Social Security Benefits for Spouses (November 2019)
Financial planners and advisors need to have a good understanding of Social Security’s benefit provisions as they apply to married couples. Otherwise, making inefficient or suboptimal decisions is all too easy. We examine the rules for spousal and survivors benefits.
Author: Bruce D. Schobel, FSA, MAAA, CLU, CEBS, is a consulting actuary in Winter Garden, Florida, who worked for SSA during 1979 through 1988 and has stayed involved in Social Security matters since then. He was staff actuary to the National Commission on Social Security Reform (the “Greenspan Commission”) that developed the framework for the Social Security Amendments of 1983.
Millennials—the Newest “Club Sandwich Generation” — Inherit the “Sandwich Generation” (November 2019)
As millennials move into caregiving range of their aging parents in the next few years, the dynamics of the “sandwich generation” are likely to transition into more of a “club sandwich generation,” comprising four-generation families that are interdependent in multiple ways. While every generation feels a shared responsibility to financially support family, many of those younger will not have the resources to do so and many of those older may not require it. Financial issues will play a determining role in who can support differing family, generational, and individual needs, capacities, and economic circumstances in some surprising ways. Financial services professionals have a unique opportunity to assist with planning and strategies that will last across generations.
Author: John N. Migliaccio, PhD, RFG, FGSA, MEd, is an award-winning business executive, consultant, speaker, and educator with international research, analytics, and marketing experience in the baby boomer and senior markets. He has recently returned to a successful consultancy as president of Maturity Marketing Services after serving for 7 years as assistant vice president and director of research and gerontology at the MetLife Mature Market Institute, MetLife’s center of expertise on aging, longevity, and the generations. He is the author of numerous articles, book chapters, and marketing guides on the 50-plus population.
The Tax Court Unchains the “Lox” on Deduction of Family Office Expenses The Tax Court Unchains the “Lox” on Deduction of Family Office Expenses (July 2019)
The tax treatment of single family offices (SFOs) is examined. Both the new tax act and a U.S. Tax Court case shed light on how to trigger deductibility.
Author: Mark R. Parthemer, Esq., AEP (Distinguished), is managing director and senior fiduciary counsel, southeast region, overseeing estate and legacy planning services at Bessemer Trust, an exclusive wealth management firm. He is an ACTEC Fellow; a frequent national lecturer and published author; chair, ABA Non-Tax Issues Affecting Estates and Trusts Committee; member, Florida and Pennsylvania Bars, Synergy Summit, and the Florida Bankers Association Executive Council, and chair, Trust Legislation Committee. He has been part of the University of Miami’s Heckerling faculty and is a former adjunct professor, Widener University School of Law. Mark often has been recognized as one of the Best Lawyers in America and a Florida Legal Eagle.
College Education Planning: Indexed Universal Life Insurance versus 529 College Saving Plans (March 2019)
This study compared the performance of indexed universal life (IUL) insurance policies with 529 college saving plans in college education planning by Monte-Carlo simulations and sensitivity analysis. The IUL policies showed lower return and risk than the all-stock 529 portfolios but higher return and risk than the typical age-based 529 portfolios. The expected family contribution (EFC) impact should be considered in the decision-making process. All key market variables were modeled as correlated stochastic processes in the simulation. Important actuarial assumptions and tax-related issues driving the performance of the IUL and 529 investments were thoroughly analyzed. The study reported how these factors affected the performance of two alternative funding solutions.
Author: Zhixin Wu, PhD, ASA, MAAA, graduated with a PhD in mathematics from the University of Rochester in 2007 and achieved ASA designation of the Society of Actuaries in 2012. She has been a member of the American Academy of Actuaries since 2015. She is currently an associate professor and the chair of the math department of DePauw University. Her research interests include actuarial science, financial mathematics, and stochastic partial differential equations.
Author: Lei Liang, PhD, CFA, CFP, CAIA, FRM, graduated with a PhD in mathematics in 2007 from the University of Rochester and then joined the Federal Home Loan Bank in Des Moines, Iowa working in the risk management and quantitative modeling area. He joined Aviva Investors North America (subsidiary of UK’s top insurer Aviva PLC) providing quantitative research in portfolio management, derivative modeling, hedging, and alternative investments. Dr. Liang has been working with 40|86 Advisors, Inc. since 2011 as a senior quantitative analyst. He is a member of the portfolio management group in charge of derivatives hedging for the FIAs and EIULs portfolio as well as quantitative investment and portfolio management.
Adjusting to Widowhood: What Financial Service Professionals Need to Know (January 2019)
A recent study by The American College of Financial Services indicates that nearly 50 percent of widows leave their advisor on the death of their husband. However, there are many ways—both financially and nonfinancially—that financial service professionals can best serve their clients as soon as they become widows, and then travel with them as they create new lives for themselves. We look at the psychological impact of becoming a widow, the financial readiness of widows, and the implications that these factors have for the financial planner.
Author: Sandra Timmermann, EdD, is a nationally recognized gerontologist who focuses on aging, retirement, and the application to business. She is currently the visiting professor of gerontology and retirement living at The American College, a senior fellow at the Women’s Institute for a Secure Retirement, and a member of the Funding Longevity Task Force. She also has a consulting practice, working with financial services and other businesses interested in reaching the 50+ market.
Sandy was a vice president at MetLife and the founder and director of the MetLife Mature Market Institute until it was disbanded in 2013. She has been in the aging field for over 30 years, is a frequent speaker on retirement issues, and has been interviewed by hundreds of media outlets. She serves in leadership capacities with several aging organizations, is a representative to the UN for the International Federation on Ageing, was a delegate to the White House Conference on Aging, and holds the Cavanaugh Award. She received a BA from the University of Colorado and MA and EdD degrees from Columbia University.
Testamentary Charitable Lead Annuity Trusts—Have Your (Charitable) Cake and Eat It, Too (Well, at Least Your Heirs Get to Enjoy It!) (March 2019)
We focus on a highly effective, multigenerational planning structure, particularly beneficial in a low-interest-rate environment (like today) with a substantial generation-skipping tax exemption (like today).
Author: Mark R. Parthemer, Esq., AEP (Distinguished)
Divorce Is Hard, but a Failure to Change Life Insurance Beneficiaries Can Compound the Pain (May 2019)
When a divorce occurs, a life insurance policy where an ex-spouse has been designated as a beneficiary may not be a focus of attention. States have taken steps, either through a judicial mandate or the enactment of legislation, to establish policies for dealing with beneficiary designations that have not been changed from an ex-spouse. However, when the life insurance is provided through a federal program, or is an employee benefit governed by the Employment Retirement Income Security Act of 1981 (ERISA), the Supreme Court has been clear in finding that state law is preempted, and that federal law must be applied to determine the status of the beneficiary.
Author: Paul J. Schneider, JD, LLM, is senior counsel to Paisner~Litvin, LLP, Bala Cynwyd, Pennsylvania, where he has advised clients on taxation and employee benefit matters for more than 30 years. He is a charter fellow of the American College of Employee Benefits Counsel and has served as chairman of the Important Developments Subcommittee of the American Bar Association Tax Section’s Employee Benefits Committee.
Mr. Schneider is also a member of the board of editors of the Journal of Taxation. Mr. Schneider is a graduate of Lehigh University, Columbia University School of Law (JD), New York University (LLM in Taxation), and LaSalle University (MBA). Mr. Schneider frequently writes articles and lectures on tax and employee benefits-related topics, and is coeditor of ERISA: A Comprehensive Guide, 4th Edition (Aspen, 2011).
Call Me Anything You Want…Just Don’t Call Me a Millennial (July 2018)
The challenge for financial professionals is to understand more about demographic dynamics in order to work with millennial clients and their baby boomer parents. For example, the information available about millennial clients can help create more emphasis on important life events deferred or delayed because of financial circumstances and how to improve the process of attaining them. This would include helping them with planning for debt reduction rather than asset accumulation alone.
Author: John N. Migliaccio, PhD, RFG, FGSA, MEd
Income-Shifting Strategies for Those with Children (March 2018)
Individuals, especially those who own their own business, are continually looking for ways to shift income to minimize their tax liability. As a result, they seek to tap into opportunities to avoid the “kiddie tax,” employ their children, establish family limited partnerships, implement sale and leasebacks, and create useful trusts. This is not an all-inclusive list, however it provides a reasonable starting point for advising clients about taking advantage of income-shifting strategies and how they minimize tax liability.
Author: Daniel C. Ruggieri, CPA, is an audit associate at KPMG LLP, Philadelphia. Mr. Ruggieri specializes in auditing technology and life-science industries.