Earlier in the week, this blog posed a number of questions to the CFP Board in response to the Fact Sheet that the organization had issued, seeking to address a number of issues the planning community has raised that still appeared to be unanswered. Yesterday, I had the opportunity to speak with several staff members at the CFP Board, and wanted to share the information that I received.
IRS (Unintentionally?) Reopens the Door to Annuity Partial 1035 Exchange Strategy
Annuity owners sometimes wish to make a change to a portion of their annuity holdings without facing adverse tax consequences - and under current law, this can be accomplished by exchanging part of the existing annuity for a new contract on a tax-free basis.
However, the recent private letter ruling 201038012 from the IRS may have unintentionally expanded the flexibility of partial annuity exchanges to the point that they might not just be used, but could be abused as well.
CFP Board Issues Fee Increase Fact Sheet – Some Questions Remain
As debate - and some confusion - continues regarding the CFP Board's proposed fee increase, the organization has made a new fact sheet available to help address many of the questions and concerns that have been raised. However, it seems that a few of the pressing questions from the planning community are not entirely answered.
Time May Be Running Out For Social Security Strategy – But Will It Matter?
In recent years, a little-known strategy of withdrawing from and reapplying for Social Security retirement benefits has been receiving increasing attention. So much, in fact, that it looks like the Federal government's Office of Management and Budget may soon be shutting the strategy down for good. However, the impact may not actually be very significant after all!
Negative TIPS Yield Is Not Really That Inflationary
The news this week has been abuzz with Monday's Federal government auction of Treasury Inflation-protected Securities (TIPS) that resulted in a yield of -0.55%. Surely, an investor willingness to accept a negative return in exchange for inflation-protection means investors are panicked about an impending surge of inflation, right? Actually, no, in this case, it doesn't.
Is There Value to Developing a Brand for the CFP Marks?
Many planners report that the primary reason their clients choose to work with them is a foundation of trust built with that individual client, which subsequently blossoms forth into a bona fide planner-client relationship. Accordingly, many planners have recently begun to ask: why the CFP Board fee increase to support public awareness of the CFP marks, if that’s not how clients select their planners anyway?
Fixing the Retirement Crisis Requires Us To Admit We’re Irrational
The President's Economic Recovery Advisory Board (PERAB) recently released its recommendations on how to simplify the tax code and improve the implementation of tax policy. Embedded within the report are numerous recommendations that would impact our so-called "retirement crisis" in the U.S., and a few of the report's solutions highlight a surprisingly simple yet important reality: we're not always very rational about the decisions we make regarding retirement.
Planning For Higher Taxes in the Future – But What Kind?
It's difficult to go far in the world of financial planning these days without hearing a discussion about the "inevitability" of higher taxes in the future, leading to a broad range of tax planning strategies to dodge the anticipated increase in the income tax brackets. But in practice, it seems that we might be confusing the idea that the government will need to collect more tax dollars in the aggregate from us - a higher tax burden - with the belief that today's income tax brackets are at a low point that must rise. One does not, necessarily, lead to the other.Read More...
When Is Loanership Better Than Ownership?
We often find great value and pride in owning things - yet the reality is that in many situations, we actually don't get a lot of use out of much of what we own. Which starts to beg the question - maybe we should spend more time renting stuff we want to use (loanership) when we want to use it, rather than buying it (ownership).
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Do You Have a Written Plan for Making Portfolio Distributions?
In a world where retirement planning is increasingly about not only the accumulation phase towards retirement, but the distribution phase in retirement, financial planners must deal with the practical realities of generating retirement cash flows for clients. And although most of us may have some policies in our practices about how we generate cash flows for clients, do any of us actually have a written withdrawal policy statement in place to determine the appropriate tactics and strategies for each particular client?
