CPA financial planners are often confronted with the question, “When should I start collecting Social Security benefits?” For married couples, the question should be asked in the plural. Current financial needs and expected life span may be paramount considerations for a single person. However, the implications of when to begin
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TOPICS / PERSONAL FINANCIAL PLANNING
Retirement planning
Annuities and the Other Side of the Retirement Savings Coin
Like many of their clients, CPAs tend to consider the problem of retirement planning solved once they develop a plan for accumulating savings during the client’s working years. But as recent events have shown, panics and bear markets can add another dimension to the equation. Moreover, there is another side
AICPA and InvestmentNews Offer Online Discussion Forum for Financial Advisers
The AICPA and InvestmentNews have launched “Ask the CPA,” an online discussion forum on advising clients in times of economic crisis. InvestmentNews readers may post their questions at www.investmentnews.com/community. CPAs holding the Institute’s personal financial specialist (CPA/PFS) credential will respond. The forum will run through December 31, 2008. “This is an
Top Things to Know About Roth 401(k)s
Roth IRAs have become popular retirement vehicles, but the low contribution limits and participant income limitations have prevented many people from taking advantage of them. The Economic Growth and Tax Relief Reconciliation Act of 2001 provided for designating Roth contributions within a qualified plan. Now many individuals previously excluded can
Abusive Insurance and Retirement Plans
EXECUTIVE SUMMARY Some of the listed transactions CPA tax practitioners are most likely to encounter are employee benefit insurance plans that the IRS has deemed abusive. Many of these plans have been sold by promoters in conjunction with life insurance companies. As long ago as 1984, with the addition of
Retirement Planning
The AICPA and Department of Labor have released an online video, “Choosing a Retirement Solution for Your Small Business,” to assist small employers and accountants with employee retirement program options. Using the real-life experiences of four small employers who operate Simplified Employee Pension, SIMPLE IRA and 401(k) plans, the video
Wealth Harvesting: More Than Just Retirement or Succession Planning
EXECUTIVE SUMMARY The first step in developing a wealth harvesting plan is to identify the client’s departure objectives, focusing on four categories: providing for the client and the people and causes they care about; ensuring a smooth and successful succession; protecting assets; and developing tax-smart strategies. It takes a variety
Data Point: $225,000
Savings a 65-year-old couple retiring this year needs to cover medical costs in retirement, a 4.7% increase over the 2007 estimate of $215,000. Source: Fidelity Investments, www.fidelity.com.
A 401(k) Tax Break That’s Often No Break
Withdrawing company stock from a 401(k) to take advantage of a tax break called net unrealized appreciation (NUA) sounds like a no-lose proposition, and most advisers tell their eligible clients to go for it. But there’s just one big problem: When you run the numbers, this maneuver
Automatic Enrollment a Win-Win
A study by Retirement Made Simpler, a coalition formed by the AARP, the Financial Industry Regulatory Authority and the Retirement Security Project (RSP), found strong employee approval of automatic enrollment in employer-sponsored retirement plans. Employees surveyed were nearly unanimous in their support of being automatically enrolled—98% were happy their employer
Women Worse Off in Retirement
FINANCIAL PLANNINGA recent Government Accountability Office report found that while almost 90% of men and women age 65 and older received Social Security benefits, men’s median annual income from the source was almost $3,800 higher than women’s ($12,583 vs. $8,799). Among most of the population age 65 or older, Social
Managed Accounts
EXECUTIVE SUMMARY A growing number of companies are beginning to offer employees professionally managed accounts for 401(k) assets. In these managed accounts, an independent investment manager handles investment decisions, makes portfolio changes as needed based on each participant’s specific needs and risk tolerance, and rebalances the
Gender Gap in Financial Preparedness
The latest Retirement Fitness Survey reported about six out of 10 women felt worried (58%) and uncertain (61%) about planning financially for retirement. Married women appeared less prepared than their unmarried counterparts, with 39% vs. 27% not knowing how much they had saved for retirement (20% of married men and
Dirty Little Secrets of 401(k) Plan Fees
In September 2006, eight Fortune 500 companies were named in class action lawsuits alleging they failed to monitor and disclose 401(k) fees under so-called revenue-sharing arrangements. To protect your company or client, watch for these red flags when reviewing a 401(k) plan offering: Determine how expenses in
Taking Stock of ESPPs
EXECUTIVE SUMMARY Employees of corporations with an employee stock purchase plan (ESPP) often fail to participate fully in the plan because they don’t understand why it can be a good deal. Many plans offer a purchase discount of as much as 15%. Effectively, the discount can
Features
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How a CPA beat burnout after strokes, depression
Randy Crabtree, CPA, suffered two strokes in four days and struggled with his mental health for years before he learned to recognize, address, and prevent chronic stress. Learn from his insights on how CPAs can avoid professional burnout.
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