CE Course Catalog

In this month’s newsletter we look in depth at strategies for applying behavioral finance within a financial planning context, including the ways in which System 1 and System 2 decision making processes differ, the impact of saliency on decision making and behavior, behavioral patterns for following through on commitments, the impact of “herd” behavior in financial planning, and how the “End of History Illusion” affects financial planning!

LO #1: Identify the differences between System 1 and System 2 decision making processes and when they are used.

LO #2: Identify the impact of Saliency on decision making and behavior.

LO #3: Identify behavioral patterns of following through on commitments and breaking goals into smaller pieces.

LO #4: Identify the behavioral impact of “herd” or peer behavior in financial planning.

LO #5: Identify how the “End of History Illusion” affects financial planning.

• Intermediate

• CFP: General Principles of Financial Planning / Investment Planning / Retirement Planning
• NASBA: Specialized Knowledge (Personal Financial Planning)

• 1.0 CFP hours
• N/A NASBA hours

This course will be available at least through December 31, 2018.

All of our courses are reviewed on a yearly basis and renewed or discontinued every December.

In this white paper, we explore retiree health insurance provided through Medicare, the core components of Medicare coverage, how different components of Medicare are provided and the costs of coverage to retirees, the role that Medicare Advantage can play for retirees trying to further manage down the cost of premiums, the initial enrollment periods for signing up for Medicare, and the importance of reviewing Medicare coverage annually.

LO #1: Identify the primary source of health insurance for those over age 65.

LO #2: Identify the three core components of Medicare coverage.

LO #3: Identify standard premiums for Medicare coverage.

LO #4: Identify the health insurance coverage provided by Medicare Advantage.

LO #5: Identify Medicare initial enrollment periods.

• Advanced

• CFP: General Principles of Financial Planning / Investment Planning / Retirement Planning
• NASBA: Specialized Knowledge (Personal Financial Planning)

• 1.5 CFP hours
• N/A NASBA hours

This course will be available at least through December 31, 2018.

All of our courses are reviewed on a yearly basis and renewed or discontinued every December.

In this white paper, we explore the rules for post-death required minimum distributions of inherited retirement accounts, how the obligation of beneficiaries to take post-death withdrawals varies significantly depending on the type of beneficiary (and whether they are a “designated” beneficiary or not), steps to take to comply with the various obligations that beneficiaries face when inheriting such accounts, and strategies for retirement account owners to consider – before death – to minimize how much beneficiaries are obligated to withdraw in the future, allowing them to maximize and “stretch”, to the extent possible, the ongoing tax-deferral benefits of (inherited) retirement accounts.

LO #1: Identify the rules for post-death required minimum distributions (RMDs).

LO #2: Identify how the obligation of beneficiaries to take post-death withdrawals varies depending on the type of beneficiary.

LO #3: Identify the steps to take to comply with various obligations that beneficiaries face when inheriting retirement accounts.

LO #4: Identify pre-death strategies for retirement account owners to consider when trying to minimize future beneficiaries’ obligation to take withdrawals.

LO #5: Identify the ongoing tax-deferral benefits of inherited retirement accounts.

• CFP / IMCA: Advanced
• NASBA: Basic

• CFP: General Principles of Financial Planning / Investment Planning / Retirement Planning
• NASBA: Specialized Knowledge (Personal Financial Planning)

• 1.5 CFP hours
• N/A NASBA hours

The fundamental benefit of a traditional pre-tax retirement account is the opportunity to enjoy tax-deferred growth. However, if withdrawals aren’t happening, eventually the government will require that a minimum amount of distributions begin (and become taxed), under the so-called “Required Minimum Distribution” (RMD) rules. In this white paper, we examine that while it’s always desirable to minimize and defer taxation to the extent possible, it’s important to recognize that a pre-tax IRA will be taxed eventually. Which means managing RMDs doesn’t avoid taxation, although it can provide at least some tax deferral value.

LO #1: Identify the age at which RMDs must begin.

LO #2: Identify the timing at which RMDs must begin.

LO #3: Identify RMD requirements for Roth 401(k) and Roth IRA accounts.

LO #4: Identify the method for calculating RMDs.

LO #5: Apply the RMD aggregation rule considering varying types of retirement accounts.

LO #6: Identify the method for calculating an RMD on a deferred annuity with a guaranteed benefit rider.

• CFP / IMCA: Advanced
• NASBA: Basic

• CFP: General Principles of Financial Planning / Investment Planning / Retirement Planning
• NASBA: Specialized Knowledge (Personal Financial Planning)

• 1.5 CFP hours
• N/A NASBA hours

Financial planners can learn an immense amount of information about a client’s circumstances by reviewing an individual income tax return. However, the reality is that the complexity of a tax return doesn’t conform neatly to typical income tax planning strategies. In this white paper, we look line-by-line at the key parts of an individual income tax return, which lines and sections should commonly be reviewed, and the sorts of tax planning strategies (or potential tax problems) that can be identified by reviewing a tax return.

LO #1: Identify the various sections of the 1040 tax form and what information is contained within them.

LO #2: Understand the difference between “above the line” and “below the line” deductions.

LO #3: Explain how AMT is determined and when a taxpayer would be subject to it.

LO #4: Discuss the steps involved in reviewing a family’s tax return and what to look for when doing so.

LO #5: Discuss the special tax planning considerations that would applicable when reviewing a self-employed business owner’s tax return.

LO #6: Discuss the special tax planning considerations that would be applicable when reviewing a retiree’s tax return.

• CFP / IMCA: Advanced
• NASBA: Basic

• CFP: General Principles of Financial Planning / Investment Planning / Retirement Planning
• NASBA: Specialized Knowledge (Personal Financial Planning)

• 1.5 CFP hours
• N/A NASBA hours

In this month’s newsletter we look in depth at strategies to maximize the value of tax-free Roth accounts, from doing “backdoor Roth” IRA contributions and “mega” backdoor Roth contributions through an after-tax 401(k), to doing systematic partial Roth conversions (into multiple accounts to take advantage of the Roth recharacterization rules), and why every client should get a Roth account started, even if just with a $100 contribution or conversion, to start the infamous 5-year clock for getting future tax-free Roth distributions!

LO #1: Identify the four factors that determine when a Roth IRA is the best option.

LO #2: Demonstrate a comprehensive understanding of the “Backdoor Roth” strategy and discuss how it helps high income earners contribute to a Roth IRA.

LO #3: Describe how to maximize the use of low tax brackets with partial Roth conversions.

LO #4: Clarify the separate account rules for Roth recharacterizations.

LO #5: Discuss how clients can use multiple accounts for potential recharacterization

LO #6: Explain how you can help a client satisfy the 5-year rule for tax free qualified Roth distributions

• CFP / IMCA: Advanced
• NASBA: Basic

• CFP: General Principles of Financial Planning / Investment Planning / Retirement Planning
• NASBA: Specialized Knowledge (Personal Financial Planning)

• 1.5 CFP hours
• N/A NASBA hours

In this issue of The Kitces Report, we explore the issues to consider when evaluating the benefits and economic impact of various Social Security claiming strategies, from the importance of understanding who is eligible for benefits in the first place, to the breakeven analysis needed in deciding when to claim the Social Security benefits! We also look at how crucial, and complicated, Social Security planning is for couples. As a result, it’s necessary to gather and consider the full range of client goals and preferences to optimize Social Security planning solutions, rather than just focus on the strategy that gives the most amount of money by delaying all the way until 70, or pays the client immediately at age 62. Finally, we wrap up by identifying the various Social Security “reform” proposals, and consider how potential changes to Social Security in the future should impact the claiming decision.

LO #1: Clarify who is entitled to Social Security benefits and be able to calculate the Social Security benefit your clients will receive. Be able to explain the difference between, and understand the meanings of, the acronyms AIME, PIA, and COLA.

LO #2: Describe what the Full Retirement Age (FRA) is and explain how choosing dates to receive Social Security benefits that are before or after the FRA impact the benefit amount.

LO #3: Illustrate an understanding of the cost/benefit analysis on the decision to delay Social Security benefits. Be able to calculate the additional benefit received for delaying while also calculating the time to break even. Explain why there might be times when clients may not want to delay Social Security benefits.

LO #4: Identify the three unique factors that drive the relative benefit of delaying Social Security benefits and explain how these factors act as a hedge to a portfolio.

LO #5: Discuss why Social Security planning is more complicated for couples than individuals. Understand what a restricted application for spousal benefits is, and identify when these might be relevant. Identify challenges that pertain to couples in timing Social Security benefits.

LO #6: List the four key options for couples claiming Social Security benefits.

LO #7: Understand when the Social Security “Earnings Test” applies, and to whom it applies. Explain the impact it can have on your client’s benefits.

LO #8: Identify the various Social Security “reform” proposals that have been presented and explain how future reforms could impact the optimal claiming decision.

• CFP / IMCA: Advanced
• NASBA: Basic

• CFP: General Principles of Financial Planning / Investment Planning / Retirement Planning
• NASBA: Specialized Knowledge (Personal Financial Planning)

• 1.5 CFP hours
• N/A NASBA hours

In this issue of The Kitces Report, we explore the issues to consider when evaluating the benefits and economic impact of various financial planning strategies, from the importance of deciding how to measure the outcomes in the first place, to the challenging “compared to what” problem that makes it difficult to objectively assess the value of a particular financial planning recommendation and whether or by how much it will actually improve the outcome. We also look at how many financial planning strategies reduce risk enough to make them viable strategies, even though the economic impact is actually negative! As a result, it’s necessary to gather and consider the full range of client goals and preferences to optimize financial planning solutions, rather than just focus on (positive) economic value alone.

LO #1: Discuss why being able to quantify the economic benefits of financial advice is important to both you as the financial planner, and your clients.

LO #2: Clarify the importance of accurately measuring the economic outcome that is desired. Explain how selecting financial planning strategies should be aligned with the desired outcomes.

LO #3: Explain the “compared to what” problem. Illustrate an understanding of the fundamental issues when trying to assess the economic impact of a financial planning recommendation.

LO #4: Be able to evaluate research in previous studies. Explain the inherent issues of the prior studies on the financial impact of various financial planning strategies. Discuss how baseline assumptions influence the result of the prior studies, how risk management might reduce returns but reduces long-term risk significantly, and how and why “tax alpha” is different from investment alpha.

LO #5: Identify the three primary reasons as to why it is difficult to calculate the economic impact of a financial planning recommendation. Discuss how the economic consequences of financial planning strategies are relative to the client.

LO #6: Explain why and how behavioral coaching may be the greatest economic impact to a client, the significance of interpersonal communication, and why it is so difficult to measure and assess its impact.

• CFP / IMCA: Intermediate/Advanced
• NASBA: Basic

• CFP: General Principles of Financial Planning / Investment Planning / Retirement Planning
• NASBA: Specialized Knowledge (Personal Financial Planning)

• 1.5 CFP hours
• N/A NASBA hours

In this month’s newsletter, we take a deep dive into rebalancing, looking at where it actually does enhance returns, where it’s better as a risk management strategy, why a “tolerance bands” approach to rebalancing may be more effective than just doing rebalancing at regular time intervals, and why rebalancing is still be worth doing in the long run, notwithstanding all of these challenges!

LO #1: Explain how regular rebalancing can actually decrease long-term returns of a portfolio.

LO #2: Discuss the concept of a “rebalancing bonus” and how one might successfully go about achieving it.

LO #3: Describe how “tolerance bands” work and why it is that they might be more effective when rebalancing when compared to regular time intervals.

LO #4: Illustrate an understanding of the differences between absolute and relative rebalancing thresholds and how each of them impact rebalancing targets.

LO #5: Be able to explain how those that are currently saving, or are in retirement and making withdrawals, can rebalance without requiring any tax-triggering trades.

LO #6: Discuss why rebalancing might be behaviorally difficult for clients to implement.

• CFP / IMCA: Advanced
• NASBA: Basic

• CFP: General Principles of Financial Planning / Investment Planning / Retirement Planning
• NASBA: Specialized Knowledge (Personal Financial Planning)

• 1.5 CFP hours
• N/A NASBA hours

In this month’s newsletter, we continue the discussion from last month’s newsletter and look in depth at the strategies that would merit the use of a trust as the beneficiary of a retirement account, and how a trust-as-beneficiary-of-an-IRA plays out with most popular types of trusts such as bypass, marital QTIP, spendthrift, or asset protection.

LO #1: Explain the challenges when qualifying a “See-Through” Trust as a designated beneficiary.

LO #2: Discuss why a “conduit” trust as a designated beneficiary of a retirement account may be problematic.

LO #3: Describe why it is crucial to monitor the beneficiaries of an “accumulation” trust as a designated beneficiary.

LO #4: Be able to identify the most common types of trusts that may end out as the beneficiary of a retirement account.

LO #5: Explain why, when leaving retirement account assets to a trust, it is generally a good idea to directly name the trust (or substrust) as a beneficiary.

• CFP / IMCA: Advanced
• NASBA: Basic

• CFP: General Principles of Financial Planning / Investment Planning / Retirement Planning
• NASBA: Specialized Knowledge (Personal Financial Planning)

• 1.5 CFP hours
• N/A NASBA hours

In this month’s newsletter, we look in depth at the issues involved in naming trusts as beneficiaries of retirement accounts, from the requirements for the trust to qualify as a “designated beneficiary” eligible for stretch treatment based on the underlying beneficiaries, to which beneficiaries must be considered for stretch purposes based on whether the trust is treated as a “conduit” or “accumulation” trust, and also the income tax ramifications of choosing to use a situation in such situations. In next month’s newsletter, we will continue the discussion with an exploration of the substantive planning issues and opportunities of using a trust as the beneficiary of a retirement account, and how a trust-as-beneficiary-of-an-IRA plays out with most popular types of trusts such as bypass, marital QTIP, spendthrift, or asset protection.

LO #1: Explain how Required Minimum Distributions (RMDs) are calculated (noting when to use the Joint Life Expectancy Table instead of the Uniform Lifetime Table) and when they are due. Also be able to distinguish between the Required Beginning Date (RBD) of the RMDs and the other due dates thereafter.

LO #2: Compare the various types of beneficiaries and how the stretch IRA is calculated for each.

LO #3: Demonstrate a comprehensive understanding of the specific requirements trusts must meet in order to be designated beneficiaries of an IRA.

LO #4: Illustrate how a conduit trust varies from an accumulation trust and describe how the stretch IRA is calculated for both. Recognize the one type of beneficiary that can be ignored in an accumulation trust and explain why.

LO #5: Apply, illustrate, and explain the income tax ramifications of RMDs received by a trust as well as RMDs received by a trust and passed through to the beneficiary.

• CFP / IMCA: Advanced
• NASBA: Basic

• CFP: General Principles of Financial Planning / Investment Planning / Retirement Planning
• NASBA: Specialized Knowledge (Personal Financial Planning)

• 1.5 CFP hours
• N/A NASBA hours

In this month’s newsletter, we delve further into the longevity annuity, comparing it more directly to alternatives like immediate annuities, delaying Social Security, or simply investing in equities for the long run. We also look at some of the additional risks and caveats that longevity annuities face, both for those considering whether to purchase them, and for the annuity companies that issue them. Ultimately, the goal is to evaluate when and whether longevity annuities should be purchased for clients, and in what circumstances they can best fit as part of the retirement income puzzle.

LO #1: Define who longevity annuities might work best for and describe the material risk associated with longevity annuities.

LO #2: Be able to explain why Social Security is essentially a form of a longevity annuity and why it is superior to other longevity annuities.

LO #3: Be able to compare and contrast the Internal Rate of Returns (IRRs) on equities to those of longevity annuities and explain to a client the difference/purpose of an investment versus an insurance/risk management product.

LO #4: Understand and explain the importance of the credit quality of the insurer when reviewing longevity annuities as well as the risk to both the insured and the insurer.

LO #5: Be able to identify and explain the other risks of longevity annuities, particularly for the insurance companies.

LO #6: Explain why a retirement account may be the most favorable location to purchase and hold a longevity annuity.

• CFP / IMCA: Advanced
• NASBA: Basic

• CFP: General Principles of Financial Planning / Investment Planning / Retirement Planning
• NASBA: Specialized Knowledge (Personal Financial Planning)

• 1.5 CFP hours
• N/A NASBA hours

With a rising number of baby boomers facing retirement, and a rather volatile market over the past two decades, there has been an increasing interest in the use of annuity products to provide safe and secure income in retirement – with the unfortunate caveat that the simplest options like immediate annuities have generally been unpopular, and the more complex alternatives like variable annuities with living benefit riders have been criticized that many buyers may be misunderstanding what really is and isn’t guaranteed in the first place. In the past few years, a new type of annuity solution has emerged, dubbed the “longevity annuity”, which seeks to avoid carving a large portion of a portfolio into an illiquid immediate annuity, while also avoiding the complexity of variable annuity (and more recently, equity-indexed annuity) income guarantees. In this month’s newsletter, we explore the concept of longevity annuities, what they are and how they work, and where they may fit into the retirement income puzzle (especially as a longevity hedge). In next month’s newsletter, we’ll continue in further depth into the analysis of longevity annuities, how they compare to other types of retirement income strategies and approaches, and the caveats that must be considered when trying to fit them into a retirement income strategy.

LO #1: Compare and contrast the similarities and differences between longevity annuities and immediate annuities.

LO #2: Be able to accurately list and define the three components of annuity payments.

LO #3: Explain the concept of mortality credits and illustrate how they impact the annuity payment stream.

LO #4: Accurately explain the various choices a client has when considering the purchase of a longevity annuity and illustrate how those choices may impact the payments from the annuity (i.e. impact of when payments begin and/or refund guarantees).

LO #5: Understand how the inflation-adjustment feature on longevity annuity payments works.

LO #6: Describe the how the income payments from longevity annuities are taxed.

• CFP / IMCA: Advanced
• NASBA: Basic

• CFP: General Principles of Financial Planning / Investment Planning / Retirement Planning
• NASBA: Specialized Knowledge (Personal Financial Planning)

• CFP hours
• NASBA hours

For the purposes of this month’s newsletter, we will focus specifically on the tax treatment of nonqualified, deferred annuities (regardless of whether they are fixed or variable, as that does not directly impact the tax treatment).

LO #1: Explain the primary tax preference for deferred annuities still in the accumulation stage while also recognizing the caveat to this tax benefit.

LO #2: Understand and articulate the taxation of distributions from an annuity.

LO #3: Explain the tax situation that occurs when a deferred annuity is surrendered for an amount that is less than the original basis.

LO #4: Describe when post-death distributions must begin for an annuity and explain the unique complications that may result for jointly held annuity contracts.

LO #5: Be able to list and explain the distribution options for the various types of beneficiaries (i.e. spousal, non-spousal, and Trust).

LO #6: Understand the importance of knowing the rules of your client’s particular annuity contract and their annuity company prior to a death occurring.

• CFP / IMCA: Advanced
• NASBA: Basic

• CFP: General Principles of Financial Planning / Investment Planning / Retirement Planning
• NASBA: Specialized Knowledge (Personal Financial Planning)

• 1.5 CFP hours
• N/A NASBA hours

In this month’s newsletter, we take a deeper dive into asset location concepts and strategies, including a look at how the introduction of Roth-style accounts adds further complexity, the potential to “create” new asset location accounts (e.g., non-qualified deferred annuities) to take advantage of tax-deferral, and how viewing investments on an after-tax basis can impact not only the asset allocation itself but also the after-tax volatility of an investment that can itself further change asset location priorities. In addition, we also look at some of the practical implementation challenges, and some of the client psychology and communication issues that arise in trying to effectively implement asset location.

LO #1: Decipher which high-return investments belong in taxable versus retirement accounts based on their tax efficiency.

LO #2: Explain when and why high-return, tax-efficient investments should be placed inside a Roth IRA instead of a Traditional IRA and/or taxable brokerage account.

LO #3: Be able to describe when asset location should not be performed and why.

LO #4: Clearly illustrate why it is that an investor’s asset allocation on an after-tax basis may be materially different than their current, before-tax allocation.

LO #5: Articulate to client’s the importance of viewing assets as a household, while also mentally “accounting” for separate accounts in order to help clients overcome the psychological impact of some accounts not performing as well as others.

LO #6: Establish and maintain an asset location priority list.

• CFP / IMCA: Advanced
• NASBA: Basic

• CFP: General Principles of Financial Planning / Investment Planning / Retirement Planning
• NASBA: Specialized Knowledge (Personal Financial Planning)

• 1.5 CFP hours
• N/A NASBA hours

In this month’s newsletter, we explore the concept of asset location and its prospective benefits when executed well, along with examining the available research on how to make the best decisions regarding asset location when taking into account the tax treatment of the available accounts, the tax treatment of the chosen investments, and the expected risks and returns of those investments.

LO #1: Decipher between which type of account (taxable or retirement) equities and bonds, respectively, should be held in and explain why.

LO #2: Describe why equity turnover and ongoing dividends erodes much of the value of tax deferral that is normally associated with buy-and-hold strategies.

LO #3: Explain why tax efficiency doesn’t matter all that much when expected returns are low.

LO #4: Construct an asset location priority list based on high-return assets and their level of tax efficiency.

LO #5: Be able to illustrate the “outside-in” concept for building a portfolio based on asset location.

• CFP / IMCA: Advanced
• NASBA: Basic

• CFP: General Principles of Financial Planning / Investment Planning / Retirement Planning
• NASBA: Specialized Knowledge (Personal Financial Planning)

• 1.5 CFP hours
• N/A NASBA hours

Given the difficult ongoing investment environment, investors have increasingly been turning to various “alternatives” to support portfolio growth and manage risk, aided in no small part by a technological revolution that makes analytically complex strategies that would have been impossible 30 years ago, and difficult 15 years ago, easily implemented in today’s marketplace. A recent example of this trend is risk parity investing. Notwithstanding its long conceptual roots dating back to Markowitz, and favorable performance since the 1990s, risk parity investing has only really begun to gain momentum in the past few years. In this newsletter, we look at what risk parity investing really is (and what it’s not), the opportunities, risks, and practical challenges in implementing such strategies, and whether risk parity investing ultimately represents a short-term investing fad, or an emerging shift in how portfolios are constructed.

LO #1: Explain the fundamental principal of risk parity portfolios. Additionally, recognize that an even split of capital amongst many asset classes does not necessarily reduce risk.

LO #2: Describe how the use of leverage in a risk parity portfolio that is truly well-diversified may still be less risky than a concentrated portfolio in a limited number of risky assets.

LO #3: Illustrate an understanding of the proactive monitoring process that risk parity portfolios entail and why the proactive monitoring is necessary.

LO #4: Explain how the risk parity portfolios performed when backtested and why their extensive diversification may help the portfolios in rising rates and inflation but hurt in times when equities have considerable growth.

LO #5: List the caveats and concerns relevant to risk parity portfolios.

• CFP / IMCA: Advanced
• NASBA: Basic

• CFP: General Principles of Financial Planning / Investment Planning / Retirement Planning
• NASBA: Specialized Knowledge (Personal Financial Planning)

• 1.5 CFP hours
• N/A NASBA hours

September/October issue of The Kitces Report on the new health insurance mandate rules for both employers and individuals, how the tax penalties are determined, and how to navigate, avoid, or at least plan for them. In addition, we look at how the presence of these new insurance mandates begin to change the decision-making process for employers considering whether to offer coverage, individuals seeking health insurance, and the overall financial planning decisions we can make when there’s not only a guarantee that health insurance will be available regardless of employment status, but in fact there’s a penalty for failing to be insured in the first place.

LO #1: Clearly articulate the risk that is born by offering health insurance coverage without any underwriting limitations.

LO #2: Calculate the “Individual Shared Responsibility Tax” (ISRT) that would apply to individuals who do not obtain health insurance coverage.

LO #3: Explain the premium assistance tax credit that was established by the Affordable Care Act and how an individual (or family) can qualify for the credit.

LO #4: Describe the how and why the new health insurance exchanges may impact the long-term cost of the program for the Federal government.

LO #5: Define, explain, and be able to calculate the “Employer Shared Responsibility Tax” (ESRT) and why illustrate why a company may just pay the ESRT rather than provide employer-provided health insurance.

LO #6: Be able to articulate to clients how the new health insurance exchanges work and the new rules and regulations clients must now navigate.

• CFP / IMCA: Advanced
• NASBA: Basic

• CFP: General Principles of Financial Planning / Investment Planning / Retirement Planning
• NASBA: Specialized Knowledge (Personal Financial Planning)

• 1.5 CFP hours
• N/A NASBA hours

July-August 2013 issue of The Kitces Report on the New World of Health Insurance, including the new health insurance coverage rules, the rollout of new health insurance exchanges, and the series of new tax credits and cost subsidies that will be available to those obtaining coverage on a health insurance exchange

LO #1: Explain the pros and cons of the new series of “essential health benefits” (i.e. minimum level of coverage).

LO #2: List the four standardized types of plans and describe what premiums will be based on.

LO #3: Explain the premium assistance tax credit that was established by the Affordable Care Act and how an individual (or family) can qualify for the credit.

LO #4: Describe who qualifies for the Federal cost-sharing subsidies and the subsidies will further reduce the net out-of-pocket limits and costs of health insurance plans.

LO #5: Explain, and be able to calculate, how an increase in income causes the premium assistance tax credit to be phased out and how that increases one’s marginal tax rate.

LO #6: Be able to articulate to clients how the new health insurance exchanges work and the new rules and regulations clients must now navigate.

• CFP / IMCA: Advanced
• NASBA: Basic

• CFP: General Principles of Financial Planning / Investment Planning / Retirement Planning
• NASBA: Specialized Knowledge (Personal Financial Planning)

• 1.5 CFP hours
• N/A NASBA hours

January-February 2013 issue of The Kitces Report newsletter on the now-permanent rules for portability and the planning implications that carryover of a deceased spouse’s estate tax exemption will have on the use of bypass trusts.

LO #1: Be able to explain the “permanent” changes made to the estate tax system with the passage of the American Taxpayer Relief Act of 2012.

LO #2: Discuss why the portability of the estate tax exemption renders the bypass trust as no longer necessary as it pertains to preserving a deceased spouse’s estate tax exemption.

LO #3: Be able to identify and list the many situations in which it still makes sense to use a bypass trust.

LO #4: Describe the necessary requirements in order to elect for portability.

LO #5: Explain and list the potential significant direct and indirect costs of the decision to keep using a bypass trust.

LO #6: Help clients analyze and weight the trade-offs between adverse income tax consequences versus the bypass trust planning benefits.

• CFP / IMCA: Advanced
• NASBA: Basic

• CFP: General Principles of Financial Planning / Investment Planning / Retirement Planning
• NASBA: Specialized Knowledge (Personal Financial Planning)

• 1.5 CFP hours
• N/A NASBA hours

September-October 2012 issue of The Kitces Report on “The Rising Popularity Of Hybrid Long-Term Care Policies” including an analysis of how the policies and benefits are structured, the current tax laws that apply, where and how the policies are being used, and whether they represent a “good deal” or not at the end of the day.

LO #1: Explain why there has been an increased popularity of hybrid long-term care policies.LO #2: Describe how hybrid long-term care policies are typically funded and what happens if the policy is never used.

LO #2: Describe how hybrid long-term care policies are typically funded and what happens if the policy is never used.

LO #3: Illustrate an understanding of the tax laws regarding hybrid long-term care insurance policies.

LO #4: Identify and list the embedded guarantees of hybrid life/LTC policies and compare those to hybrid annuity/LTC policies

LO #5: Be able to explain the important caveats to hybrid LTC policies.

LO #6: Account for and calculate the opportunity cost of tying up funds inside of a hybrid LTC policy as compared to investing the funds separately and using those funds to pay ongoing traditional LTC policy premiums.

LO #7: Explain who should and should not consider the purchase of a hybrid LTC policy.

• CFP / IMCA: Advanced
• NASBA: Basic

• CFP: General Principles of Financial Planning / Investment Planning / Retirement Planning
• NASBA: Specialized Knowledge (Personal Financial Planning)

• 1.5 CFP hours
• N/A NASBA hours

In this issue of The Kitces Report, we look back and review the past 20 years of safe withdrawal rate literature, in an effort to better understand the major revelations and research innovations, and arrive at some conclusions about what this entire body of research can tell us today about what is and isn’t a safe, sustainable portfolio withdrawal.

LO #1: Be able to explain what the safe withdrawal rate is, who first published the idea, how it is determined, and what assumptions are necessary.

LO #2: Show an understanding of how the safe withdrawal rate is influenced by time horizon, taxation, expenses, risk tolerance, and market valuation.

LO #3: Describe how diversification influence the safe withdrawal rate, and why it may be difficult to determine the exact amount of the influence. Discuss why asset allocation glide paths may not actually be beneficial.

LO #4: Explain how the ability, or inability, to be flexible with spending impacts the initial safe withdrawal rate.

LO #5: Clarify the impact that annuitizing a portion of a portfolio may influence the withdrawal rate. Identify the potential benefits and risks of this strategy.

LO #6: Discuss the limitations of prior research on safe withdrawal rates. Identify the many other considerations that should be accounted for when analyzing safe withdrawal rates.

LO #7: Be able to understand and evaluate the prior research on safe withdrawal rates.

• CFP / IMCA: Advanced
• NASBA: Basic

• CFP: General Principles of Financial Planning / Investment Planning / Retirement Planning
• NASBA: Specialized Knowledge (Personal Financial Planning)

• 1.5 CFP hours
• N/A NASBA hours

In this issue of The Kitces Report, we look at some of the information that was taught during the 2010 “Life Cycle Investing for Financial Planners” during July 26-28, 2010, in Boston, MA. In doing so, we attempt to understand whether and how some aspects of financial planning might be changed, or improved, by incorporating some of the life cycle finance economics perspectives.

LO #1: Be able to explain what Life Cycle Finance is and why it is important to understand as a financial planner.

LO #2: Discuss what utility and utility function are. Explain why they are important considerations in financial planning, and why humans tend to exhibit a tendency for diminishing marginal utility of consumption.

LO #3: Describe how using TIPS as a baseline strategy for optimizing lifetime consumption is an ideal strategy. Explain why someone might consider using the strategy of annuitization, and discuss how the use of options can help mitigate risk.

LO #4: Illustrate how human capital changes over time. Identify the various factors that impact a client’s human capital. Explain how financial planners can begin integrating human capital into their practices. Define total wealth.

LO #5: Discuss the implications for the financial planning profession. Identify the caveats and concerns that need to be considered under the life cycle framework.

• CFP / IMCA: Intermediate
• NASBA: Basic

• CFP: General Principles of Financial Planning / Investment Planning / Retirement Planning
• NASBA: Specialized Knowledge (Personal Financial Planning)

• 1.5 CFP hours
• N/A NASBA hours

Many financial planners do not necessarily have a firm grasp on what tax rates are really associated with certain levels of income, and often underestimate marginal tax rates and overestimate effective tax rates. In this month’s issue of The Kitces Report, we review some of the foundations of tax principles, looking primarily through a lens towards their impact on marginal and effective tax rates. We also look at what kinds of tax rates really occur at varying levels of income.

LO #1: Be able to explain how to identify what your tax rate really is. Discuss how income tax brackets are used, and how you arrive at taxable income.

LO #2: Illustrate an understanding of marginal tax rates. Describe how you arrive at the marginal tax rate, and why there is more to them than meets the eye.

LO #3: Describe how dividends and capital gains are taxed, specifically qualified dividends and long-term capital gains. Discuss how they are applied under the tax bracket tables themselves.

LO #4: Explain how the Alternative Minimum Tax (AMT) system works. In doing so, identify the various tax rates, the exemption amounts, and discuss how capital gains and qualified dividends are treated. Show an understanding of where it is applied on the tax return.

LO #5: Estimate the marginal and effective tax rates for your clients.

• CFP / IMCA: Advanced
• NASBA: Basic

• CFP: General Principles of Financial Planning / Investment Planning / Retirement Planning
• NASBA: Specialized Knowledge (Personal Financial Planning)

• 1.5 CFP hours
• N/A NASBA hours

In this month’s newsletter, we explore the necessary analytical framework to understand when and in what situations it may be more effective to contribute to a Roth IRA versus a traditional IRA and vice versa. By developing a series of rules and evaluating certain known exceptions to those rules, and by exposing certain myths along the way, planners can more clearly evaluate when a Roth IRA contribution (or conversion) may or may not be effective for a particular client situation, to maximize long-term wealth accumulation.

LO #1: Explain the basic tax rules of a Traditional IRA, a Roth IRA, and of Roth IRA conversions. Be able to explain to a client the situations in which they can withdrawal from a Traditional IRA penalty and tax-free. Calculate the amount a client can contribute to their IRAs, and explain why contribution totals are taken together.

LO #2: Be able to compare and contrast a Roth IRA versus a Traditional IRA. Illustrate when it might make sense for a client to utilize a Roth Conversion strategy. Describe the “tax equivalency principle”.

LO #3: Explain the exceptions to the Roth conversion/tax equivalency principle rules.

LO #4: Discuss how your client can apply the rules and exceptions as mentioned in this newsletter. Explain why forecasting future tax rates is important.

LO #5: Identify the strategies your clients can use to implement the rules around the decision to contribute to a Roth IRA versus a Traditional IRA, and whether or not to convert to a Roth IRA from a Traditional IRA.

• CFP / IMCA: Advanced
• NASBA: Basic

• CFP: General Principles of Financial Planning / Investment Planning / Retirement Planning
• NASBA: Specialized Knowledge (Personal Financial Planning)

• 1.5 CFP hours
• N/A NASBA hours

In this month’s newsletter, we explore the types of financial planning fees that are and are not deductible, the ways in which fees can be paid and how it affects their deductibility, and some unique tax complications that can arise as financial planning fees are paid. In a separate section at the end of the newsletter, we also cover some recent developments on the 2009 waiver of required minimum distributions and changes to the rules for non-spouse beneficiary rollovers from employer retirement plans in 2010.

LO #1: Explain the technical rules for deducting payments for advice. Be able to identify the three prongs of IRC Section 212 and understand what does and does not qualify as a deductible financial planning-related expense.

LO #2: Identify the three methods in which you can go about allocating payments for advice and discuss when it makes sense to do each of the methods.

LO #3: Describe what the limitations of the deduction are, who is impacted, and why there is no tax downside to claiming the maximum possible fee deduction.

LO #4: Illustrate an understanding of the additional issues regarding retirement accounts, specifically the rules around which accounts can be used to pay for planning fees. Define what a prohibited transaction is.

LO #5: Identify which types of accounts were affected by the waiver of RMDs for 2009 via the Worker, Retiree, and Employer Recovery Act (WRERA) of 2008. Explain how the wavier affects the 5-year rule. Discuss who the wavier will not affect.

• CFP / IMCA: Intermediate
• NASBA: Basic

• CFP: General Principles of Financial Planning / Investment Planning / Retirement Planning
• NASBA: Specialized Knowledge (Personal Financial Planning)

• 1.5 CFP hours
• N/A NASBA hours

In this month’s newsletter we explore what economic value is (and is not) created by a tax loss harvesting transaction, as well as the complications, costs, and risks that arise when seeking to harvest tax losses.

LO #1: Understand the basic rules for tax loss harvesting, and explain the benefits of doing so.

LO #2: Discuss what a “Wash Sale” is, and identify any practical issues with, and other complications of, a wash sale.

LO #3: Describe the value of a harvested loss. Understand when value is created (or not created). Be able to measure the value of a harvested loss.

LO #4: Illustrate how to weigh the benefits of loss harvesting, and identify the three major costs/risks that must be taken into account when weighing the benefits.

LO #5: Recognize the major factors necessary to establish rules for loss harvesting.

 LO #6: Identify special situations and exceptions that may arise and be able to distinguish how to proceed should these special “factors” arise.

 LO #7: Be able to integrate all of the considerations factors discussed within the newsletter to create process/decision framework in which to implement with your clients.

• CFP / IMCA: Advanced
• NASBA: Basic

• CFP: General Principles of Financial Planning / Investment Planning / Retirement Planning
• NASBA: Specialized Knowledge (Personal Financial Planning)

• 1.5 CFP hours
• N/A NASBA hours

In this month’s newsletter we will explore in greater depth exactly what risk tolerance is and what we’re trying to measure, how it fits in with other aspects of a client’s overall risk profile, and to consider what’s required to truly design a quality measurement of risk tolerance.

LO #1: Describe the current and new risk tolerance paradigms. Differentiate between the two and discuss similarities.

LO #2: Distinguish risk capacity from risk attitude. Explain why it is important to do this under the new risk tolerance paradigm and how it influences portfolio, and goal, creation.

LO #3: Define what risk perception is. Explain how, and why it is constantly changing. Describe how behavioral finance has been incorporated into the world of finance. Define what heuristics is, and identify the common behavioral finance heuristics as they relate to risk perception in particular.

LO #4: Explain how risk attitude, capacity, and perception are integrated with each other to influence a client’s overall risk profile.

LO #5: Identify problems associated with risk tolerance questionnaires, explain how psychometrics can help improve such questionnaires, and discuss alternative approaches to measuring risk tolerance.

LO #6: Illustrate how you can utilize this information to create your client’s risk profile.

• CFP / IMCA: Intermediate
• NASBA: Basic

• CFP: General Principles of Financial Planning / Investment Planning / Retirement Planning
• NASBA: Specialized Knowledge (Personal Financial Planning)

• 1.5 CFP hours
• N/A NASBA hours

5/21/2018

This month we review the April 2018 blog posts, specifically the following four: (1) Why Households with Significant Debt Tend Not to Pay it Down, (2) 2018 Roth Conversion Planning After the Tax Cuts and Jobs Act, (3) Understanding TWR vs. IRR Return Calculation Methodologies in Performance Reporting Software, (4) The Problem with Benchmarking to Financial Planning Goals: Investor Results vs. Advisor Results

LO #1: Identify the issues of benchmarking.

LO #2: Identify and examine the different assumptions of the different ways a portfolio return can be calculated.

LO #3: Identify which portfolio return calculation makes the most sense for your situation.

LO #4: Identify the impacts resulting from Congress having passed Tax Cuts and Jobs Act.

LO #5: Identify strategies and concerns for clients in regard to the future use of Roth conversions.

LO # 6: Identify the way in which debt impacts a client’s resulting financial decision-making

Mental Accounting: The way individuals mechanically and predictably categorize assets, transitions and other financial information – which is often opposite of how they “should” think about financial information.

Bar Bell Strategy: Similar to a bond barbell strategy, one conversion will be done early and one conversion later in the year.

Tax Cuts & Job Act (TCJA): Passed on December 22^nd of 2017 this major tax reform closed the “loophole” on Roth recharacterizations. The TCJA eliminated the recharacterization of Roth IRA conversions made in 2018 or later.

Roth Conversion: This type of transaction can take place when the client has money in a traditional IRA and s/he decides to move it into a Roth IRA. The decision to make this move is based on when the client will be able to pay the least amount of taxes. When they put the money in or when they plan to take the money out.

Roth IRA: Like a traditional IRA, this is still an individual retirement account. However, instead of being taxed when the money comes out, Roth IRAs pay tax when the money goes in. Then, later, when the money comes out is not taxed, assuming withdrawals begin after 59 ½ and all growth in the account avoids taxation.

Roth recharacterization: Originally created to “undo” a Roth conversion for someone who later discovered they were over the conversion income limit.

Benchmarking: A standard by which other things can be measured or judged, and in the investment context a benchmark is used to evaluate advisor performance.

Basic rate of return: This is the total amount of growth divided by the initial account balance and it provides a simple, but not always accurate, measure of investment growth.

Time-weighted return: Measures the results of your overall investment strategy, model, or allocation, as it is applied to the portfolio.

Dollar-weighted rate of return: A more accurate measure of actual investment growth and results relative to the dollars that were invested both upfront and along the way.

• CFP / IMCA: Intermediate
• NASBA: Basic

• CFP: General Principles of Financial Planning / Investment Planning / Retirement Planning
• NASBA: Specialized Knowledge (Personal Financial Planning)

• 1.5 CFP hours
• 2.0 NASBA hours

This course will be available at least through December 31, 2018.

All of our courses are reviewed on a yearly basis and renewed or discontinued every December.

April 16, 2018

This month we review the March 2018 blog posts, specifically the following four: (1) Capital Gains Strategies For Highly Appreciated Investments After A Big Bull Market Run, (2) How Healthcare Sharing Programs Compare To Traditional Health Insurance, (3) Financial Planning Research Highlights From The 2018 CFP Board Academic Research Colloquium, and (4) The Favorable Tax Treatment Of Financial Advisor Commissions Over Fees After TCJA.

LO #1: Identify strategies for managing capital gains after a big bull market run.

LO #2: Identify differences between healthcare sharing programs and traditional insurance.

LO #3: Identify ways in which statistical decision aids can be misused.

LO #4: Identify how financial advisor commissions receive favorable tax treatment after TCJA.

LO #5: Identify factors advisors prioritize when making portfolio allocation recommendations.

Capital Gain: The value above the cost basis someone receives after the sale of an asset.

Capital Loss: The value below the cost basis someone receives after the sale of an asset.

Medicare surtax: Tax rate of 3.8% applied on investment income or the modified adjusted gross income above certain thresholds.

Call option: Investment vehicle that gives the holder the option to buy something, usually stocks, at a certain price.

Put option: Investment vehicle that gives the holder the option to sell something, usually stocks, at a certain price.

Monthly share: Healthcare sharing term equivalent for premium.

Eligible event: Healthcare sharing term equivalent for claim.

Incident: Healthcare sharing term equivalent for claim.

Illness: Healthcare sharing term equivalent for claim.

Personal responsibility: Healthcare sharing term equivalent for deductible.

Annual Household Portion: Healthcare sharing term equivalent for deductible.

Annual Unshared Amount: Healthcare sharing term equivalent for deductible.

Explanation of Sharing: Healthcare sharing term equivalent for Explanation of Benefits.

Monte Carlo Analysis: Simulation used to model the probability of different outcomes that cannot be easily predicted duo to the intervention of random variables.

Heuristic: based on experimentation, evaluation, or trial-and-error methods.

• CFP / IMCA: Intermediate
• NASBA: Basic

• CFP: General Principles of Financial Planning / Investment Planning / Retirement Planning
• NASBA: Specialized Knowledge (Personal Financial Planning)

• 2.0 CFP hours
• 3.0 NASBA hours

This course will be available at least through December 31, 2018.

All of our courses are reviewed on a yearly basis and renewed or discontinued every December.

3/16/2018

This month we review the February 2018 blog posts, specifically the following four: (1) Why Good Financial Behavior Isn’t Achievable Until You Believe That It Is, (2) Understanding The New Pass-Through Business Deduction for Qualified Business Income, (3) New Medicare Premium Surcharge Tier And Other Tax Implications Of The Bipartisan Budget Act of 2018, (4) Is College Most Valuable To Those Who Would Likely Be Successful Without It Anyway?

LO #1: Identify why self-efficacy differs from outcome expectancy.

LO #2: Identify how one might foster self-efficacy development in financial client relationships.

LO #3: Identify ways in which the Qualified Business Income deduction may apply to client’s individual situations.

LO #4: Identify tax consequences of the Bipartisan Budget Act of 2018.

LO #5: Identify the different ways in which higher education may be a benefit or a drawback.

Self-efficacy: One’s expectations of their ability to engage in a particular behavior, which is distinct from one’s expectations about the outcome of that behavior.

Outcome expectancy: A person’s estimate that a given behavior will lead to a certain outcome.

Positive Psychology: A domain of psychology dedicated to studying what makes people flourish, rather than focusing on mental illness.

PERMA: A framework outlined by Dr. Martin Seligman, the father of positive psychology, that posits that Positive emotion, Engagement, Relationships, Meaning and Achievement promote well-being.

Performance Accomplishments: Refers to the way in which we learn from our successes and failures in attempting a given task.

Vicarious Experience: Refers to the way in which we model our behaviors after those around us.

Verbal Persuasion: Refers to the way in which humans can motivate and influence one another – “You can do it. I believe in you”

Emotional Arousal: Refers to the ways in which our emotions can influence our confidence in our ability to be successful. Emotional arousal can either increase or decrease one’s self-efficacy.

Qualified Business Income Deduction: This deduction allows pass-through businesses to deduct up to 20% of their own net income against that income, effectively making them taxed on only 80 cents of each dollar they earn.

Qualified Business Income: The net income of the pass-through businesses after all business deductions have been claimed.

Medicare Modernization Act: A federal law passed in 2003, over-hauling Medicare with its most notable feature being entitlement benefits for prescription drugs; I.e. Medicare Part D prescription drug coverage, funded through high-income Medicare enrollees

Income-Related Monthly Adjustment Amount (IRMAA): The surcharges paid by high-income Medicare enrollees, based on Modified Gross Income.

Bipartisan Budget Act of 2018: The new law passed on Friday, February 9^th to avoid government shutdown, not only increased government spending and raised debt ceiling for two years, a number of tax provisions were also added.

Human Capital Theory: Developed by Gary Becker and Jacob Mincer – it is a theory that organizes and explains why people would choose to invest in themselves (going to college) in order to make themselves more competitive and therefore profitable in the labor market.

Signaling Theory: Developed by Michael Spence – it is a theory about how people (potential employees and potential employers) communicate their value to one another. Individuals use “signals” to tell other individuals that they possess traits that may or could be valuable (intelligence, work ethic, ect.).

• CFP / IMCA: Intermediate
• NASBA: Basic

• CFP: General Principles of Financial Planning / Investment Planning / Retirement Planning
• NASBA: Specialized Knowledge (Personal Financial Planning)

• 1.5 CFP hours
• 2.0 NASBA hours

This course will be available at least through December 31, 2018.

All of our courses are reviewed on a yearly basis and renewed or discontinued every December.

2/19/2018

This month we review the January 2018 blog posts, specifically the following five: (1) When It Pays To Pay Social Security Taxes, (2) Managing The “Theater” Of Financial Planning, (3) Acquisition And Home Equity Mortgage Interest Tax Deductibility After TCJA, (4) Do Losses Truly Loom Larger Than Gains, and (5) Timing Tax Savings With Deduction Lumping And Charitable Clumping.

LO #1: Identify circumstances in which the ROI on paying FICA taxes is higher.

LO #2: Identify ways in which an advisor’s personality may be signaled through their office.

LO #3: Identify tax deductibility of interest from mortgage and home equity indebtedness after TCJA of 2017.

LO #4: Identify why losses may not truly loom larger than gains.

LO #5: Identify how deduction lumping can increase total tax deductions.

FICA Taxes: Payroll taxes comprised of 6.2 percent Social Security tax and 1.45% Medicare tax.

Income Replacement Tier: Also known as “Social Security Bendpoints”, the points at which an individual’s income is replaced at a higher/lower level.

Earnings History: Amount of quarters in which an individual had sufficient earnings to earn credit for Social Security purposes.

Openness: Big Five personality trait which includes characteristics such as creativity and intellect.

Conscientiousness: Big Five personality trait which includes characteristics such as industriousness and orderliness.

Extraversion: Big Five personality trait which includes characteristics such as enthusiasm and assertiveness.

Agreeableness: Big Five personality trait which includes characteristics such as compassion and politeness.

Neuroticism: Big Five personality trait which includes characteristics such as withdrawal and emotional volatility.

Behavioral Residue: Ways in which evidence of one’s behavior accumulates within their environment.

Acquisition Indebtedness: Mortgage debt used to acquire, build, or substantially improve a taxpayer’s primary residence.

Loss Aversion: One’s tendency to prefer avoiding losses.

Risk Aversion: One’s tendency to prefer avoiding risk.

Endowment Effect: Tendency to value things we own more highly than things we don’t.

Status Quo Bias: Bias against change, or change perceived as a “loss”

Standard Deduction: The deduction all taxpayers can qualify for regardless of whether they itemize their taxes.

• CFP / IMCA: Intermediate
• NASBA: Basic

• CFP: General Principles of Financial Planning / Investment Planning / Retirement Planning
• NASBA: Specialized Knowledge (Personal Financial Planning)

• 2.0 CFP hours
• 3.0 NASBA hours

This course will be available at least through December 31, 2018.

All of our courses are reviewed on a yearly basis and renewed or discontinued every December.

1/7/2018

This month we review December 2017 blog post: Individual Tax Planning Under The Tax Cuts And Jobs Act Of 2017

LO #1: Identify the changes to AMT under the Tax Cuts and Jobs Act of 2017 (TJCA 2017).

LO #2: Identify the number of tax brackets under the TJCA 2017.

LO #3: Identify the new standard deduction under the TJCA 2017.

LO #4: Identify the deductibility of investment advisory fees under TJCA 2017.

LO #5: Identify the estate tax exemption under TJCA 2017.

Tax Cuts and Jobs Act of 2017 (TJCA of 2017): Tax reform enacted in 2017.

Alternative Minimum Tax (AMT): A mandatory alternative to the standard income tax system which eliminates some tax benefits for higher income taxpayers.

Pease limitation: A limitation of itemized deductions for some high-income taxpayers. The Pease limitation was replead under the TJCA of 2017.

Kiddie tax: An alternative tax rate applied to unearned income of children (under the age of 19, or full-time students under the age of 24). Under the TCJA of 2017, unearned income for children is now subject to trust tax rates.

Child Tax credit: A tax credit available to parents with children under the age of 17.

Estate Tax Portability: The ability for a second-to-die spouse to use any remaining exemption from estate taxes that the first-to-die spouse was eligible for but did not use.

First-in-First-Out (FIFO): A method of determining capital gains that requires that the first shares purchased are the first shares sold for tax purposes.

Charitable Lumping: A new tax strategy under the TJCA of 2017 whereby it may be more effective for those with modest charitable deductions to make several years’ worth in a single year so that they can capture more benefit from the deductions which may be harder due to the larger standard deduction.

Byrd Rule: Rule that specifies that legislation may be passed with a simple majority if it does not result in next tax cuts beyond 10-year period (otherwise it requires 60 votes).

Roth Recharacterization: A process of undoing prior conversions or contributions so that a contribution effectively would not have been made or that a Roth IRA would covert back to a traditional IRA. However, under the TJCA of 2017, recharacterizations of Roth conversions are no longer permitted.

CFP / IMCA: Intermediate
NASBA: Basic

• CFP: General Principles of Financial Planning / Investment Planning / Retirement Planning
• NASBA: Specialized Knowledge (Personal Financial Planning)

• 1.0 CFP hours
• 1.5 NASBA hours

This course will be available at least through December 31, 2018.

All of our courses are reviewed on a yearly basis and renewed or discontinued every December.

1/7/2018

This month we review the December 2017 blog posts, specifically the following three: (1) Strategies To Minimize Or Delay Required Minimum Distribution (RMD) Obligations, (2) Why Two Incomes Aren’t Always Better Than One, and (3) Volatility Drag And Its Impact On (Arithmetic) Investment Returns In Monte Carlo Analysis.

LO #1: Identify ways to delay required minimum distribution (RMD) obligations.

LO #2: Identify ways to minimize required minimum distribution (RMD) obligations.

LO #3: Identify how the non-linearity of earnings in some fields influences the decision to be a single- or dual-income household.

LO #4: Identify how having two incomes can decrease household financial stability.

LO #5: Identify the proper historical mean to use when conducting a Monte Carlo analysis.

Required Minimum Distribution (RMD): The amount that typically needs to be withdrawn from certain retirement account annually once an individual reaches age 70 ½.

Joint Life Expectancy: How long the longest living member of a couple may be expected to live based on actuarial data.

Uniform Life Table: The standard table used to determine RMD obligations unless the sole beneficiary is a spouse who is more than 10-years younger.

Qualified Longevity Annuity Contract (QLAC): A deferred annuity funded with an investment from a qualified retirement plan or IRA.

Mortality Credits: Excess payments from an annuity contract that are the result of other annuitants who die at a younger age.

Non-Linear Compensation: A compensation dynamic in some fields in which earnings do not increase and decrease in a linear fashion. Instead, relative to a full-time worker, workers who work double the hours tend to make more than double while workers who work half-time tend to make less than half.

Financial Fragility: How vulnerable a household is to a financial shock.

Financial Shock: An unexpected expense, decline in income, or other financial event that can be detrimental to a household.

Volatility Drag: A reduction in compound returns relative to the arithmetic average due to volatility.

Geometric Mean: The investment return which reflects the true return after accounting for sequence of returns and volatility.

Arithmetic Mean: A simple average of investment returns found by adding up all returns and dividing by the number of periods. Does not account for sequence of returns or volatility.

Variance: Standard deviation squared.

CFP / IMCA: Intermediate
NASBA: Basic

• CFP: General Principles of Financial Planning / Investment Planning / Retirement Planning
• NASBA: Specialized Knowledge (Personal Financial Planning)

• 1.0 CFP hours
• 1.5 NASBA hours

This course will be available at least through December 31, 2018.

All of our courses are reviewed on a yearly basis and renewed or discontinued every December.

1/7/2018

This month we review the November 2017 blog posts, specifically the following five: (1) Does Failed Retirement Income Planning Really Result In Bankrupt Financial Ruin? (2) Providing Small Business Health Insurance Benefits With A QSEHRA, (3) Financial Planning Research Highlights From The 2017 Academy of Financial Services Annual Meeting, (4) The Wealth-Limiting Risks Of Diversifying Too Soon – Redwoods, Bushes, and Pear Trees, and (5) New IRMAA Surcharges On Medicare Part B and Part D Taking Effect In 2018.

LO #1: Identify current trends in bankruptcies among retirees.

LO #2: Identify the unique characteristics of a QSEHRA for providing employee health benefits.

LO #3: Identify the value attributed to a gamma-efficient portfolio.

LO #4: Identify the risk of diversifying too soon

LO #5: Identify changes in IRMAA surcharges on Medicare Part B and Part D taking place in 2018.

Chapter 7 Bankruptcy: Also known as liquidation bankruptcy. This process entails having a debtors assets transferred to a bankruptcy estate, where the assets are liquidated to pay creditors, and any remaining (eligible) debts are discharged.

Chapter 13 Bankruptcy: Also known as reorganization bankruptcy. Chapter 13 does not involve liquidation, but instead aims to help debtors come up with plans to get on track and repay at least some of their debts.

Financial Fragility: The degree to which a small shock in a household’s income or expenses could have a big impact on their overall situation.

Debt-to-Income Ratio: Monthly debt payments divided by monthly income.

Financial Obligations Ratio: Debt service payments and financial obligations as a percentage of disposable personal income.

Qualifying Life Event: An event that would allow an employee to qualify for a Special Enrollment Period and be able to join a health plan outside of open enrollment.

Bush Investment Strategy: A slow and stable approach to investing which focuses on maintaining a highly diversified portfolio.

Pear Tree Investment Strategy: An investment strategy where investors attempt to diversify too early, potentially stunting investment growth.

Redwood Investment Strategy: Giving investments time to grow, potentially allowing them to become highly concentrated with the potential for tremendous growth.

Income-Related Monthly Adjustment Amount (IRMAA): An additional amount paid in monthly Medicare Part B and Part D premiums based on one’s modified adjusted gross income (MAGI).

• CFP / IMCA: Intermediate
• NASBA: Basic

• CFP: General Principles of Financial Planning / Investment Planning / Retirement Planning
• NASBA: Specialized Knowledge (Personal Financial Planning)

• 1.5 CFP hours
• 2.0 NASBA hours

1/7/2018

This month we review the October 2017 blog posts, specifically the following four: (1) Can We Trust Research On The Use And Benefits Of Financial Advisors?, (2) Rules For Calculating Required Minimum Distributions (RMDs) During Life, (3) What Is The Optimal Shape Of Retirement Planning – Curve, Triangle, Or Rectangle?, and (4) Spousal Rollover And Stretch Rules For Inherited Traditional And Roth IRAs.

LO #1: Identify limitations of the industry studies on the benefits of using a financial advisor.

LO #2: Identify formula for calculating required minimum distributions.

LO #3: Identify the different “shapes” of retirement planning.

LO #4: Identify spousal rollover rules for inherited IRAs.

LO #5: Identify limitations with the academic studies on the use of a financial advisor.

Vanguard’s Advisor Alpha: A metric used by Vanguard to attempt to quantify the value that financial advisors provide to their clients.

Morningstar’s Gamma: A metric used by Morningstar to attempt to quantify the value that financial advisors provide to their clients.

Psychic Income: A term used by economists to refer to non-financial psychological well-being.

Compared to What Problem: Trying to make a comparison without an adequate benchmark.

Publication Bias: The tendency for academic journals to publish studies with statistically significant results, therefore creating a bias against those with null results.

Uniform Life Table: A life table based on joint life expectancy of an account owner and a hypothetical beneficiary who is 10 years younger (regardless of the actual age of the beneficiary).

Three P’s of Retirement Planning: Refers to “possibilities”, “priorities”, and “portfolio”.

Spousal Rollover: Rollover of an IRA to an eligible spousal beneficiary.

• CFP / IMCA: Intermediate
• NASBA: Basic

• CFP: General Principles of Financial Planning / Investment Planning / Retirement Planning
• NASBA: Specialized Knowledge (Personal Financial Planning)

• 1.5 CFP hours
• 2.0 NASBA hours

1/7/2018

This month we review the September 2017 blog posts, specifically the following four: (1) The Challenges When Using A Funded Ratio To Track Progress Towards Retirement, (2) Predicting Wealth Building Behavior With DataPoints Assessment Tools, (3) What Inflation Rate Should You Assume For College Expense Planning, and (4) Risk Composure: The Real Predictor Of Who Can Stick To Their Investment Plan.

LO #1: Identify why the funded ratio can be a problematic metric to use in evaluating preparedness for retirement.

LO #2: Identify attributes of those with wealth building potential.

LO #3: Identify factors which may influence the inflation rate used in college expense planning.

LO #4: Identify the risk characteristic which may be more important than risk tolerance in determining commitment to an investment plan.

LO #5: Identify positive aspects of utilizing a funded ratio.

Funded Ratio: Current value of assets divided by the assets needed to fund the goal that is being pursued.

Biodata: Instead of asking people specifically about their personality, they’re asked about their personal biography and reflect on their past behaviors and traits.

529 Plan: A tax-advantaged education savings plan designed to encourage saving for future expense.

Expected Family Contribution (EFC): A measure of a family’s financial strength, used as a means to estimate their ability to support a child in funding their education.

Consumer Price Index (CPI): The price level of a basket of goods adjusted based on changes in the economy.

Risk Perception: An individual’s beliefs and thoughts about risk based on their understanding, which may not align with true risk.

Risk Tolerance: How much risk one is willing to accept.

Risk Composure: One’s ability avoid behavioral biases and ability to stay the course when their willingness to take risk is tested.

Recency Bias: The tendency to extrapolate the near-term past into the indefinite future.

Confirmation Bias: The tendency to selectively focus on information that reaffirms our existing views.

• CFP / IMCA: Intermediate
• NASBA: Basic

• CFP: General Principles of Financial Planning / Investment Planning / Retirement Planning
• NASBA: Specialized Knowledge (Personal Financial Planning)

• 1.0 CFP hours
• 1.5 NASBA hours

1/7/2018

This month we review the August 2017 blog posts, specifically the following five: (1) The Impact Of Early Retirement On Projected Social Security Benefits, (2) Why The Trusteed IRA May Be A Riskier Alternative To A Trust As IRA Beneficiary, (3) How The Human-to-Human Connection Helps Facilitate Positive Behavior Change, (4) Why Paying Yourself 5% Interest On A 401(k) Loan Is A Bad Investment Deal, and (5) New SEC Custody Rule Requirements For Advisors With Third-Party SLOA Authority.

LO #1: Identify the impact of early retirement on projected Social Security benefits.

LO #2: Identify why a trusteed IRA may be a riskier option than having a trust as an IRA beneficiary.

LO #3: Identify how prior research suggests social support influences behavior change.

LO #4: Identify why paying yourself 5% on a 401(k) loan may be a bad investment deal.

LO #5: Identify the conditions in which advisors who have SLOA authority would be required to have an annual surprise exam conducted.

Accountability Partner: A person who helps another person keep a commitment they made.

Trusteed IRA: An IRA account that is governed by a trust document.

Trust-as-Beneficiary: An election by an IRA account owner to name a trust as their beneficiary.

Social Security Full Retirement Age (FRA): Age at which an individual is entitled to their full Social Security benefit amount

Social Security Primary Insurance Amount (PIA): Full benefit amount a Social Security recipient is entitled to at their full retirement age.

Social Security Replacement Rates: Replacement rates of 90%, 32%, and 15% that decline as a covered workers income increases.

Average Indexed Monthly Earnings (AIME): The 35-year average of a covered individual’s earnings.

Social Security Wage Index Factors: The amounts used in order to inflate a worker’s historical earnings for the purposes of determining their AIME.

• CFP / IMCA: Intermediate
• NASBA: Basic

• CFP: General Principles of Financial Planning / Investment Planning / Retirement Planning
• NASBA: Specialized Knowledge (Personal Financial Planning)

• 1.5 CFP hours
• 2.0 NASBA hours

1/7/2018

This month we review the July 2017 blog posts, specifically the following four: (1) Does Monte Carlo Analysis Actually Overstate Tail Risk In Retirement Projections? (2) Why The Net Unrealized Appreciation (NUA) Rules Aren’t Always A Great Deal, (3) Choosing An Appropriate Discount Rate For Retirement Planning Strategies, and (4) The Complex Motivations Of Money And Retirement As The Freedom To Pursue Non-Monetary Work Rewards.

• 1.5 CFP hours
• 2.0 NASBA hours

LO #1: Identify the ways in which historical returns deviate from the assumptions of Monte Carlo analysis.

LO #2: Identify best practices for implementing an NUA strategy,

LO #3: Identify the proper discount rate for most retirees.

LO #4: Identify the effect cash bonuses had on productivity in Ariely’s study.

LO #5: Identify the historical return and standard deviation of a 60/40 portfolio from 1871 – 2015.

Fat Tail: Distribution with tails that are wider than those under a standard normal distribution.

Shapiro-Wilk Test: Used to examine whether a series of returns exhibit statistically significant deviation from a normal distribution.

Sequence of Returns: The order in which returns are actually experienced in retirement.

Mean Reversion: Periods in which low performance are followed by periods of higher performance, and vice-versa.

Momentum: Periods in which short-term positive returns are more likely to be followed by positive returns, and vice-versa.

Net Unrealized Appreciation: Appreciation of employer stock held within a retirement plan, which may be eligible for favorable tax treatment is IRS rules are followed.

Discount Rate: The rate used to discount future dollars to the present.

Intrinsic Motivation: Behavior which is motivated by internal rewards.

Extrinsic Motivation: Behavior which is motivated by external rewards.

• CFP / IMCA: Intermediate
• NASBA: Basic

• CFP: General Principles of Financial Planning / Investment Planning / Retirement Planning
• NASBA: Specialized Knowledge (Personal Financial Planning)

• 1.5 CFP hours
• 2.0 NASBA hours

1/7/2018

This month we review the June 2017 blog posts, specifically the following four: (1) Dynamic Retirement Spending Adjustments: Small-But-Permanent Vs Large-But-Temporary (2) Maximizing Tax Deductions For Long-Term Care (LTC) Insurance, (3) How Financial Counseling Laboratories Will Change Financial Planning, and (4) IRS Extends Portability Deadline (Retroactively) Under Rev. Proc. 2017-34.

LO #1: Identify the initial safe withdrawal rate impact of small-but-permanent versus large-but-temporary retirement spending adjustments.

LO #2: Identify the relative tax preference of different ways to purchase long-term care insurance.

LO #3: Identify ways in which financial counseling laboratories will enhance financial planning research.

LO #4: Identify the consequences of IRS Revenue Procedure 2017-34.

LO #5: Identify the impacts of a fixed vs. variable spending policy on initial withdrawal rates and spending stability.

Fixed Dollar Amount Spending Strategy: Spending a fixed amount each year in retirement, adjusted annually only for inflation. Lies at the least flexible end of the retirement spending strategy spectrum.

Fixed Percentage: Spending a fixed percentage of the portfolio each year in retirement, adjusted annually based on the current portfolio value. Lies at the most flexible end of the retirement spending strategy spectrum.

Hybrid Long-Term Care Insurance: Life insurance or annuity policy that includes a long-term care rider.

Financial Counseling Laboratory: A room suitable for meeting with clients set up with an unobtrusive means of observation for teaching or research purposes.

Cashless Matching Incentive: Discount card to local businesses given out as a matching percentage of funds saved by an individual.

Retroactive Portability: Automatic extension of filing for any estates of decedents who died since portability rules took effect after 2010 and missed the original filing deadline.

• CFP / IMCA: Intermediate
• NASBA: Basic

• CFP: General Principles of Financial Planning / Investment Planning / Retirement Planning
• NASBA: Specialized Knowledge (Personal Financial Planning)

• 1.0 CFP hours
• 2.0 NASBA hours

1/7/2018

This month we review the May 2017 blog posts, specifically the following five: (1) Excel Spreadsheet Productivity Tips For Financial Advisors (2) Calculating Accurate Regulatory AUM Vs Reporting Assets Under Advisement (AUA), (3) Emerging Software Solutions To Illustrate Safe Withdrawal Rates To Pre-Retirees, (4) Safe Savings Rates With Real-World Wage Increases Over Time, and (5) The Happiness Spending Threshold And What It Really Means To Live Within Your Means.

LO #1: Identify ways in which Excel can make an advisor more efficient.

LO #2: Identify the difference between regulatory AUM and AUA.

LO #3: Identify the fundamental ways in which new software solutions provide safe withdrawal rate analysis that differs from prior research.

LO #4: Identify the shape of a typical earnings curve over one’s lifetime.

LO #5: Identify the two primary ways to evaluate prudence of one’s spending.

Time Value of Money: The present value of money is higher than its future value.
Future Value: How much money is worth at some future date, based on an assumed rate of interest.
Present Value: How much future money is worth in the present, discounted by an assumed rate of interest.
Regulatory Assets Under Management (RAUM): Securities portfolios for which an advisor provides continuous and regular supervisory or management services.
Assets Under Advisement: The value of all assets that are touched by the advisor/client relationship.
4% Rule: A rule based on Bill Bengen’s research which states that a 4% inflation-adjusted withdrawal rate could sustain a 30-year retirement based on historical market returns in the U.S.
Dimson, Marsh, and Staunton Data: A data set which captures international historical market return data going back through 1900.
Safe Savings Rate: The amount of savings that are needed in order to fund a 30-year retirement period at a given spending rate.
Earnings Curve: The trajectory of one’s real earning over their career, typically increasing at a decreasing rate until approximately age 50 and then decreasing at a increasing rate until retirement.
Happiness Spending Threshold: The level at which additional income and spending doesn’t appear to actually improve emotional well-being, often found to be around $75,000.

• CFP / IMCA: Intermediate
• NASBA: Basic

• CFP: General Principles of Financial Planning / Investment Planning / Retirement Planning
• NASBA: Specialized Knowledge (Personal Financial Planning)

• 1.0 CFP hours
• 2.0 NASBA hours

1/7/2018

This month we review the April 2017 blog posts, specifically the following four: (1) Financial Planning Research Highlights From The 2017 CFP Board Academic Research Colloquium (2) The Taxation Of Reverse Mortgage Loan Proceeds And Interest Payments, (3) Dynamic Programming As A Methodology For Financial Planning Retirement Projections, and (4) Buying Happiness And Life Satisfaction With Greater Cash-On-Hand Reserves.

LO #1: Identify the relative propensity between men and women to use the services of a financial planner.

LO #2: Identify the schools which produced the most research for the 2017 CFP Academic Research Colloquium.

LO #3: Identify tax status of HECM reverse mortgage loan.

LO #4: Identify the primary difference between dynamic programming and Monte Carlo analysis.

LO #5: Identify the relationship between size of cash reserves and life satisfaction.

H-Index: A quantitative measure of productivity and impact of academic journals.

Solution-Focused Financial Therapy: A collaborative form of therapy focused on the future and setting goals to make a client’s situation better, rather than focusing on the past and where the client is struggling.

Qualified Longevity Annuity Contract (QLAC): A longevity annuity purchased using qualified assets, equal to the lesser of $125,000 or 25% of the value of an individual’s eligible qualified assets.

Home Equity Conversion Mortgage (HECM): A reverse mortgage available through an FHA approved lender that is the only reverse mortgage that is insured by the U.S. Federal Government.

Dynamic Programming: Also known as dynamic optimization, is a method of solving larger problems by breaking them down into smaller problems.

Consumption Risk Aversion: Willingness to tolerate fluctuations in consumption.

Portfolio Risk Tolerance: Willingness to tolerate downside portfolio loss potential.

Liquid Wealth: The value of checking and savings accounts.

• CFP / IMCA: Intermediate
• NASBA: Basic

• CFP: General Principles of Financial Planning / Investment Planning / Retirement Planning
• NASBA: Specialized Knowledge (Personal Financial Planning)

• 1.0 CFP hours
• 2.0 NASBA hours

1/7/2018

This month we review the March 2017 blog posts, specifically the following five: (1) On The Bleeding Edge Of Financial Planning Fee-For-Service Regulation (2) Why Congress Should Allow Financial Planning Fees To Be Paid From A Retirement Account, (3) Social Security Rules And Strategies For Divorcee Spousal Benefits, (4) The Evolution Of The Four Pillars For Retirement Income Portfolios, and (5) Evaluating Phi: Is Motivation Really The Hidden Variable Of Organizational Performance?

LO #1: Identify the key regulatory distinction between a retainer fee and a fixed fee.

LO #2: Identify which mental accounts best align with paying for financial planning services.

LO #3: Identify how long individuals have to be married before they are entitled to divorcee spousal benefits.

LO #4: Identify how a total return approach to retirement income generates cash flows.

LO #5: Identify a significant limitation of the CAR/CFA institute study of Phi.

Mental Accounts: The tendency to account for money as if it were in different categories based on subjective criteria.

Full Retirement Age: The age at which an individual is entitled to their full Social Security benefit.

Primary Insurance Amount: The full Social Security benefit an individual is entitled to.

Spousal Benefit: 50% of a spouse’s primary insurance amount (PIA).

Total Return Strategy: Retirement income strategy utilizing interest, dividends, capital gains, and principal.

Traditional Income Retirement Strategy: Retirement income strategy based on utilizing just interest and dividends to generate income (i.e., preserve the capital).

Phi: Name used to describe what CAR/CFA believes to be a hidden variable of organization performance, derived from motivational forces of “purpose”, “habits”, and “incentives”.

Reliability: How consistently a measurement provides the same result.

Validity: Whether a measure captures the construct that researchers intend for it to capture.

• CFP / IMCA: Intermediate
• NASBA: Basic

• CFP: General Principles of Financial Planning / Investment Planning / Retirement Planning
• NASBA: Specialized Knowledge (Personal Financial Planning)

• 2.0 CFP hours
• 3.0 NASBA hours

1/7/2018

This month we review the February 2017 blog posts, specifically the following four: (1) Behavioral Biases And The Hierarchy Of Retirement Needs (2) Interpreting Monte Carlo Analyses and the Wrong Side of Maybe Fallacy, (3) The Real Reason Big Savers Retire Early: Minimizing Retirement Savings Needs, and (4) The Impact Of Decreasing Retirement Spending On Safe Withdrawal Rates.

LO #1: Identify the different levels within the hierarchy of retirement needs.

LO #2: Identify the “as good as it gets” problem with annuitization.

LO #3: Identify how the “wrong side of maybe fallacy” relates to interpreting Monte Carlo analyses.

LO #4: Identify the dual dynamics of saving that allow big savers to retiree early.

LO #5: Identify how assumptions of decreasing retirement spending influence safe withdrawal rates.

Future Income: Income that funds future lifestyle from (e.g., investments, retirement accounts, annuities, pensions, and Social Security payments).

Current Assets: Assets which serve as financial reserves (e.g., cash, checking/savings, and money market accounts).

Current Income: Income that goes towards current spending needs (e.g., spending from cash flow, earned income, and passive income).

Wrong-Side-of-Maybe Fallacy: The tendency to assess whether a prediction is correct or incorrect based on which side of “maybe” (i.e., 50%) the prediction was on. For any forecasts other than 100% or 0% this is a fallacious conclusion, as a non-certain forecast inherently implies that the lower probability outcome could occur.

Lifestyle Creep: The increase in lifestyle that commonly occurs as one’s income grows.

Retirement Savings Shortfall: The difference between the amount saved for retirement and the amount needed to fund one’s retirement goals.

Safe Withdrawal Rate: The rate that could have historically been withdrawn from a portfolio on an inflation-adjusted basis and made it through a 30-year retirement time horizon without running out of money.

• CFP / IMCA: Intermediate
• NASBA: Basic

• CFP: General Principles of Financial Planning / Investment Planning / Retirement Planning
• NASBA: Specialized Knowledge (Personal Financial Planning)

• 1.0 CFP hours
• 1.0 NASBA hours

1/7/18

This month we review the January 2017 blog posts, specifically the following four: (1) 3 Types Of Retirement And Their Very Different Savings Strategies, (2) Squaring-The-Survival-Curve And What It Means For Retirement Planning, (3) Social Security Full Retirement Age Increases For First Time Since 2005, and (4) Adopting A Two-Dimensional Risk Tolerance Assessment Process.

• LO #1: Identify the three different types of retirement.
• LO #2: Identify the differing importance of disability insurance based on type of retirement.
• LO #3: Identify how survival curves have changed in recent history.
• LO #4: Identify the 2017 change in Social Security Full Retirement Age (FRA).
• LO #5: Identify the two dimensions of risk tolerance.

Traditional Retirement: Save early and often, invest prudently for growth, and retire as soon as you’re financially able.

Semi-Retirement: Retirement from the current full-time job/work, but not necessarily from any work.

Temporary Retirement(s) / Sabbatical: An approach to work where breaks occur, with some planned regularity/periodicity, for a limited period of time, after which the individual returns to the working world (albeit in a potentially new job or career track).

Survival Curve: A figure which plots percentage of people still alive (i.e., the “survival rates” of a population) over time.

Rectangularization / Squaring-of-the-Survival-Curve: The change in shape of the survival curve that results from people living closer to their maximum age without an equivalent increase in their maximum age.

Social Security Full Retirement Age (FRA): The age at which Social Security benefits become payable without a reduction for early retirement.

Delayed Retirement Credits: Credits that are earned for delaying retirement beyond the Social Security Full Retirement Age, and thereby increasing one’s Social Security benefits.

Risk Tolerance: Willingness to take on market volatility and stay invested.

Risk Capacity: An investor’s financial ability to have something bad happen in their portfolio and not ruin his/her goals.

• CFP / IMCA: Intermediate
• NASBA: Basic

• CFP: General Principles of Financial Planning / Investment Planning / Retirement Planning
• NASBA: Specialized Knowledge (Personal Financial Planning)

• 1.0 CFP hours
• 1.5 NASBA hours

The Tax Cuts and Jobs Act of 2017 (TCJA) represents a major shift in tax law beginning in 2018. Although originally proposed as a way to simplify the complex tax system in the U.S., the changes under the TCJA arguably present even more tax planning complexity. The tax reform has implications for key tax components such as a wide range of popular deductions and credits, as well as the personal income tax, capital gains tax, the and Alternative Minimum Tax systems. These changes present new financial planning strategies for advisors and their clients.

LO #1: Identify how the tax code has evolved over time.

LO #2: Identify the new personal income tax brackets under the TCJA.

LO #3: Identify changes in the AMT tax system under the TCJA.

LO #4: Identify deductions available to pass-through entities under the TCJA.

LO #5: Identify the deductibility of advisory fees under the TCJA.

• CFP / IMCA: Intermediate
• NASBA: Basic

• CFP: General Principles of Financial Planning / Investment Planning / Retirement Planning
• NASBA: Specialized Knowledge (Personal Financial Planning)

• 1.5 CFP hours
• N/A NASBA hours

Nearly every prospective retiree faces the decision about when to begin receiving Social Security payments, which can begin as early as age 62, or be delayed as late as age 70. The good news of delaying benefits is that they receive a guaranteed increase for each month and year of waiting; the bad news is that during the waiting period, no payments are received! This trade-off creates a “breakeven” period that must be reached in order for delaying to be beneficial. And for married couples, the situation is further complicated by the fact that the timing of when one spouse takes benefits can impact both the timing of spousal benefits and the size of survivor benefits. In this session, we look in depth at the trade-offs of Social Security timing, especially for married couples, the interplay between retirement, spousal, and survivor benefits, and strategies to optimize and maximizing Social Security retirement benefits for couples (includes divorced ex-spouses).

LO #1: Identify how how starting Social Security benefits early or late affects the benefit that the individual receives.

LO #2: Identify how to do an accurate breakeven analysis of Social Security benefits.

LO #3: Identify the similarities and differences between Spousal Benefits and Survivor Benefits.

LO #4: Identify how the Bipartisan Budget Act of 2015 has affected the File and Suspend.

LO #5: Identify when the new rules of the Bipartisan Budget Act of 2015 kick in.

• CFP / IMCA: Advanced
• NASBA: Basic

• CFP: General Principles of Financial Planning / Investment Planning / Retirement Planning
• NASBA: Specialized Knowledge (Personal Financial Planning)

• 1.0 CFP hours
• N/A NASBA hours

This session will give you key information on understanding AMT and its complications, how to evaluate client exposure, and the implications and planning strategies that stem from AMT’s expanding reach over your clients. Think you don’t have clients who will be concerned about AMT? Think again. Your clients have become increasingly exposed to AMT in recent years, and the trend will continue now that the fiscal cliff legislation has made current AMT rules permanent! If you don’t know how to spot potential AMT triggers and manage them, you had better learn – now!

LO #1: Identify common individual AMT adjustments.

LO #2: Identify how the AMT minimum tax credit (MTC) impacts future income.

LO #3: Identify AMT tax preference items.

LO #4: Calculate AMT liability.

LO #5: Identify common AMT adjustments and tax preference items that cause AMT exposure.

• CFP / IMCA: Advanced
• NASBA: Basic

• CFP: General Principles of Financial Planning / Investment Planning / Retirement Planning
• NASBA: Specialized Knowledge (Personal Financial Planning)

• 1.0 CFP hours
• N/A NASBA hours

In this section, we are going to delve into not only the question of when to choose a Roth IRA versus a traditional IRA, but also when you want to conduct a conversion.

LO #1: Compare and contrast the basics of a Traditional versus Roth IRA.

LO #2: Explain the tax equivalency principal and calculate the amount of after-tax contributions needed to equal the same amount of pre-tax contributions given various tax rates and pre-tax contribution amounts.

LO #3: Identify the “Backdoor” Roth IRA strategy and the considerations for using it.

LO #4: Identify the Mega “Backdoor” Roth IRA Strategy and the rules for successfully implementing the strategy.

LO #5: Explain partial Roth conversion strategies and the additional tax planning flexibility they provide.

• CFP / IMCA: Advanced
• NASBA: Basic

• CFP: General Principles of Financial Planning / Investment Planning / Retirement Planning
• NASBA: Specialized Knowledge (Personal Financial Planning)

• 1.0 CFP hours
• N/A NASBA hours

The conventional view of rebalancing is that it’s a way to enhance long-term returns for investors while keeping their portfolio on target to achieve long-term goals. The reality, though, is that when rebalancing across different asset classes like stocks and bonds, systematic rebalancing is more likely to reduce returns, albeit with the benefit of also reducing risk. And for those who wish to engage in the strategy, it’s still necessary to consider the optimal frequency for rebalancing – which, as it turns out, is not based on a fixed time horizon like monthly, quarterly, or annual rebalancing, but instead is best done by targeting asset allocation thresholds at which a rebalancing trade will trigger (however long it takes to get there!).

LO #1: Understand why rebalancing does not necessarily improve returns in the long run, but may improve risk-adjusted returns instead

LO #2: Be able to determine which types of asset class rebalancing are potentially able to enhance returns, versus merely reducing risk

LO #3: Understand why fixed time period rebalancing strategies are not necessarily optimal for most portfolios, especially when considering transaction costs

LO #4: Be able to apply a tolerance band approach to portfolio rebalancing, and know how to set targets for rebalancing thresholds

• CFP / IMCA: Advanced
• NASBA: Basic

• CFP: General Principles of Financial Planning / Investment Planning / Retirement Planning
• NASBA: Specialized Knowledge (Personal Financial Planning)

• 1.0 CFP hours
• N/A NASBA hours

For long-term investors, the reality is that even if markets are volatile for a period of time, as long as the portfolio stays invested, returns can average out in the long run. In the case of retirees, however, ongoing spending withdrawals introduce the possibility that if the portfolio experiences weak returns early on, it could be depleted entirely before the good returns finally show up. As a result, retirees must consider this “sequence of returns” risk when planning for retirement, and strategies to manage it, from reducing spending in the first place, to engaging in more dynamic asset allocation to reduce risk exposure, or dynamic spending strategies to adapt spending withdrawals to market changes along the way!

LO #1: Understand what sequence of return risk is, and how it affects a retirement portfolio

LO #2: Know the origin of the “safe withdrawal rate” and how to apply it in today’s low-return environment

LO #3: Be able to compare different types of dynamic asset allocation strategies and ways to create spending “floors” for retirees

LO #4: Be able to apply dynamic spending strategies with clients, and understand how to set the parameters for retirees to manage along the way

• CFP / IMCA: Advanced
• NASBA: Basic

• CFP: General Principles of Financial Planning / Investment Planning / Retirement Planning
• NASBA: Specialized Knowledge (Personal Financial Planning)

• 1.0 CFP hours
• N/A NASBA hours

The Patient Protection and Affordable Care Act was signed into law on March 23, 2010, but many of its most significant provisions only started to take effect in 2014, with consumers still adjusting to the availability of health insurance exchanges. In this session, we take a deep look at the new health insurance coverage rules, including the creating of essential health benefits, the rollout of the new health insurance exchanges, the new premium assistance tax credit, and the new individual and employer health insurance mandates and how to manage them. While the rules of “Obamacare” have been highly controversial, the reality is that they have now taken effect, and whether liked or not will have a significant impact on health insurance and tax planning opportunities for clients in the years to come!

LO #1: Illustrate an understanding of the overall policy goals of the PPACA.

LO #2: Identify and list the “minimum health care offerings” that are required in health insurance for 2014.

LO #3: Explain how the Health Insurance Exchanges work and differentiate between the two “types” of exchanges.

LO #4: Understand how the cost of health insurance will change and how it varies between large and small employers, as well as individuals.

LO #5: Explain how the Premium Assistance Tax Credit works, be able to calculate if a client would be eligible for it or not, and if so, calculate the tax credit.

• CFP / IMCA: Advanced
• NASBA: Basic

• CFP: General Principles of Financial Planning / Investment Planning / Retirement Planning
• NASBA: Specialized Knowledge (Personal Financial Planning)

• 1.5 CFP hours
• N/A NASBA hours

For most of their history, reverse mortgages have been rather unpopular with financial planners, due both to their relatively high costs, and the fact that they are typically viewed as a resource or tool of last resort. Yet the reality is that use of reverse mortgages has exploded over the past decade, aided more recently by a newer, lower cost option, and several recent research articles in the Journal of Financial Planning have shown ways that reverse mortgages can be used proactively to enhance retirement income sustainability. In this presentation, we review the technical mechanics of HECM reverse mortgage loans, the costs involved, the emerging reverse mortgage strategies and applications that should be considered for clients, and the caveats and concerns that remain.

LO #1: Discuss the requirements for someone to be able to use a reverse mortgage.

LO #2: Understand how a reverse mortgage works and list the various “triggering events”.

LO #3: Explain the costs associated with a reverse mortgage.

LO #4: Describe the tax treatment of reverse mortgages.

LO #5: Discuss when a reverse mortgage may a good idea and when it may not be ideal.

LO #6: Identify the caveats and concerns of reverse mortgages.

• CFP / IMCA: Advanced
• NASBA: Basic

• CFP: General Principles of Financial Planning / Investment Planning / Retirement Planning
• NASBA: Specialized Knowledge (Personal Financial Planning)

• 1.0 CFP hours
• N/A NASBA hours

While it is ‘standard’ for advisors to diversify into an asset allocated portfolio, the question of where to locate those asset classes is more challenging. In this session, we will explore the various ways to handle asset location, taking into consideration tax efficiency, expected returns, and time horizons. We also take a look at how to build, use, and implement an asset location priority list based on the expected return and the tax efficiency of various assets. Finally, we review the caveats and concerns of asset location and approximate the value of utilizing an asset location strategy with your clients.

LO #1: Identify the ways to “asset locate” and the impact of each.

LO #2: Describe the impact that turnover has on the final portfolio value and how it changes the optimal location of stocks in a portfolio.

LO #3: Be able to explain where various types of assets fall within the asset location priority list.

LO #4: Identify the factors in building an asset location priority list

LO #5: Illustrate how a financial planner can implement an asset location strategy.

• CFP / IMCA: Advanced
• NASBA: Basic

• CFP: General Principles of Financial Planning / Investment Planning / Retirement Planning
• NASBA: Specialized Knowledge (Personal Financial Planning)

• 1.0 CFP hours
• N/A NASBA hours