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BEST SEPTEMBER
2020
 

Advisor News Insight

 
No work is insignificant. All labor that...
 
 
 
 
INDUSTRY NEWS  
 

Estate Planning

Estate Planning, COVID-19 and Grandparents

For most people, it takes some kind of life-changing event before the thought of needing an estate plan or life insurance ever comes to mind. Trust & Will, conducted a survey and found that 66.5% of people between the ages of 30 to 70 were either entirely unfamiliar with estate planning or understood only the basics. About 41% of baby boomers — who are all at least 56 — have yet to even create a will or living trust.

This article was written by Patrick Hicks, Head of Legal at, Trust & Will.

 
 
 

The Best Estate Plan For Most Married IRA Owners After The SECURE ACT

Effective January 1, 2020, we have a radically different law governing Inherited IRAs and retirement plans than we had in the past. The stock market seems particularly jittery and that may continue for a long time. Your own finances and family situation could change significantly between the time you draft your wills, trusts and beneficiary designations and the time of your and/or your spouse’s death.

This article was written and distributed by the Wealth Advisor.

 

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IRA Planning

Taxpayer That Took IRA Funds to Make Cash Offer on Residence Denied Late Rollover Relief

While the IRS has issued numerous private letter rulings over the years granting taxpayers relief for late IRA rollovers, far fewer rulings have been issued denying relief. But in PLR 2020033008 the IRS did just that for a taxpayer’s request for permission to make a late rollover, as the taxpayer had effectively attempted to borrow the funds from the IRA to make a cash offer on a residence.

 
 
 

The number of 401(k) and IRA millionaires rebounded in the second quarter, hit their second-highest level

The tally of 401(k) and IRA millionaires hit their second-highest level in the second quarter despite the pandemic that forced a large part of the economy into a standstill.

The number of 401(k) millionaires increased to 224,000 from 150,000, a 49% jump from the first quarter, according to an analysis of more than 30 million retirement accounts from Fidelity Investments provided exclusively to Yahoo Money. The number of IRA millionaires increased about 30% to 204,000 from 157,000.

This article was written by Dhara Singh, covers retirement and housing on the personal finance team at Yahoo! Finance.

 

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Retirement Planning

5 Retirement Plan Beneficiary Mistakes to Avoid

When you want to make sure that your assets are distributed to your intended beneficiaries. The transfer of retirement plans at death is controlled by beneficiary forms associated with individual plans. Beneficiary forms supersede all other estate planning documents. Directly named, or designated, beneficiaries will be the ones who receive the funds. This article discusses five retirement plan beneficiary mistakes you want to avoid.

This article was written by Robert Klein, CPA, PFS, CFP®, RICP®, CLTC®, Founder and President of Retirement Income Center.

 
 
 

Estimating “The End” of Retirement

The length of retirement is one of the most important assumptions in a financial plan. Despite its uncertainty, care must be taken to ensure the estimate is reasonable, because errors in forecasts can have a significant impact on estimates of how much someone must save for retirement, and how much they can spend during it. This paper explores various factors relating to how to estimate “the end” of retirement in a financial plan.

This paper was researched and written by David Blanchett, PhD, MSFS, CFA, CLU®, ChFC®, CFP®, Head of Retirement Research, Morningstar Investment Management LLC.

 
 
 

How Accurate Are Retirees’ Assessments of Their Retirement Risk?

Retirees with limited financial resources face numerous risks, including out-living their money (longevity risk), investment losses (market risk), unexpected health expenses (health risk), the unforeseen needs of family members (family risk), and even retirement benefit cuts (policy risk). This study systematically values and ranks the financial impacts of these risks from both the objective and subjective perspectives and then compares them to show the gaps between retirees’ actual risks and their perceptions of the risks in a unified framework.

This article was written by Wenliang Hou, Research Economist, Center for Retirement Research at Boston College.

 
 
 

It’s A Brand ‘New Era’ For Retirement Planning

The U.S. is in a “new era” of retirement income strategies, in part because of an avalanche of temporary and permanent policy and regulatory changes, said Jamie Hopkins, managing director of Carson Coaching and director of retirement research for the Carson Group. Legislation designed to mitigate the impact of the coronavirus pandemic, combined with today’s low interest-rate environment, is reshaping certain aspects of retirement planning. However, certain changes, such as the possibility of early withdrawals under the CARES Act, could have unintended consequences unless clients get proper advice.

This article was written by Christopher Robbins, Senior Editor, Financial Advisor Magazine.

 
 
 

Pension Benefit Statements - Lifetime Income Illustrations

The Labor Department has unveiled an Interim Final Rule on lifetime income disclosures under the SECURE Act. Under the Interim Final Rule, retirement plans would provide lifetime income illustrations using prescribed assumptions designed, the Labor Department notes, “to give savers a realistic illustration of how much monthly retirement income they could expect to purchase with their account balance.”

 

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Tax Planning

California Legislators Propose 0.4% Wealth Tax, Plus 16.8% Income Tax Rate

The newest tax some golden state legislators want to collect is a .4% wealth tax. The “leader” in state taxes already, this would be first-in-the nation wealth tax targeting the very wealthy. This isn’t on income they earn, mind you, but on their wealth itself. A summary of the bill says, “AB 2088 establishes a first-in-the-nation net worth tax, setting a 0.4% tax rate on all net worth above $30 million. The tax would be applied to the net worth of about 30,400 Californians, “raising approximately $7.5 billion annually,” the summary claims. “Wealth tax aside, high taxes in California are nothing new. The state already has a highest-in-the-nation 13.3% top rate, and another recently introduced tax bill (Assembly Bill 1253) would raise it to 16.8% retroactively.

This article was written by Robert W. Wood, Contributor, Forbes.

 
 
 

How recent legislation has altered the planning landscape

When looking across the planning landscape, it may seem the impact of recent legislation is clear. But as an advisor, you can never relax. New laws can send you scrambling to modify existing financial plans or implement different strategies altogether. Only by understanding this legislation — including what it means for your clients now and in the future — can you develop plans that meet clients’ financial goals, while also providing flexibility to adapt to the constantly changing topography. Here are a few of the most important legislative changes over the past few years, and what they mean for clients .

This article was written by David Haughton, JD, Advanced Planning Consultant, Commonwealth Financial Network.

 
 
 

How to design the optimal income harvesting strategy

Most financial advisors have a straightforward recommendation for managing and minimizing clients’ long-term tax liabilities: defer, defer, defer, avoid, avoid, avoid.

In the long run, it’s cheaper to defer those taxes and pay them with discounted future dollars. In the best of outcomes, the taxes can be avoided altogether.

This article was written by Michael Kitces, MSFS, MTax, CFP, Contributing Writer at Financial Planning.

 
 
 

INSIGHT: Three Important Areas in 2020 Year-End Planning

The tax planning environment in the latter half of 2020 presents new challenges.

There are new tax laws and government programs generally aimed at helping taxpayers. Yet there are also prospects of tax increases, federal and state, particularly on the wealthy.

In this rapidly changing environment, it is particularly important that we remember “other taxes” in our year-end planning, such as gift and estate taxes, even property taxes.

This article was written by Robert J. Rojas, Owner, and J. Michael Pusey, CPA, National Tax Director of Rojas & Associates, CPAs.

 
 
 

IRS previews draft version of 1040 for next year

The Internal Revenue Service has released a draft version of the Form 1040 for tax year 2020 with several significant changes probably in store for next tax season.

This article was written by Michael Cohn, Editor-in-chief, AccountingToday.com.

 

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Practice Management

‘Adviser’ or ‘Advisor?’ FAQs from SEC Seek to Clarify Terminology

The U.S. Securities and Exchange Commission has posted several new Frequently Asked Questions addressing various scenarios concerning the use of the terms “adviser” and “advisor” by dually registered and stand-alone broker-dealers.

 
 
 
 

In Reversal, DOL Will Hold Hearing on Fiduciary Rule

The Labor Department plans to hold a hearing on its proposed fiduciary rule that aims to align with the Securities and Exchange Commission’s Regulation Best Interest, according to a notice in the Federal Register. A hearing is on Sept. 3 and, if necessary, Sept 4.

This article was written by Melanie Waddell, Washington Bureau Chief, Investment Advisory Group, ALM Media LLC.

 
 
 

SEC Advances Plan to Expand Accredited Investor Definition

The Securities Exchange Commission proposed amendments to its accredited investor definition, expanding the entities that qualify based on an investment test instead of an asset test.

This article was written by Melanie Waddell, Washington Bureau Chief, Investment Advisory Group, ALM Media LLC.

 

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  AFRs
 

Assumed Federal Rates (AFRs)

§7520 Rate for September is: 0.4%

Breakdown:

 
Assumed Federal Rates
 

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FACTS  
 

Financial Facts of the Month

A Wild Wall Street Ride

The S&P 500 was down 30.4% YTD (total return) as of 3/23/20, but 106 trading days later the index is up +6.5% YTD (total return) as of last Friday 8/21/20 (source: S&P Dow Jones Indices).

 
 
 

During A Slowdown

The USA was in an 18-month recession from the end of December 2007 through the end of June 2009, a 1½ year period in which the S&P 500 gained +13.3% (total return). The USA is now in another recession, this latest downturn beginning at the end of February 2020. The S&P 500 consists of 500 stocks chosen for market (source: various).

 
 

Go Big Red

Famous stock investor Warren Buffett turns 90 years old next Sunday on 8/30/20. Buffett, a 1951 graduate of the University of Nebraska, is worth $69 billion. Buffett has accumulated 84% of his net worth since he turned 65 years old, i.e., in the last 25 years (source: Fortune).

 
 
 

It's for Your Own Good

Effective 7/14/20, Colorado became the 9th US state to offer a pre-tax retirement plan to private sector workers who do not have access to an employer-sponsored plan. Colorado companies lacking a retirement plan are now required to “auto-enroll” its employees in the state-run retirement plan, but workers may “opt-out.” An estimated 40% of Colorado’s workers are employed by companies with no retirement plan (source: National Conference on Public Employee Retirement Systems (NCPERS)).

 
 
 

Just In Case

The 5 largest banks in the USA announced in mid-July 2020 their plans to set aside $35 billion to prepare for what could be a wave of future defaults–mortgages, credit cards, personal loans, auto loans and corporate bankruptcies. The banks estimate that $24 billion of the $35 billion of potential losses could occur over the next 12 months (source: CNN).

 

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Medicaid Enrollment Increases

Medicaid enrollment was 72.3 million in April, up from 71.5 million in March and 71 million in February, according to the latest enrollment figures released last week by the Centers for Medicare & Medicaid Services. The increase reverses a three-year decline, the number of people covered by Medicaid nationwide rose markedly this spring as the impact of the recession caused by the outbreak of COVID-19 began to take hold (source: BeneffitsPro).

 
 
 

Most Susceptible

As of 8/08/20, 58% of American COVID-19 deaths occurred to individuals at least age 75, while just 1% of the victims were under the age of 35 (source: HealthData.gov).

 
 
 

Other Pandemics

Dating back to the 14th century, i.e., the 100 years that began 1/01/1301, there have been 15 pandemics where more than 100,000 people died, not counting the current COVID-19 pandemic. We are in the 21st century today, i.e., the 100 years that began 1/01/2001 (source: Federal Reserve Bank of St. Louis).

 
 
 

The World's Biggest

The size of the US economy was $19.4 trillion as of 6/30/20, down $2.3 trillion from $21.7 trillion recorded as of 12/31/19. 10 years ago (6/30/10), the size of the US economy was $14.9 trillion. 20 years ago (6/30/00), the size of the US economy was $10.2 trillion. 30 years ago (6/30/90), the size of the US economy was $6.0 trillion (source: Bureau of Economic Analysis).

 

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  TOOLS
 

Advisor Tools

     

2020 Tax Guide

 

2020 Reference Guide to Social Security & Medicare

Our Tax Guide contains tax information such as:

 

Our Reference Guide contains information such as:

  • Individual income tax rates
  • Estates and trusts tax rates
  • Roth IRA contribution limits and much more
 
  • Social Security income limits
  • Medicare Parts A-D deductibles and premiums
  • Medicare surtaxes and much more

Download the Tax Guide below:

 

Download the Reference Guide below:

     
 
 
 

Financial / Insurance Calculators & Websites

An extensive list of online calculators and informational websites.

 

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REQUIREMENTS  
 

Requirement Updates

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

 

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  WEBINARS
 

2-Hour CFP/CIMA/CPWA/RMA 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 financial professionals up-to-date on the new Code and Standards.


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

DATE: WEDNESDAY, SEPTEMBER 23, 2020

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

CREDIT: 2-HOURS OF CFP ETHICS CE
(also approved for CIMA/CPWA/RMA Ethics)

FEE: $49.00 (USD)

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


PAYMENT OPTIONS:

  1. CFP ONLY license: $49.00
  2. CIMA / CPWA ONLY license: $49.00
  3. CFP AND CIMA / CPWA / RMA 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.”)

 
 

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Instructor

Edward J. Barrett, CFP®, ChFC®, CLU®, CEBS®, RPA®, CERS®, CPRC®, CPFA®, is the Founder, President and CEO of Broker Educational Sales & Training, Inc., (BEST).

 
 
 

Unable to Attend this Month’s Webinar?

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

 
 
 

Need State Insurance or More CFP or CIMA/CPWA/RMA Credits?

View our Virtual Super CE events OR online course catalogs by clicking on the corresponding button below.

 
 
 

Subscribe (Sign up)

Receive updates and registration information for future webinars by clicking on the button below.

 

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BEST Virtual Super CE Event

“The Advisors Guide to Retirement Planning”

Up to 21 credit hours of State Insurance CE credit and
10 CE credit hours of CFP and 5 CE credit hours of CIMA/CPWA/RMA credit.*


DATE: TUESDAY, SEPTEMBER 15, 2020

TIME: 1:00PM - 2:30PM EASTERN TIME

CREDIT: Click here to view credit hours by state.

FEE: $54.95 (USD)
(*plus state roster fees and $10.00 per additional professional certificate)


EVENT INFORMATION:

Electronic Exam: Self-study course – “The Advisors Guide to Retirement Planning”

The link to the electronic exam will be provided at the end of the live webinar

Exam will be accessible between 9/15/20 – 9/29/20

Pass/Fail will be displayed immediately upon completion
(Unlimited retakes available)

 

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Instructor

Edward J. Barrett, CFP®, ChFC®, CLU®, CEBS®, RPA®, CERS®, CPRC®, CPFA®, is the Founder, President and CEO of Broker Educational Sales & Training, Inc., (BEST).

 
 
 

Need 2 Credit Hours of CFP/CIMA/CPWA/RMA Ethics CE?

See information in the previous section of this newsletter or click on the button below to view our Ethics live webinar schedule.

 
 
 

Need More State Insurance, CFP or CIMA/CPWA/RMA Credits?

View our online course catalogs by clicking on the button below.

 
 
 

Subscribe (Sign up)

Receive updates and registration information for future webinars by clicking on the button below.

 

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BEST Virtual Super CE Event

“Estate Planning”

Up to 20 credit hours of State Insurance CE credit and
10 CE credit hours of CFP and 5 CE credit hours of CIMA/CPWA/RMA credit.*


DATES: TUESDAY, SEPTEMBER 22, 2020

TIME: 1:00PM - 2:30PM EASTERN TIME

CREDIT: Click here to view credit hours by state.

FEE: $54.95 (USD)
(*plus state roster fees and $10.00 per additional professional certificate)


EVENT INFORMATION:

Electronic Exam: Self-study/Correspondence course –
“Estate Planning”

The link to the electronic exam will be provided at the end of the live webinar

Exam will be accessible between 9/22/20 – 10/6/20

Pass/Fail will be displayed immediately upon completion
(Unlimited retakes available)

 
 
 

Instructor

Edward J. Barrett, CFP®, ChFC®, CLU®, CEBS®, RPA®, CERS®, CPRC®, CPFA®, is the Founder, President and CEO of Broker Educational Sales & Training, Inc., (BEST).

 

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Need 2 Credit Hours of CFP/CIMA/CPWA/RMA Ethics CE?

See information in the previous section of this newsletter or click on the button below to view our Ethics live webinar schedule.

 
 
 

Need More State Insurance, CFP or CIMA/CPWA/RMA Credits?

View our online course catalogs by clicking on the button below.

 
 
 

Subscribe (Sign up)

Receive updates and registration information for future webinars by clicking on the button below.

 

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PODCAST  
 

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


2018


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

 

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  FEATURED
 

Featured Self-Study CE Course

Advisors Guide to Medicare and Medicaid

Advisors Guide to Medicare and Medicaid provides a detailed study of Medicare, Medigap policies, and Medicaid. In each of these programs, the areas of eligibility, enrollment, benefits, deductibles, and co-payments are analyzed in great detail. This course also includes a chapter on Medicaid Planning discussing the issue of transferring assets during the “crisis stage,” use of Trusts, qualifying Medicaid Annuities and Promissory Notes. The new 2010 Medicare supplement plans are explained in detail as is how the Patient Protection and Affordable Care Act of 2010 affect Medicare and Medicaid.

 
 

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:

  • Cost-effective
  • Nationally approved
  • Specifically designed for quick completion and include:
    • Self-paced courses
    • Unlimited retakes of review questions and final examinations
    • Instant grading
    • Course material accessible for up to one year from date of purchase
    • Excellent customer support team

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

 

Already completed your requirements? Please click here to pass on our information to a colleague.

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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.

 

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VIRTUAL SUPER CE  
 

BEST Virtual Super CE Combines the Benefits and Convenience of:

  1. Live Webinar Presentation: A 1 hour CE live webinar (optional 1 credit hour of CE credit may be provided in most states, except MA, and for professional designations)
  2. Self-Study Course: A Self-study Course with an electronic exam (earn up to 21 hours of state insurance CE credit (varies by state), 10 hours of CFP CE credit and 5 hours of CIMA/CPWA/RMA CE credit)
  3. Electronic Exam: Self-study course (exam requires an invite code which is given to all attendees during the live webinar)
 
 
 

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

Call toll free: 1-800-345-5669
Email: BusinessDev@brokered.net


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

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