

On June 9, 2021, United States Senators Angus King (Ind.-MA) and Charles Grassley (R-IA) announced plans to introduce the “Accelerating Charitable Efforts Act” or the “ACE Act” (the “Act”) which, if adopted, would implement significant changes with respect to the rules surrounding donor advised funds (“DAFs”) and private foundations. The proposed changes, already being hotly debated in the philanthropic community, would, among other things, mandate operational changes for DAF sponsoring organizations and offer financial incentives (in the form of both excise taxes and tax relief) to motivate donors, sponsoring organizations, and private foundations to distribute funds to public charities at a rapid pace.

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IRA Planning

10-Year Rule: Beneficiary Planning “Loophole” Closed

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

With the passage of the SECURE Act, once common IRA beneficiary planning strategies have been upended. For example, no longer can just anyone stretch payments on an inherited IRA. You must qualify as an “eligible designated beneficiary” (EDB) to stretch using your single life expectancy. As we have written many times, EDBs include surviving spouses, minor children of the account owner (up to majority, or if still in school, up to age 26), disabled and chronically ill individuals, and individuals not more than 10 years younger than the IRA owner.

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Beneficiary Distribution Options for 2021 Traditional IRAs and Roth IRAs (Generalized Summary)

The chart was taken from the 2021 Supplement to the 9th Edition of the Roth IRA Answer Book (Wolters Kluwer, 2021).

Detailed 2-page chart showing distribution options in 2021 for various kinds of beneficiaries (a surviving spouse who is the sole primary beneficiary, other named individuals, a trust, etc.) under a traditional or Roth IRA, and how they are affected by the IRA owner’s date of death.

View chart

When and for Whom are Roth Conversions Most Beneficial? A New Set of Guidelines, Cautions and Caveats

This article was written by Edward McQuarrie, Professor Emeritus in the Leavey School of Business at Santa Clara University.

Much has changed since penalty-free Roth conversions were inaugurated in 2010. Tax rates have gone up and down. The re-characterization provision went away. Heirs can no longer stretch out inherited Roth accounts over a lifetime. Medicare surcharges were expanded and began to adjust for inflation. The age to begin Required Minimum Distributions was pushed out to age 72 and the IRS changed the RMD divisor tables to further slow the pace of distribution. Given these developments it seemed worthwhile to re-examine the rationale for Roth conversions.

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Long Term Care Planning

Washingtonians for a Responsible Future, Long-Term Care Trust Act Fact Sheet

Researched and distributed by Washingtonians for a Responsible Future.

Washington State has approved the nation’s first publicly-funded long-term care insurance program. The measure, called the Long-Term Care Trust Act, would provide a maximum benefit of $36,500 for people who need assistance with at least three activities of daily living (ADLs) such as bathing, toileting, transferring, dressing, or eating. It would be funded with a payroll tax (or what supporters call a premium) of 0.58 percent of wages starting in 2022. The money would go into a trust fund so it could not be spent on other programs.

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Medicare & Medicaid Planning

CMCS Informational Bulletin

The Centers for Medicare & Medicaid Services (CMS) released a Medicaid Informational Bulletin with the updated 2021 Supplemental Security Income (SSI) and Spousal Impoverishment Standards.

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Retirement Planning

How America Saves 2021, 20th Edition

Prepared and distributed by The Vanguard Group, Inc.

In this 20th annual survey of its own 1,700 retirement plans and 4.7 million participants, the full-service plan provider and fund giant offers a detailed snapshot of plan design and participant behavior.

Download survey

Tax Planning

General Explanations of the Administration’s Fiscal Year 2022 Revenue Proposals

The Department of the Treasury’s recent “Greenbook” of revenue proposals, taxing transfers of property into and distributions from, certain entities including partnerships.

Download book

Practice Management - IRA Rollovers

Reg BI Compliance Only Partly Covers DOL Requirements

This article was written by Steven A. Morelli, Editor-in-Chief for InsuranceNewsNet.

Broker-dealers, investment advisors and insurance distributors realize that they must prepare to comply with the Department of Labor’s investment advice guidance, but what do they need to do?

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§7520 Rate for July is: 1.2%

Break down:


Assumed Federal Rates

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Hard to Catch Up

Source: BTN Research

A 30-year old who is investing $500 at the beginning of every month in a tax-deferred 401(k) will accumulate $588,032 by age 60 if the funds grow at ⁺7% per year. If that individual was forced to suspend his/her monthly deferral for just 5 years from ages 35-39, he/she would have to earn ⁺8.8% per year from ages 40-60 to accumulate $588,032 by age 60. This mathematical calculation ignores the impact of taxes on the account which are due upon withdrawal, is for illustrative purposes only and is not intended to reflect any specific investment. Actual results will fluctuate with market conditions and will vary.

Just Pay Your Fair Share

Source: Internal Revenue Service (IRS)

A House of Representative subcommittee met on Wednesday (5/12/21) to discuss “reforming the tax code’s advantageous treatment of the wealthy.” The top 1% of US taxpayers (for tax year 2018) reported at least $540,009 of adjusted gross income (AGI), received 21% of all AGI nationwide, and paid 40% of all the federal income taxes that were collected for that tax year.

Make a Quick Decision

Source: National Association of Realtors

Existing homes that were sold nationwide in March 2021 were on the market on average of just 18 days (2½ weeks) before selling.

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Money In, a Lot More Out

Source: U.S. Department of Treasury

Halfway through fiscal year 2021, i.e., the 6 months ending 3/31/21, the US government has taken in $1.7 trillion of receipts (i.e., taxes), paid out $3.4 trillion of outlays (i.e., spending), resulting in a 2021 fiscal year deficit to date of $1.7 trillion with still 6 months to go in the fiscal year. Last year’s fiscal year 2020 budget deficit of $3.1 trillion is our nation’s all-time record.

State Money

Source: U.S. Census Bureau

The average US state receives 48% of its tax revenue from sales taxes, 41% from income taxes, 6% from license taxes, and 5% from other taxes.

Tax Cheaters

Source: IRS

The government projected in September 2019 that our nation’s “tax gap,” i.e., the difference between what all taxpayers should have paid compared to what they actually paid, was $441 billion per year. On 4/13/21, IRS Commissioner Charles Rettig testified before the Senate Finance Committee that the “tax gap” could be as high as $1 trillion annually, or more than double the previous estimate.

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State of Medicare Advantage

State of Medicare Advantage

by Better Medicare Alliance

The Better Medicare Alliance has published the latest edition of its annual State of Medicare Advantage Report. The report is really a fact book that agents can use to develop marketing content or support legislative affairs efforts. The alliance is a Washington-based group that represents insurers, consumers and other people and organizations with an interest in the Medicare Advantage program.

Download Report

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2021 Federal Income Tax Guide

Our Tax Guide contains tax information such as:

  • Individual income tax rates
  • Estates and trusts tax rates
  • Roth IRA contribution limits and much more...

Download the Tax Guide below:


2021 Social Security & Medicare Reference Guide

Our Reference Guide contains information such as:

  • Social Security income limits
  • Medicare Parts A-D deductibles and premiums
  • Medicare surtaxes and much more...

Download the Reference Guide below:


Financial / Insurance Calculators & Websites

An extensive list of online calculators and informational websites.


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View updates by state, CE requirements and more by clicking on the link below.

View Updates

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Online CE Courses

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