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?
Is the Flash Crash Still Scaring Your Clients Out Of The Markets?
Today is October 19, 2011. It is the 23rd anniversary of the Black Monday stock market crash of 1987, and in a few months we will "celebrate" the 6-month anniversary of the May 6, 2010 Flash Crash. With our recent obsession about crashes, I've begun to wonder: what is it about market crashes that scares us so much?
The Toll of Market Uncertainty on the Financial Planner
Any financial planner who has worked with a client through some "market turbulence" or an outright bear market is well aware of the stress that market uncertainty can bring to the client. But how often do we look at the stress that market uncertainty brings to the financial planner vis-a-vis the client relationship?
No Cost of Living Adjustment for Social Security… Again
On Friday, the Social Security Administration announced that there would be no increase in Social Security benefits for 2011, representing the 2nd consecutive year that Social Security benefits have not increased... and prompting no small amount of outrage from many Americans who feel that they are falling further and further behind in their ability to keep up with their retirement expenses.
The Rising Popularity of "Free Range" Investment Managers
For much of the past decade or two, one of the most important qualifications for a "good" mutual fund manager was that he/she keep the fund squarely within the constraints of its Morningstar style box, while hopefully generating some positive alpha. Now, however, an emerging group of managers are overtly bucking the trend, with a new approach of "free range" investing.
Is the CFP Board Failing As "Our" Champion?
As discussion and debate rages on regarding the CFP Board's proposed 80% fee increase, and the associated public awareness campaign it is intended to support, much of the underlying concern seems to boil down to a simple issue: Is the CFP Board "our" champion? Should it be? Can it be?
The Inherent Conflicts of Delivering Professional Services
A new blog video post by financial planner Tim Maurer makes an interesting point - the very essence of our 6 step financial planning process includes a conflict of interest that we as financial planners must navigate: that while gathering information and setting goals may be the most important step for a client, it's not the step where we get paid.
