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Advisor News Insight |
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EVENTS |
NEWS |
AFRs |
FACTS |
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B.E.S.T. UPCOMING CE EVENTS |
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Virtual Super CE Event |
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Date / Time:
Thursday, March 24, 2022 / 3:00pm - 4:30pm Eastern Time
Earn up to the maximum amount of CE credit hours of state insurance (approved by your state). CFP® & IWI® (CIMA® / CPWA® / RMA®) professionals may earn 10 CFP® and / or 5 IWI® CE hours of credit. This monthly program includes a live webinar presentation, a self-study course and an online examination. |
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2-Hour CFP® / IWI® Ethics CE Webinar |
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Date / Time: Wednesday, March 16, 2022 / 2:00pm - 4:00pm Eastern Time Earn 2 CE credit hours of CFP® and IWI® (CIMA® / CPWA® / RMA®) Ethics CE with NO exam! (no state insurance credit) |
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INDUSTRY NEWS |
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Annuity Planning |
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How Competitive Are Income Annuity Providers
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Charitable Giving |
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Changes to DAF Rules Reintroduced on Capital HillVaughn E. James Judge Robert H. Bean Professor of Law, 2001 Congressional representatives had introduced companion legislation that would set timelines on when donations to donor-advised funds (DAFs) would have to be distributed to working charities. The legislation would create two new types of DAFs:
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Fidelity Charitable Donors Grant a Record $10 Billion in 2021 — a 41% Increase from Pre-pandemic GivingPrepared and distributed by FIDELITY Charitable® Fidelity Charitable, an independent public charity and the nation’s largest grantmaker, set records in 2021 for number of donor-recommended grants, charities supported, and grant dollars distributed, according to its 2022 Giving Report. Donors recommended a record $10.3 billion in grants, 41% more dollars than pre-pandemic giving in 2019. The 2.2 million individual grants went to 187,000 organizations large and small, reaching local, national, and international groups. |
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Health Savings Account (HSA) Planning |
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Making a One-Time Transfer from an IRA to an HSAStacy Mendenhall, Marketing & Communications Manager at TRI-AD A qualified HSA funding distribution (QHFD) allows for the transfer of funds from an IRA to an HSA. The rollover is tax-free. Moving funds from an IRA to an HSA may have more tax advantages than saving in an IRA alone. |
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IRA Planning |
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IRS Minimum Distribution Proposal Baffles Financial AdvisorsThe new IRS proposal backtracks on earlier guidance the agency issued, and then corrected last year, detailing how long certain retirement plan beneficiaries would have to clear out the savings they inherited. The back-and-forth nature of rule is raising alarms among financial advisers who say they don’t know what to tell their clients about inherited accounts anymore. The proposed rule will require annual RMDs for inherited IRAs if the deceased IRA owner had died after taking his/her RMDs. |
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Required Minimum Distributions [REG. 105954-20]The US Treasury Department and the IRS have released proposed regulations on required minimum distributions from retirement plans. |
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IRA Trusts Should Be IrrevocableSeymour Goldberg, CPA MBA, JD | Goldberg & Goldberg, PC | Melville, NY IRA owners with large accounts may name an IRA trust as the beneficiary of their IRA accounts for estate planning and asset protection advantages. However, naming a revocable trust as the IRA beneficiary could pose potential dangers. In Commerce Bank N.A. v. Bolander, a Kansas Appeals court ruled that an IRA owner’s accounts that were payable to a revocable trust “were vulnerable to creditors of the deceased IRA owner if the probate estate assets were inadequate to satisfy valid claims.” For this reason—and others—it is worthwhile to make IRA trusts irrevocable in order to place a safeguard from creditors. |
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New IRS Rules Help Young IRA OwnersNatalie B. Choate is retired of counsel in Nutter’s Private Client Department IRS Notice 2022 6, issued in January 2022, has dramatically improved the ability of IRA owners under age 59 and a half to withdraw penalty-free money from their accounts using a “series of substantially equal periodic payments,” or SOSEPP. Though new longer life expectancies slightly reduce the maximum initial payment under a SOSEPP, a substantial increase in the permitted interest-rate assumption (to 5%) significantly increases it. |
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Rolling Over Last Year’s IRA DistributionSarah Brenner, JD Director of Retirement Education at Ed Slott and Company, LLC. The rollover rules can be especially challenging at the end of the calendar year. If you took a distribution from your IRA at end of 2021 and are considering a rollover in 2022, here is what you need to know. |
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Life Insurance Planning |
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How Life Insurers Can Provide Differentiated Retirement BenefitsErnst & Young (EY) researchers estimate that by 2030, there will be a $240 trillion retirement savings gap and a $160 trillion protection gap. Insurers are uniquely positioned to address these gaps with products that offer legacy protection, tax-deferred savings growth and guaranteed income for life. |
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Medicare Planning |
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Your Clients’ Medicare Costs—Look Beyond the PremiumsMark Miller, Journalist, Podcaster and Author Health care is one of the largest budget items for most retirees. A good portion of that expense will be Medicare premiums—but that’s a steady and relatively predictable cost. A significant portion will be uneven, difficult-to-predict out-of-pocket spending—and here, financial planners can play an important role helping clients, especially when they first sign up for Medicare. The most important choice your clients make at that point is between traditional fee-for-service Medicare or Medicare Advantage, the managed care alternative offered by commercial insurance companies. |
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Retirement Planning |
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American Views on Defined Contribution Plan Savings, 2021Prepared and distributed by the Investment Company Institute This survey by the Investment Company Institute (ICI) polled respondents about their views on Defined Contribution (DC) retirement account saving and their confidence in 401(k) and other DC plan accounts. Survey responses indicated that Americans value the discipline and investment opportunity that 401(k) plans represent and that individuals were largely opposed to changing the tax preferences or investment control in those accounts. |
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Documentary Explores the World of Retirement PlanningFilmmaker Doug Orchard reminds us in “The Baby Boomer Dilemma: An Exposé on America’s Retirement Experiment,” that there are no easy solutions for Social Security, which economists predict will deplete its trust fund reserves around 2034. |
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Social Security Planning |
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How to Show Couples the Hazards of Claiming Social Security EarlyGinger Szala, Executive Managing Editor of Investment Advisor Magazine Since the elimination of file-and-suspend, a split Social Security claiming strategy is risky and doesn’t pay off for most couples. Claiming at 62 is inadvisable unless it’s necessary. Advisors need to understand Social Security claiming on several levels to find the best scenario for their clients. |
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Why Claiming Social Security at 64 or 57 Could Be a Big MistakeThe bonus retirees get from waiting to claim Social Security income benefits increases in two steps. These steps are a shortcut that results in differences as high as $10,000 in the incremental value of waiting an additional year to reach each new step. Claiming before the valuable step-years can be a costly mistake. Workers who claim at full retirement age lose a significant amount of wealth by not taking advantage of the most valuable 8% one-year step increase. |
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Practice Management |
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FINRA Lays Out Reg. BI, Form CRS Shortcomings
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ASSUMED FEDERAL RATES (AFRs) |
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§7520 Rate for March is: 2.0%Break down: |
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FINANCIAL FACTS OF THE MONTH |
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A Million Less |
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Source: National Student Clearinghouse Research Center™ In the fall of 2019 (pre-pandemic), 15.47 million undergraduates were enrolled in college. In the fall of 2021, 14.44 million undergraduates were enrolled. |
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Bears Too |
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Source: BTN Research In addition to stock “corrections,” the S&P 500 has suffered 7 “bears” in the last 50 years, i.e., declines of at least 20% from a previous closing high. The last S&P 500 “bear” was a 33.9% fall between 2/19/2020 and 3/23/2020, i.e., early during the global pandemic. |
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Declines Happen |
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Source: BTN Research When the S&P 500 closed at 4327 on Thursday 1/27/2022, the stock index was down 9.7% from an all-time closing high of 4793 set just a month ago on 12/29/2021. A decline of 10% would be the index’s 21st tumble of at least 10% (but less than 20%) in the last 50 years but would be its 6th since 2015. Declines of at least 10% but less than 20% from a previous closing high are called “corrections.” |
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Legal Exclusion |
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Source: Congressional Budget Office (CBO) Employees that obtain health insurance coverage through their employer do not pay federal income taxes (or payroll taxes) on the economic benefit of that part of their health insurance that is paid for by the employer. The exclusion from taxation of this economic benefit saves US taxpayers $280 billion a year, the largest tax expenditure in the US tax code. |
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Oil Usage |
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Source: U.S. Energy Information Administration (EIA) The government predicted on 1/11/2022 that US oil production of crude oil will reach 12.4 million barrels a day in 2023, setting an all-time record high. US oil production was 11.8 million barrels a day as of the final week of calendar year 2021, the highest level achieved last year. |
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Pay Nothing |
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Source: Internal Revenue Service (IRS) 32% of the 148.2 million tax returns that were filed for tax year 2019 (the latest year for which data has been released) did not pay any federal income tax, a total of 46.7 million tax returns. |
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Top Ten and Everyone Else |
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Source: IRS The top 10% of US taxpayers in tax year 2019 made at least $154,589 of adjusted gross income (AGI), received 47% of all AGI nationwide and paid 71% of all federal income tax (FIT) collected for the 2019 tax year. The bottom 90% of US taxpayers in tax year 2019 made less than $154,589 of AGI, received 53% of all AGI nationwide and paid 29% of all FIT collected for the 2019 tax year. |
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ADVISOR TOOLS |
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2022 Federal Income Tax Guide |
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Our Tax Guide contains tax information such as:
Download the Tax Guide below: |
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2022 Social Security & Medicare Reference Guide |
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Our Reference Guide contains information such as:
Download the Reference Guide below: |
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Financial/Insurance Calculators & Websites |
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An extensive list of online calculators and informational websites. |
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REQUIREMENT UPDATES |
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State Updates |
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View updates by state, CE requirements and more by clicking on the link below. |
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FEATURED COURSE |
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The Advisor’s Guide to IRAs |
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B.E.S.T. CE PROGRAMS |
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Online CE Courses |
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At BEST we provide you with a lot of CE credit. Courses are cost-effective, updated annually and nationally approved for state insurance and professional designation credits (CFP®, CIMA®, CPWA®, and RMA®). Our CE courses are specifically designed for quick completion and include:
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Virtual Super CE Events |
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We provide advisors with:
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CFP/CIMA/CPWA/RMA Ethics CE 2-hour Live Webinar |
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“Ethics CE: CFP Board’s Revised Code and Standards:
Ethics for CFP Professionals”
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Self-Study CE Course List |
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As a top-notch continuing education provider we:
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DISCLAIMER |
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Reproductions of our Advisor News Insight newsletter are prohibited unless you have received prior authorization from Broker Educational Sales & Training, Inc. (BEST), but you are free to email this copy (in its entirety) to colleagues. This newsletter may not be posted to any website without written consent. This newsletter is a digest of information published by a variety of web-based sources and is published as a service to our users. BEST is not the author of the material unless specifically noted. 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. BEST does not endorse and disclaims any and all responsibility or liability for the accuracy, content, completeness, legality, or reliability of the material linked to in this newsletter. Reliance on this material should only be undertaken after an independent review of its accuracy, completeness, efficacy, and timeliness. Opinions expressed are those of the author of the article and do not necessarily reflect the positions of BEST. THIS
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