Weekend Reading For Financial Planners (Dec 31-Jan 1)

December 30, 2022 01:04 pm 0 Comments CATEGORY: Weekend Reading

Enjoy the current installment of “Weekend Reading For Financial Planners” - this week’s edition kicks off with the news that the passage of “SECURE Act 2.0” has brought a wide range of changes to the world of retirement planning. And given the variety of planning opportunities created by the legislation – from the raising of the beginning age for RMDs to the ability to transfer funds from 529 plans to Roth IRAs – advisors have a significant opportunity to demonstrate value for their clients!

Also in industry news this week:

Why many clients of robo-advisors are seeking out human advisors in the current market climate
A new study shows that there is a wide gap between firms leveraging technology to enhance the client experience and those that do not treat their tech stack as a priority

From there, we have several articles on advisor technology:

A recent survey shows that many advisors at large firms are unhappy with their firm’s current tech stack and that client growth has suffered because of it
Why it is important for advisory firms to conduct an audit of their tech stack and the steps they can take to conduct the exercise
Why advisors might consider looking past some of the big names in advisor technology to find tools that can provide a better experience for themselves and their clients

We also have a number of articles on investments:

Fixed-income ETFs saw inflows this year, while their mutual fund counterparts experienced significant outflows, suggesting that the dominance of bond mutual funds could be eroding
How advisors are increasingly purchasing individual bonds rather than bond funds in client accounts
Why a higher interest rate environment could represent a ‘sea change’ for investors in the years ahead

We wrap up with three final articles, all about self-improvement:

Why working to change their mindsets might be the activity that provides the greatest return-on-investment for advisors
How to set better health goals for 2023 and actually follow through on them
Why the ability to achieve big goals starts with seemingly small habits

Enjoy the ‘light’ reading!

Weekend Reading For Financial Planners (Dec 24-25)

December 23, 2022 01:07 pm 0 Comments CATEGORY: Weekend Reading

Enjoy the current installment of “Weekend Reading For Financial Planners” - this week’s edition kicks off with the news that Congress appears poised to pass “SECURE Act 2.0”, a series of measures that will have significant impacts on the world of retirement planning. From gradually raising the RMD age to 75 to expanding opportunities to make Roth-style contributions, to increasing the annual limit for Qualified Charitable Distributions, this legislation will likely impact nearly all financial planning clients!

Also in industry news this week:

How a recent survey shows that financial advisors are increasingly attracted to independent affiliation models, with greater autonomy, higher potential pay, and the ability to build value in a business cited as key factors driving this preference
While RIA M&A activity has been red hot during the past couple of years, a survey suggests that advisors are expecting lower valuations in 2023

From there, we have several articles on advisor marketing:

Five tactics advisors can use to make the most of the online referrals they receive
How advisors can structure introductory prospect meetings to build trust and increase the chances of moving the relationship forward
Why advisors crafting their marketing message might first want to consider whether their target client needs a ‘life raft’ or a ‘sailboat’

We also have a number of articles on spending and budgeting:

Why advisors might want to consider using a client service calendar to organize the wide range of services they provide for clients throughout the year
A review of financial planning actions, from tax-loss harvesting to charitable giving, that have a December 31 deadline
How the holiday season presents an opportunity to have important money-related conversations with family members

We wrap up with three final articles, all about gift giving:

The do’s and don’ts of holiday gift giving in the workplace
How ‘regifting’ can help save money and reduce waste
Why being present during gatherings with friends and family members can be the best gift of all during the holiday season

Enjoy the ‘light’ reading!

Kitces Course on Reviewing Estate Planning Documents

Course Page How To Spot Issues For Discussion When Reviewing Estate Documents Estate Planning Course

Review estate documents more quickly by learning the key sections to focus on.

5 Hours CE

LEARN MORE

BUY NOW

How To Spot Issues For Discussion When Reviewing Estate Documents

5 Hours CE Credit (CFP, CPE, IWI, and American College)

Instructors

Michael Kitces, MSFA, MAX, CFP, CLU, ChFC, RHU, REBC, CASL
Jeffrey Levine, CPA/PFS, CFP, CWS, MSA

You asked the clients for their estate planning documents, and they gave you 62 pages of Wills and trusts. As a financial advisor, you're expected to review the documents to help them understand whether their estate plan aligns with their goals. But it can take hours and hours to read through lengthy documents and translate legalese to English and provide recommendations. However, most estate planning documents have common elements that provide the core information that advisors need to know, and learning them provides a shortcut that allows advisors to review documents more quickly and spot the key issues. By the end of this course, you will be able to:

Where to look to spot the three key aspects of a power of attorney: who has been authorized to make decisions, what decisions a person has been authorized to make, and when a power of attorney goes into effect
How to find the three key aspects of an advance medical directive: who has been authorized to make decisions, what decisions a person has been authorized to make, and when the authorization goes into effect
Learn the typical document structure that nearly all Wills follow to find the crucial information faster (and the boilerplate to skip)
Learn to identify whether the testamentary trust is a marital trust, bypass trust, or generation-skipping trust, even when it's not labeled that way in the documents
Learn how and get practice in spotting the funding, distributions, and termination provisions for marital trusts, bypass trusts, and descendant’s trusts in common estate planning documents
Learn the key sections of Wills and revocable living trusts to focus on to be able to diagram out the client's flow of estate assets

Advisors may receive a full refund for Kitces Courses within 45 days of purchase or prior to completing the course, whichever comes first.
Upon the completion of the course, you will be asked to take a course survey after which you will receive your certificate of completion. The course survey will allow Kitces to continue to serve you effectively. We can't do it without you and appreciate your survey participation.

Who This Course Is Right For

The course was designed for advisors who have CFP certification and have already learned the fundamentals of estate planning tools and techniques but are not lawyers and have limited experience and expertise in reading real-world estate planning documents.

What You Get With How To Review Estate Planning Documents

5 Hours CE

Automatic reporting for CFP, IWI,
and American College. Self-reporting for CPA CPE credits.

5 Modules

Over an hour and a half of educational videos.

Kitces Certificate

Earn a Kitces Course Certificate
to add to your resume.

2 Real-World Case Studies

Practice applying planning strategies
to real-life situations.

1 Interactive Capstone

Put your learning into practice

Self-Paced

Learn whenever it’s convenient for you.

Instructors

Michael Kitces, MSFS, MTAX, CFP, CLU, ChFC, RHU, REBC, CASL
Chief Financial Planning Nerd and Founder, Kitces.com
Head of Planning Strategy, Buckingham Wealth Partners

Michael Kitces is the founder and Chief Financial Planning Nerd at Kitces.com. He is also Head of Planning Strategy at Buckingham Wealth Partners, a turnkey wealth management services provider supporting thousands of independent financial advisors. In addition, he is a co-founder of the XY Planning Network, AdvicePay, fpPathfinder, and New Planner Recruiting.

Jeffrey Levine, CPA/PFS, CFP, CWS, MSA
Lead Financial Planning Nerd, Kitces.com
Chief Planning Officer, Buckingham Wealth Partners

Jeffrey Levine,  Lead Financial Planning Nerd at Kitces.com, guides advisors through Form 1040 and its associated items and schedules. Interactive exercises reinforce the lessons from each module, moving advisors from comprehension to application. Jeffrey Levine is a nationally-recognized and award-winning financial advisor, speaker, and educator. He is the Lead Financial Planning Nerd at Kitces.com, home of the popular Nerd’s Eye View blog, and also serves as Chief Planning Officer, Buckingham Wealth Partners.

What Others Have Said About Our Courses

"A really nice review of what to consider when reviewing estate planning documents and how to add value for your clients. I think the Estate Planning Diagrams are a useful, visual tool for clients. I plan to add them to my practice."

Betty W.

"The Kitces Estate Planning Course helped me understand my role in doing estate reviews and understand the concepts from an advisor's perspective rather than an attorney's perspective. It will greatly enhance my ability to provide more value to clients and to create a systematic process."

Christopher R.

This Kitces Course is $397. Advicers who have joined the Kitces Members Section can register at a discounted rate of $297. (Learn more about Premier Membership or how to obtain a Group Discount for multiple advisors in your firm).

PREMIER MEMBERS
$297

NON-MEMBER & BASIC
$397

Not a Member? Buy Combo for discounts.

COURSE + Premier Membership Combo
$466

Kitces.com Premier Membership includes Kitces Course discounts, free monthly webinars, over 100 Hours of CE on-demand, CFP ethics, and more! - Access to our entire CE Quiz library on demand.
- Access to Exclusive Kitces-written CFP Ethics CE.
- Monthly Live Office Hours session with Michael and the Kitces Team to answer your questions.
- 2/Year New + All Archived Issues Of The Kitces Report.
- Access to Archives of All Educational Webinars.
- Unlimited Access to Members Section Resources including Charts and Spreadsheets.
- IAR reporting add-on (available at checkout).

100% Satisfaction Guarantee. Advisors may receive a full refund for Kitces Courses within 45 days of purchase, or prior to completing the course, whichever comes first. Advisors will have 180 days to complete the course. If the course is not completed within 180 days, the registration will expire and the advisor will need to pay to re-enroll for the course.

Premier Member Discounts

Kitces.com Premier Membership includes Kitces Course discounts, free monthly webinars, over 100 Hours of CE on-demand, CFP ethics, and more!

LEARN ABOUT PREMIER MEMBERSHIP

Group Discounts

Discounts are available for group enrollments. Additional discounts apply with a Kitces Premier Group Membership rates.

SEE GROUP PRICING

FAQS

General Questions

Who is the courses designed for?

Kitces Online Courses are designed for advisors who have limited to no experience interacting with clients. Advisors with five or more years of experience may find the course is not suited to their experience level.

How long will advisors have access to the course?

Advisors will have 180 days to complete the course. If the course is not completed within 180 days, the registration will expire and the advisor will need to pay to re-enroll for the course.

The content may be modified or deleted if no longer relevant or applicable when considering current industry standards, practices, or legal framework.

I want to buy the course, but why do I have make a Kitces Account?

Our courses are housed on a Learning Management System (LMS) that is connected to Kitces.com. To purchase any of our courses, you will need to first create a Kitces account to access the catalog of courses and complete your purchase. You can always return to your courses dashboard through the members section of Kitces.com.

I’m a Premier Member. How do I use the Premier coupon?

Visit the course page on Kitces.com and copy your members-only coupon code. Then when you go to our Learning Management System (LMS) and click “Get this course,” you'll be directed to the payment pop-up. When you get to the payment pop-up, click “Got a coupon?” and a field will appear for you to enter the Premier code.

Thanks for purchasing a Kitces Course! The course is housed in a Learning Management System (LMS) that is connected to your Kitces.com account. Login to your Kitces.com account and from the members section, click 'Kitces Courses' from the left navigation menu to access your courses.

CE Information

Are the courses CE-eligible? How is CE reported?

The courses are eligible for Continuing Education for CFP, CPE, and American College certifications, as well as most other relevant certifications. Kitces.com will report CE for CFP, IWI, and American College certifications on your behalf on the 1st and 16th of each month. A completion certificate will be emailed to you so you can self-report CPE and other relevant CE.

Will I receive a certificate?

Yes. A completion certificate will be emailed to you for reporting purposes. You will be asked to complete a course survey after which you will receive your certificate of completion. Completing the course survey will allow Kitces to continue to serve you effectively. We can't do it without you and appreciate your survey participation.

Where do I add my certification number information?

If you didn’t include your certification number information upon signing up for the course, no worries! You can add it easily after signing into your Learner portal and completing the following steps:

1. Hover your mouse over Learner in the top-right menu to see a dropdown appear
2. From the dropdown, select My Info
3. Update the certification fields shown and click Update User

Refunds

What is the refund policy?

Advisors may receive a full refund for Kitces Courses within 45 days of purchase or prior to completing the course, whichever comes first.

Ready to Purchase?

Questions? Email us at [email protected]

PREMIER MEMBERS
$297

NON-MEMBER & BASIC
$397

Not a Member? Buy Combo for discounts.

COURSE + Premier Membership Combo $466

Weekend Reading For Financial Planners (Aug 27-28)

August 26, 2022 02:21 pm 0 Comments CATEGORY: Weekend Reading

Enjoy the current installment of “Weekend Reading For Financial Planners” - this week’s edition kicks off with the news that the Biden Administration has released a series of long-anticipated Federal student loan relief measures. And while the announced $10,000 of debt forgiveness for some borrowers made the most headlines, advisors will also want to be mindful of a new Income-Driven Repayment plan that could help some clients with student debt reduce their monthly payments and the planning implications of the resumption of student loan payments in January!

Also in industry news this week:

An industry survey suggests that advisory firms are prioritizing growth despite a slower pace of client acquisitions so far in 2022 and rising labor costs
How Charles Schwab and other advisor custodians are competing to offer a more seamless digital onboarding experience for advisors and their clients

From there, we have several articles on practice management:

New rankings show what it takes for RIAs to make it into the top 100 by AUM, and why seeking out ‘smaller’ clients can spur firm growth
The range of considerations and potential consequences for RIAs considering going public
How advisory firm owners can take advantage of a newly expanded range of available sources of liquidity

We also have a number of articles on investing:

Why some advisors and their clients might want to consider taking RMDs this year ‘in-kind’ rather than in cash
How fixed annuities have become more popular among consumers amid rising interest rates and turbulent markets
New research shows how ‘free’ stock trades potentially cost consumers billions of dollars each year

We wrap up with three final articles, all about career development:

Why building a personal brand is more about consistency than a large social media following
How to construct a ‘personal board of directors’ who can help guide and advance your career
Best practices for advisors (or their clients) who want to take a sabbatical away from work

Enjoy the ‘light’ reading!

#FA Success Ep 294: Developing COI Referrals With Attorneys From An Attorney-Turned-Advisor, With Neel Shah

August 16, 2022 07:08 am 0 Comments CATEGORY: Financial Advisor Success Podcast

Welcome back to the 294th episode of the Financial Advisor Success Podcast!

My guest on today's podcast is Neel Shah. Neel is the Founder of Shah Total Planning, which itself is a combination of Beacon Wealth Solutions (an independent RIA) and Shah & Associates (a law firm) in Monroe Township, New Jersey, and oversees $57 million in assets under management for 50 client households.

What's unique about Neel, though, is how, as an estate planning attorney turned financial advisor, he combines estate and elder care legal services with his advisory firm to be a more one-stop-shop for advice while outsourcing his investments altogether… and then leverages his background as an attorney to generate referrals from attorneys and other Centers of Influence to help spur his growth.

In this episode, we talk in-depth about how Neel transitioned from attorney to advisor by launching an RIA alongside his law firm to operate, as Neel puts it, in a “duplex” situation where both firms work jointly under one roof but also independently behind separate walls, how Neel went from being an attorney who got most of his clients from financial advisor referrals to a financial advisor who now builds his business with COI referrals (and Neel’s tips as an attorney on what it takes to get referrals from attorneys), and the path Neel took to outsource so much of his investment and operations back office, so he can focus more on client relationships and have confidence in his ability to scale his firms without having to worry about and be responsible for hiring and training more personnel.

We also talk about how working with other attorneys in study and coaching groups that were exploring opening up their own RIAs led Neel to an aha moment where he realized that the legal business is very transactional but that becoming a financial advisor would give him the opportunity to form deeper relationships with his clients, why Neel views himself as more of a career-adder than a career changer as he has always been able to apply the new skills he has gained over each of the stages in his professional life to the stage that came next, and the way that, having worked in different legal and advisory capacities with clients in his career, Neel has lived firsthand the importance of working with other advisors, attorneys, and CPAs, as a collective, and continues to do so in joint work with other professionals.

And be certain to listen to the end, where Neel shares how he overcame the internalized fears with a realization that getting to the next level in a career meant leaving behind what was comfortable (and recognizing that he could always return to where he began if it wasn’t working out), how, even though he has been disappointed by business mistakes and relationships in the past, Neel has been able to turn them into learning opportunities, and how Neel ultimately got comfortable with the reality that building his business was kind of like driving in a murky desert where he can’t see beyond his headlights… and consequently has adopted an approach of just trying to make each year better than the last and see where the growth takes him.

So, whether you’re interested in learning about why Neel was inspired to transition from attorney to financial advisor but maintain firms for both titles, how Neel leverages Center of Influence referrals from attorneys to enhance the growth of his firm, or how Neel outsources some of the firms’ operations to provide a truly collective service for his clients, then we hope you enjoy this episode of the Financial Advisor Success podcast, with Neel Shah.

Weekend Reading For Financial Planners (Aug 6-7)

August 5, 2022 02:14 pm 0 Comments CATEGORY: Weekend Reading

Enjoy the current installment of “Weekend Reading For Financial Planners” - this week’s edition kicks off with the news that the SEC has issued a new bulletin clarifying the responsibilities of brokers under Regulation Best Interest (Reg BI). The guidance indicates that, despite early fears that Reg BI was ‘overly accommodating’ to the brokerage industry, the Commission is expecting that reducing conflicts of interest should be an ongoing task for broker-dealers rather than a one-time compliance disclosure change, and that brokerage firms will want to ‘show their work’ when it comes to their compliance responsibilities (a potential best practice for RIAs, too!)!

Also in industry news this week:

A study suggests that a significant number of brokers who are disciplined by FINRA are engaging in ‘regulatory arbitrage’ by moving to state-regulated insurance companies, making it more difficult for consumers to learn about their past infractions
How the proposed “Inflation Reduction Act” will impact financial advisors and their clients

From there, we have several articles on advisor content marketing:

How advisors can generate topic ideas for content to engage their target audience
The best practices (and pitfalls to avoid) for advisors when crafting an email subject line
Why campaigns that combine “sunk marketing” with “momentum marketing” can lead to greater results for advisors

We also have a number of articles on retirement planning:

How the variability in annuity payouts across annuity providers has exploded in 2022, creating an opportunity for advisors to add value to clients by comparison shopping across insurance companies
Why state long-term care insurance programs are driving demand for private policies, and the implications of these programs for advisors and their clients
How advisors can support clients in choosing a Medigap policy

We wrap up with three final articles, all about the advisor regulatory landscape:

Why better regulation of the insurance industry could make life easier for financial advisors
What advisors need to know about the new IAR continuing education requirements
Why pursuing title reform for financial planners is a worthwhile endeavor, even if it might be a bumpy process

Enjoy the ‘light’ reading!

Kitces Course on BETA How To Spot Issues For Discussion When Reviewing Estate Documents

BETA How To Spot Issues For Discussion When Reviewing Estate Documents

5 Hours CE

LEARN MORE

BUY NOW

BETA How To Spot Issues For Discussion When Reviewing Estate Documents

5 Hours CE Credit (CFP, CPE, IWI, and American College)

Instructors

Michael Kitces, MSFA, MAX, CFP, CLU, ChFC, RHU, REBC, CASL
Jeffrey Levine, CPA/PFS, CFP, CWS, MSA

Estate planning is a vital part of a family’s financial plan, but clients often want clarity on what their documents say. The challenge is that estate planning documents vary widely by state and by attorney, so there is no one-size-fits-all method for reviewing estate planning documents. However, most estate planning documents have common elements that provide the core information that clients tend to be interested in. By the end of this course, you will be able to:

Review estate planning documents
Summarize the key information contained in the documents
Discuss potential issues and opportunities with clients

Who This Course Is Right For

The course was designed for advisors with beginner to intermediate experience with estate planning. Advisors who have several years of helping clients plan for estate planning may find this course is not suited for their advanced experience level.

What You Get With How to Review Estate Planning

5 Hours CE

Automatic reporting for CFP, IWI,
and American College. Self-reporting for CPA CPE credits.

5 Modules

Over an hour and a half of educational videos

Kitces Certificate

Earn a Kitces Course Certificate
to add to your resume.

2 Real-World Case Studies

Practice applying planning strategies
to real-life situations.

1 Interactive Capstone

Put your learning into practice.

Self-Paced

Learn whenever it’s convenient for you.

Instructors

Michael Kitces, MSFS, MTAX, CFP, CLU, ChFC, RHU, REBC, CASL
Chief Financial Planning Nerd and Founder, Kitces.com
Head of Planning Strategy, Buckingham Wealth Partners

Jeffrey Levine, CPA/PFS, CFP, CWS, MSA
Lead Financial Planning Nerd, Kitces.com
Chief Planning Officer, Buckingham Wealth Partners

Our BETA Course Is Now Full

Stay tuned for the release of the course How To Spot Issues For Discussion When Reviewing Estate Documents next month.

Become a Premier Member

Kitces.com Premier Membership includes Kitces Course discounts, free monthly webinars, over 100 Hours of CE on-demand, CFP ethics, and more!

LEARN ABOUT PREMIER MEMBERSHIP

Group Discounts

Discounts are available for group enrollments. Additional discounts apply with a Kitces Premier Group Membership rates.

SEE GROUP PRICING

FAQS

General Questions

Who are the courses designed for?

How long will advisors have access to the course?

For our standard courses, advisors will have 180 days to complete the course. If the course is not completed within 180 days, the registration will expire and the advisor will need to pay to re-enroll for the course.

The content may be modified or deleted if no longer relevant or applicable when considering current industry standards, practices, or legal framework.

I want to buy the course, but why do I need a Kitces Account?

Our courses are housed on a Learning Management System (LMS) that is connected to Kitces.com. To purchase any of our courses, you will need to first login or create a Kitces account, and then you will be directed to the Learning Management System (LMS) to complete the purchase of your course.

Thanks for purchasing a Kitces Course! After logging into Kitces.com, click on "Courses" from the left navigation menu in the members section to return to your course dashboard.

CE Information

Are the courses CE-eligible? How is CE reported?

Will I receive a certificate?

Yes. A completion certificate will be emailed to you for reporting purposes.

Where do I add my certification number information?

1. Hover your mouse over Learner in the top-right menu to see a dropdown appear
2. From the dropdown, select My Info
3. Update the certification fields shown and click Update User

Refunds

What is the refund policy?

Advisors may receive a full refund for Kitces Courses within 45 days of purchase or prior to completing the course, whichever comes first.

Ready to Purchase?

Questions? Email us at [email protected]

Announcing IAR CE From Kitces And The Mid-Year State Of The Blog

July 25, 2022 07:02 am 0 Comments CATEGORY: Nerd's Eye View

2022 was a year that began with high hopes as households were slowly re-emerging from pandemic shutdowns, markets were reaching new highs, and most advisory firms had growing momentum. Within just a few months, though, Omicron had led to another wave of at least partial shutdowns, inflation began to rear its ugly head in a way not seen in decades, and the market fell to its worst first-half start since 1970. Yet despite this – and perhaps even because of it – advisory firms are putting an ever-greater focus on financial planning in 2022, as a way to both show value to clients in the midst of difficult market returns, and, more broadly, to help clients navigate the current environment. Which we’ve witnessed first-hand here at Kitces.com, as the advisor community has engaged in record numbers with some of our recent articles on how best to advise clients through it all, and capitalize on the opportunities along the way.

And so, as we enter the second half of the year, we want to give all of you, our Readers and Members, an update on what we’re doing to continue to serve and support the advisor community through a challenging year, and some of the new enhancements you’ll see from us in the months to come.

First and foremost, we’re excited to announce that, effective immediately, all of our Nerd’s Eye View blog and recorded webinar CE from 2022 (and all future CE) is now eligible for the new IAR CE requirements. Which is relevant already in 2022 for any advisors who are registered in one of the 3 states (as their home state, or simply a state in which they have more than the de minimis number of clients) that has already rolled out the IAR CE obligation – Maryland, Mississippi, and Vermont – and will be relevant for far more advisors in the years to come as more states implement the NASAA Model Rule for IAR CE (with Arkansas, Kentucky, Michigan, Nevada, Oklahoma, Rhode Island, Wisconsin, and Washington DC already expected to enact their IAR CE requirements for 2023). All advisors in the Kitces Members Section will be able to earn IAR CE in addition to their credits for CFP, CPA, EA, and various IWI and American College designations as part of their ongoing membership fee (though notably, NASAA is imposing a $3/credit, or $36/year, reporting fee that Kitces will also have to collect on behalf of advisors and remit for their reporting).

In addition, we’ve also just launched a major update to our popular Course on “How to Find Planning Opportunities When Reviewing a Client’s Tax Return”, which has been refreshed to include the latest IRS forms and schedules, new educational videos from our very own Jeff Levine, and improvements to the Course navigation and supporting materials (downloadable video transcripts for your highlighting or future reference!). And in the coming month, we’ll be rolling out our newest course on “How To Spot Planning Opportunities when Reviewing Estate Planning Documents”. Because, the reality is, while we may learn about tax and estate planning in our CFP classes, there’s remarkably little to show us as advisors how best to navigate the reams of tax returns and estate documents that we collect from clients to figure out what their opportunities are! A gap our Kitces Courses aim to fill!

We’re also gearing up for our upcoming Kitces Financial Planning Value Summit, after more than 1,000 advisors registered for our first Value Summit last year! This year’s Summit will be held on Thursday, December 8^th – Save the date! – and we’re already accepting submissions for those who have a unique financial planning value-add that they’d be willing to showcase to other advisors. Notably, this is a paid speaking opportunity for advisors whose submissions are chosen to be featured at the Summit!

In the coming months, we’re also looking to make more updates to our popular AdvisorTech Directory that launched earlier this year at FinTech.Kitces.com. Stay tuned for new data on each software provider that shows how often they’re used by other advisors, and the Satisfaction scores that other advisors are giving the software. Along with, in partnership with our Consulting Consortium partner Craig Iskowitz of the Ezra Group, a new “Integration Score” to make it easier for advisors to understand how well various AdvisorTech tools actually integrate with other software solutions!

And given all of this growth, we’re also proud to welcome several recent new hires to the Kitces team – including Director of Engagement Steve Viner, Curriculum DesigNerd Shelitha Smodic, and Education Systems Manager Ryan Taylor – and have announced (or are about to launch) several new openings as well, including Director of Advisor Education, an Instructional DesigNerd, an Associate Financial Planning Nerd, and an upcoming role to become our full-time Director of Research. Those who are interested (or have a friend or family member who might be!) can check out our Career Opportunities page for more!

All in pursuit of our mission – Making Financial Advicers Better, and More Successful – through our ongoing focus on Navigational resources, Educational insights, Research on advicers, and Development of advicer skills. We appreciate the opportunity to continue to serve you within and especially in the midst of a challenging year, and welcome your ongoing feedback about what else we can do to serve you even better!

Kitces Course on How to Find Planning Opportunities When Reviewing a Client’s Tax Return

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Strategies For Maximizing (Or Minimizing!) Rule 72(t) Early Distribution Payments Using IRS Notice 2022-6

March 9, 2022 07:08 am 11 Comments CATEGORY: Retirement Planning

Sometimes there are situations where individuals need access to funds in their tax-deferred retirement accounts sooner than the rules say they can. In fact, except for a narrow range of ‘emergency’ situations, the only way most individuals can access these funds without incurring a 10% early withdrawal penalty tax is by setting up a “Series of Substantially Equal Payments”, otherwise known as 72(t) payments.

Until recently, however, the interest rates used to calculate the amounts of 72(t) payments have been so low that the payments themselves often weren’t enough to meet the needs of individuals who wanted to access their retirement funds. But, with the recent release of IRS Notice 2022-6, the potential amount of 72(t) payments many individuals can make has been substantially increased. Which means that 72(t) payments might now be a more realistic option for individuals who need early access to their retirement funds!

For those who wish to receive 72(t) payments, there are several rules which must be considered. First, those receiving 72(t) payments must take recurring annual distributions for either 5 years or until reaching age 59 ½ – whichever is longer. Second, taxpayers must use one of three methods established by the IRS to calculate their 72(t) payments: RMD, amortization, or annuitization. Regardless of which method is used to calculate payment, the price for altering or canceling a 72(t) payment is steep, usually resulting in a 10% penalty tax on all distributions previously taken – plus interest!

However, IRS Notice 2022-6 sets a new ‘floor’ interest rate of 5% for calculating 72(t) payments, representing a substantial increase over the previous maximum of 120% of the applicable Federal mid-term rate. Thus, for a 50-year-old with a $1 million retirement portfolio, this means the maximum annual 72(t) payment increases from about $37,000 to over $63,000! The scale of the change is significant enough that some individuals may now need to consider ways to reduce their 72(t) payments if they are more than they need to withdraw. For example, someone can consider splitting their retirement accounts into two separate accounts, such that 72(t) payments are only taken from one account, and accessing funds from the other (non-72(t)) account won’t risk creating a modification of their 72(t) payment schedule (and triggering the associated penalties and interest).

Likewise, for those using the annuitization or amortization methods and who may no longer need as much from their 72(t) payments (but who continue receiving them to avoid retroactive penalties and interest), the rules allow for a one-time change to the RMD method of calculation (which generally results in lower maximum payments than either the amortization or the annuitization method) without creating a modification to the schedule. Which can at least reduce taxable income (and the amount drawn from retirement funds) that an individual in these circumstances may not need.

Ultimately, the key point is that with the updates made by IRS Notice 2022-6, 72(t) payments may now be a more practical option for individuals who need early access to retirement funds. Which can give advisors and clients a reason to reconsider this strategy with fresh eyes – either to alter an existing schedule, or perhaps to establish one for the first time!

Please contact your Firm's Group Admin

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Review estate documents more quickly by learning the key sections to focus on.

5 Hours CE

How To Spot Issues For Discussion When Reviewing Estate Documents

5 Hours CE Credit (CFP, CPE, IWI, and American College)

Instructors

Michael Kitces, MSFA, MAX, CFP, CLU, ChFC, RHU, REBC, CASLJeffrey Levine, CPA/PFS, CFP, CWS, MSA

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What You Get With How To Review Estate Planning Documents

5 Hours CE

5 Modules

Kitces Certificate

2 Real-World Case Studies

1 Interactive Capstone

Self-Paced

Instructors

Michael Kitces, MSFS, MTAX, CFP, CLU, ChFC, RHU, REBC, CASLChief Financial Planning Nerd and Founder, Kitces.comHead of Planning Strategy, Buckingham Wealth Partners

Jeffrey Levine, CPA/PFS, CFP, CWS, MSALead Financial Planning Nerd, Kitces.comChief Planning Officer, Buckingham Wealth Partners

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BETA How To Spot Issues For Discussion When Reviewing Estate Documents

5 Hours CE

BETA How To Spot Issues For Discussion When Reviewing Estate Documents

5 Hours CE Credit (CFP, CPE, IWI, and American College)

Instructors

Michael Kitces, MSFA, MAX, CFP, CLU, ChFC, RHU, REBC, CASLJeffrey Levine, CPA/PFS, CFP, CWS, MSA

Who This Course Is Right For

What You Get With How to Review Estate Planning

5 Hours CE

5 Modules

Kitces Certificate

2 Real-World Case Studies

1 Interactive Capstone

Self-Paced

Instructors

Michael Kitces, MSFS, MTAX, CFP, CLU, ChFC, RHU, REBC, CASLChief Financial Planning Nerd and Founder, Kitces.comHead of Planning Strategy, Buckingham Wealth Partners

Jeffrey Levine, CPA/PFS, CFP, CWS, MSALead Financial Planning Nerd, Kitces.comChief Planning Officer, Buckingham Wealth Partners

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Stay tuned for the release of the course How To Spot Issues For Discussion When Reviewing Estate Documents next month.

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I bought the course, but I don’t know how to sign in and get started.

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Michael Kitces, MSFA, MAX, CFP, CLU, ChFC, RHU, REBC, CASL
Jeffrey Levine, CPA/PFS, CFP, CWS, MSA

Michael Kitces, MSFS, MTAX, CFP, CLU, ChFC, RHU, REBC, CASL
Chief Financial Planning Nerd and Founder, Kitces.com
Head of Planning Strategy, Buckingham Wealth Partners

Jeffrey Levine, CPA/PFS, CFP, CWS, MSA
Lead Financial Planning Nerd, Kitces.com
Chief Planning Officer, Buckingham Wealth Partners

Michael Kitces, MSFA, MAX, CFP, CLU, ChFC, RHU, REBC, CASL
Jeffrey Levine, CPA/PFS, CFP, CWS, MSA

Michael Kitces, MSFS, MTAX, CFP, CLU, ChFC, RHU, REBC, CASL
Chief Financial Planning Nerd and Founder, Kitces.com
Head of Planning Strategy, Buckingham Wealth Partners

Jeffrey Levine, CPA/PFS, CFP, CWS, MSA
Lead Financial Planning Nerd, Kitces.com
Chief Planning Officer, Buckingham Wealth Partners