Contents PERSONAL FINANCE HEALTH AND MEDICAL

Transcription

1 Contents PERSONAL FINANCE Financial Planning Issues The Financial Planning Puzzle...1 The Need for Financial Planning...2 Basic Steps in the Financial Planning Process...4 Choose the Financial Planning Team...5 Planning for the Recently Divorced...7 Planning for Kids Going to College...9 Planning for the Adult Child at Home...11 Planning for the Sandwich Generation...13 Planning for Women...15 Planning for the Recent College Graduate...17 Life Events Checklist...19 Consumer Price Index...20 Cash Flow Dealing with Identity Theft...21 Cash Management Tools...25 FDIC Deposit Insurance...29 The Personal Budget...33 The Personal Budget Worksheet...35 Personal Cash Flow Statement...37 Debt, Income, Mortgage and Education Analysis (DIME)...38 Personal Finance Data - Fact Finder...39 Cash Flow...42 Cash Flow Detail...43 Net Worth...44 Personal Net Worth...45 Personal Net Worth Statement...49 Lifetime Earnings...50 Managing Your Debt...51 Up to Your Neck in Debt?...54 Checking Your Credit Report...57 Credit Cards...60 Buying a Home...64 Types of Mortgages...69 Pay Off the Mortgage or Invest?...72 The Bi-Weekly Mortgage...75 When to Refinance Your Home...78 Financing an Auto...81 Loan Amortization Schedule...84 Rate of Interest for a Loan...86 Payments To Pay Off A Loan...87 Making Additional Principal Payments...88 Pay Yourself First...89 HEALTH AND MEDICAL Health Insurance The Need for Health Insurance...90 Health Insurance Issues...92 How Employer Provided Health Insurance Works...94 Business Responsibilities Under the ACA...95 How Individual Health Insurance Works Individual Responsibilities Under the ACA Critical Illness Insurance Patient Protection and Affordable Care Act (Highlights) Patient Protection and Affordable Care Act (Timeline) i

2 Employee Benefits Group Term Life Insurance Group Health Insurance Health Care Portability COBRA Coverage Continuation Cafeteria Plans (IRC Sec. 125) Flexible Spending Accounts Medical Reimbursement Plans Health Reimbursement Arrangements How a Health Reimbursement Arrangement Works Health Savings Account How a Health Savings Account Works Medical Savings Accounts Long-Term Care Long-Term Care Paying for Long-Term Care Annuity LTC Combination Contract Life Insurance LTC Combination Policies Long-Term Care Partnership Long-Term Care Tax Issues Long-Term Care Break-Even Choosing a Long-Term Care Policy How Employer Provided LTC Insurance Works How Individual LTC Insurance Works Long-Term Care Analysis Long-Term Care Analysis Data - Fact Finder Long-Term Care Analysis Long-Term Care Timeline Disability Odds of Disability The Impact of Disability The Individual Need for Disability Insurance Business Need for Disability Insurance Sources of Disability Insurance Individual Disability Income Insurance How Individual Disability Income Insurance Works Group Disability Insurance How Employer Provided Disability Insurance Works When the Parent Becomes the Child Disability Break-Even Disability Income Analysis Disability Income Analysis Data - Fact Finder Disability Income Analysis Disability Timeline INCOME TAXES Basic Income Tax Income Taxes Generally (Three Kinds of Income) Federal Income Tax Approximator Federal Income Tax Tables Federal Income Tax Tables Income Tax Tables for Estates - Trusts - Corporations Types of Trusts and Their Tax Treatment ii

3 Advanced Income Tax Personal Income Tax History (Top Marginal Rates 1913 to Present) Capital Gains and Losses Utilizing Passive Losses Personal Alternative Minimum Tax Accumulation of Trust Income for Minors Income Tax Basis Taxation of Disability Insurance Premiums and Benefits Deductibility of Interest % Tax on Net Investment Income Federal Taxation of Common Investments % Additional Hospital Insurance Tax Tax Legislation Tax Cuts and Jobs Act of Individual Highlights of the Tax Cuts and Jobs Act of Business Highlights of the Tax Cuts and Jobs Act of Highlights of 2017 Disaster Tax Relief The American Taxpayer Relief Act of Highlights of the 2010 Tax Relief Act American Recovery and Reinvestment Act of Highlights of the Pension Protection Act of Highlights of 2005 Hurricane Tax Relief INVESTMENTS Investment Planning The Perfect Investment Key Investment Questions Begin Now or Wait? Accumulation Goals Impact of the Rate of Return Cost of Procrastination Time and Growth of Money Future Value of a Single Sum Present Value of a Future Sum Deposits Needed to Accumulate a Future Sum Rate of Return on a Single Sum Future Value of Periodic Deposits Future Value of a Single Sum and Periodic Deposits Accumulating A Million Dollars The Rule of 72 and the Rule of Rule of Types of Investment Risk Monte Carlo Simulation Monte Carlo Simulator Inflation Effect of Inflation Rate of Inflation Investment Loss Due to Inflation Wash Sales Purchasing Power of One Dollar The Real Rate of Return Worksheet The Real Rate of Return Tax-Exempt vs. Taxable Income Tables Tax-Exempt vs. Taxable Income Pyramid of Investments Basic Investment Tools Alternative Investments Modern Portfolio Theory Passive vs. Active Investing Maintaining Your Asset Mix Value over Time iii

4 Investment Planning Analysis Asset Allocation Data - Fact Finder Asset Allocation Current Allocation for Assets Recommended Allocation for Assets Asset Allocation Comparison Asset Allocation Supplemental Information Weighted Average Rate of Return/Net Worth Mutual Funds Mutual Funds Mutual Fund Share Classes A, B, and C Mutual Funds Glossary of Terms Index Funds Exchange-Traded Funds Exchange-Traded Funds vs. Index Mutual Funds How a Mutual Fund Works Mutual Fund Families Dollar Cost Averaging Cash, Stocks and Bonds Securities Investor Protection Corporation (SIPC) Types of Securities Orders Stocks Stock Market Indexes and Averages Growth vs. Value Investing: Which is Best? Coping With Market Volatility Bonds Corporate Bonds U.S. Government Securities Treasury Inflation-Protected Securities Municipal Bonds Other Investment Tools Hedge Funds Limited Partnerships Real Estate Investment Trusts Accumulation Funding Analysis Accumulation Funding Analysis Data - Fact Finder Accumulation Funding Analysis Accumulation Funding Timeline RETIREMENT PLANNING Retirement Needs Do You Desire Retirement Peace of Mind? Health Care Planning In Retirement The Need for Retirement Planning Average Life Expectancy at Age Sources of Retirement Income When Will Your Nest Egg Run Out? Evaluating Early Retirement Offers Making the Most of Your Retirement Plan Length of Time a Sum Will Last Present Value of Future Annuity Payments Progress Toward Retirement Goals Internal Rate of Return iv

5 Social Security Optimizer Social Security Retirement Claiming Strategies for Married Couples Annuities in Retirement Income Planning Deferred Income Annuities How a Deferred Income Annuity Works Pension Income Alternative Reverse Mortgages How a Reverse Mortgage Works Retirement Needs Analysis Retirement Needs Analysis Data - Fact Finder Retirement Analysis Capital Available for Retirement Alternatives to Achieving Retirement Goals Achieving Your Retirement Goals Retirement Timeline Retirement Analysis Detail Individual Retirement Plans IRAs Compared Tax-deductible Portion of Your IRA Contribution IRA Historical Limits (Traditional and Roth IRAs) Traditional IRAs How a Traditional IRA Works Deductible IRA Contributions for Traditional IRAs Does It Matter When You Contribute to an IRA? Roth IRA Conversion (Factors to Consider) Roth IRAs How a Roth IRA Works Employer Sponsored Plans Transfers from Employer-Sponsored Retirement Plans to Individual Plans Employer Sponsored Plans Qualified Retirement Plans Life Insurance in Qualified Plans (Legal Limitations) Keogh Plans (H.R. 10) Traditional Profit Sharing Plan How a Traditional Profit Sharing Plan Works Traditional Money Purchase Plan How a Traditional Money Purchase Plan Works Nontraditional Defined Contribution Plan How a Nontraditional Defined Contribution Plan Works Traditional Defined Benefit Plan How a Traditional Defined Benefit Plan Works Target Benefit Plan Employee Stock Ownership Plan (ESOP) Cash or Deferred 401(k) Plan Safe Harbor 401(k) Plan How a 401(k) Cash or Deferred Plan Works Solo 401(k) How a Solo 401(k) Plan Works (b) Salary Deferral Plan (Tax-Sheltered Annuities) How a 403(b) Salary Deferral Plan Works Stock Bonus Plan Age-Weighted Profit Sharing Plan Fully-Insured Defined Benefit Plan (IRC Sec. 412(e)(3)) Simplified Employee Pension (SEP) v

6 How a SEP-IRA Works SIMPLE Retirement Plan How a SIMPLE IRA Works Qualified Plans Compared Qualified Plan Historical Limits Qualified Roth Contribution Program Defined Contribution Plans Compared Combinations of Retirement Plans Top-Heavy Plans Fiduciary Standards and Responsibilities Prohibited Transactions Rules Qualified Plan Participant Loans Unrelated Business Taxable Income (UBTI) Retirement Distributions Retirement Plan Distributions Before Age 59½ Substantially Equal Periodic Payments - 72(t) Lump-Sum Distributions Before Age 59½ IRA Rollover of Qualified Plan Values vs. Lump-Sum Tax Treatment IRA Rollover as a Qualified Plan Conduit Mandatory Withholding for Plan Distributions Net Unrealized Appreciation The Basics of Required Minimum Distributions Required Minimum Distributions (Lifetime) Required Minimum Distributions After Death (Spousal Beneficiary) Required Minimum Distributions After Death (Non-Spouse Beneficiaries) The Basics of Stretch IRAs Stretch IRA How a Stretch IRA Works (Spousal Beneficiary and a Single Inherited IRA) How a Stretch IRA Works (Spousal Beneficiary and Separate Inherited IRAs) How a Stretch IRA Works (Non-Spouse Beneficiaries and Separate Inherited IRAs) Uniform Lifetime Table Joint Life and Last Survivor Table Single Life Table Substantially Equal Periodic Payments Rate of Withdrawal in Retirement EDUCATION FUNDING Planning for College The Benefits of a College Education Saving for College Ways to Save for College Section 529 Qualified Tuition Plans Higher Education Savings Plan How a 529 Higher Education Savings Plan Works Prepaid Tuition Plan How a 529 Prepaid Tuition Plan Works Coverdell Education Savings Account How a Coverdell ESA Works Education Savings Plans Compared Paying for College Today Ways to Pay for College Choosing a College College and Financial Aid Calendar Growth in College Costs ( ) Projected Costs of Education vi

7 Education Funding Analysis Education Funding Analysis Data - Fact Finder Education Funding Summary Education Funding Analysis Education Funding Timeline Progress Toward Education Goals PROTECTING YOUR FINANCES Property and Casualty Personal Property and Casualty Insurance Automobile Insurance Homeowner s Insurance Renter s Insurance Condominium Unit Owner s Insurance Earthquake Insurance Flood Insurance Watercraft Insurance Individual Liability Insurance Life Insurance and Annuities General Purposes of Life Insurance Life Insurance: Glossary of Terms Spouse Insurance Considerations in the Purchase of Life Insurance First-to-Die Life Insurance Policies Survivorship Life Insurance (Second-to-Die) Tax-Free Policy Exchanges (IRC Sec. 1035) Modified Endowment Contracts The Need for Responsible Planning Capital Needs Analysis Worksheet How Much Life Insurance? Human Life Value Types of Life Insurance Policies Term Life Insurance Whole Life Insurance Universal Life Insurance Variable Life Insurance Variable Universal Life Insurance Indexed Universal Life Insurance Immediate Annuities How an Immediate Annuity Works Deferred Annuities How a Deferred Annuity Works Variable Annuities Indexed Annuities Combination Annuities Taxation of Nonqualified Annuities Commissioners Standard Ordinary (CSO) Mortality Table Deaths per Thousand at Various Ages The Chance of Dying Before Age Insurance Company Rating Systems Survivor Needs Analysis Survivor Needs Analysis Data - Fact Finder Survivor Needs Now and Future (Client dies) Survivor s Immediate Needs (Client dies) Survivor Needs Timeline (Client dies) Survivor Analysis Detail (Client dies) vii

8 SOCIAL SECURITY AND OTHER GOVERNMENT PROGRAMS Social Security, Medicare, and Medicaid An Overview of Social Security Benefits Who Receives Social Security Benefits? Social Security and Medicare Taxes Taxation of Social Security Benefits Taxable Portion of Social Security Benefits How Work Affects Social Security Benefits Social Security Retirement Benefits When to Take Social Security Retirement Benefits Social Security Break-Even The Social Security Blackout Period Early or Delayed Retirement s Effect on Social Security Benefits Social Security Survivor Benefits Social Security Disability Benefits Medicare Parts A and B Medicare Part C - Medicare Advantage Medicare Part D - Prescription Drug Coverage How Medicare Prescription Drug Coverage Works Medigap Policies Medigap Policies Compared Medicaid ABLE Account How an ABLE Account Works ESTATE PLANNING Estate Planning Concepts The Need for Estate Planning Key Estate Planning Considerations The Importance of Beneficiary Designations Beneficiary Audit Checklist Estate Settlement Costs Funnel Estate Settlement Costs The Federal Estate Tax (An Overview for 2018) How the Federal Estate Tax Works (A Simplified Illustration) Federal Estate Tax Tables Federal Estate Tax Worksheet (Assumes Death Occurs During 2018) Federal Estate Tax Approximator Valuation of Estate Assets Basic Estate Planning Basic Steps in the Estate Planning Process Meet the Estate Planning Team Choose the Estate Planning Team How Often Should Legal Documents Be Reviewed? Choosing an Attorney Items to Discuss Before Meeting with an Attorney Advantages of a Will Types of Wills and Trusts Various Estate Planning Arrangements (A Summary of Benefits) No Will? No Problem! (Common Law States) No Will? No Problem! (Community Property States) Duties of an Executor Steps in a Probate (An Overview) Avoiding Probate Transfer on Death Holding Title viii

9 Joint Tenancy Should Appreciated Assets be held in Community Property or Joint Tenancy? Revocable Living Trust (Inter-vivos Trusts) Funding Your Revocable Living Trust Durable Power of Attorney Who Makes Medical Decisions When I Cannot? Advance Health Care Directives Lifetime Gifts The Federal Gift Tax Annual Exclusion Gifts (Reducing the Federal Estate Tax) IRC Sec. 2503(c) Trust for Minors How an IRC Sec. 2503(c) Trust Works Uniform Gifts to Minors Act Uniform Transfers to Minors Act How a Custodial Account Works Special Needs Trust How a Special Needs Trust Works Advanced Estate Planning Tools Per Capita vs. Per Stirpes Death Tax Reduction The Marital Deduction Special Use Valuation (IRC Sec. 2032A) Deferring Payment of Federal Estate Taxes (IRC Sec and IRC Sec. 6166) Powers of Appointment Disclaimers Generation-Skipping Transfer Tax Dynasty Trust How a Dynasty Trust Works Income in Respect of a Decedent Federal Taxes on Income in Respect of a Decedent Potential Combined Tax Disaster with a Child as the Beneficiary Potential Combined Tax Disaster with a Grandchild as the Beneficiary Effects of Skipping a Generation Transfers to Noncitizen Spouses Estate Freezing Techniques Estate Freezing Generally Family General Partnership Family Limited Partnership Installment Sale Private Annuity Corporate Recapitalization Joint Purchase of Assets How a Grantor-Retained Interest Trust Works (GRIT) How a Grantor-Retained Annuity Trust Works (GRAT) How a Grantor-Retained Unitrust Works (GRUT) Intentionally Defective Grantor Trust How an Intentionally Defective Grantor Trust Works How a Qualified Personal Residence Trust Works Life Insurance and Estate Taxation Using Cash Value Life Insurance How Are Death Taxes Paid? Taxation of Life Insurance Proceeds Irrevocable Life Insurance Trust for a Single Person Irrevocable Life Insurance Trust for a Married Couple Paying Estate Costs with Estate-Tax-Free Dollars ix

10 Effect of Life Insurance Transfers on Federal Estate Taxes Gifts of Life Insurance Policies Adult Children s Insurance Trust Bypass Trust How a Bypass Trust Works How An Irrevocable Life Insurance Trust Works How Bypass and Irrevocable Life Insurance Trusts Work Bypass and QTIP Trusts How Bypass and QTIP Trusts Work Using the Applicable Exclusion Amount Today Deceased Spousal Unused Exclusion Amount Estate Planning Analysis Estate Analysis Data and Assumptions - Fact Finder Estate Summary Simple Will Estate Analysis Simple Will Estate Summary Bypass Trust Estate Analysis Bypass Trust Estate Summary Bypass and Irrevocable Life Insurance Trusts Estate Analysis Bypass and Irrevocable Life Insurance Trusts Estate Options BUSINESS PLANNING Basic Business Concepts Business Owner Planning Needs Retirement and the Business Professional Basic Types of Business Organizations Advantages and Disadvantages of Corporations S Corporations Limited Liability Companies Business Events Checklist Employment Practices Liability Insurance Income Tax Tables for Estates - Trusts - Corporations Business Continuation Business Continuation Analysis Data - Fact Finder Meet the Business Planning Team Types of Corporate Continuation Plans Importance of a Business Continuation Plan Commonly Asked Business Continuation Questions Buy-Sell Agreement Buy-Sell Agreement - Partnership Buy-Sell Agreement - Sole Ownership Buy-Sell Agreement - Corporation Buy-Sell Agreement - Cross-Purchase vs. Stock Redemption Buy-Sell Agreement - S Corporation Cross-Purchase Buy-Sell Agreement Cross-Purchase Buy-Sell Agreement with Three or More Owners Buy-Sell Agreement - Limited Liability Company (Single-Member LLC) Buy-Sell Agreement - Limited Liability Company (Member-Managed LLC) Buy-Sell Agreement - Limited Liability Company (Manager-Managed LLC) Stock Redemption Plan Wait-And-See Buy-Sell Agreement Trusteed Corporate Buy-Sell Agreement Making Buy-Sell Agreements Acceptable to the IRS Corporate Distributions to Redeem Stock x

11 Corporate Stock Redemption (IRC Sec. 303) Business Succession - Selling Your Business Family Attribution Methods of Funding a Buy-Sell Agreement Who Should Own the Policy? Taxes on Premiums Paid by a Corporation Transfers for Value Reasons to Value a Business Business Valuation Factors Valuation Methods Explained Advantages and Disadvantages of Valuation Methods Business Valuation Discount and Capitalization Rates Business Valuation Per Share Using The Courtroom Method Time Delay in Closing Contested Estates Odds of Disability Disability of a Business Owner Business Overhead Expense Disability Buy-Out Cross-Purchase Agreement Disability Buy-Out Stock Redemption Plan Key Employee Insurance Methods of Valuing a Key Employee Financing the Replacement of a Key Employee Key Employee Coverage Issues Protecting Against the Loss of a Key Employee Key Employee Disability Plans Business Continuation Needs Ways to Pay for Business Continuation Benefits to Business Owners Qualified Deferred Compensation Plan (IRC Sec. 457) Nonqualified Deferred Compensation Plan Nonqualified Deferred Compensation [Avoiding Constructive Receipt] Rabbi Trust Secular Trust Split-Dollar Arrangement Federal Taxation of Split-Dollar Arrangements Split-Dollar Arrangement (Deferred Compensation - Collateral Assignment Method) How Split-Dollar Collateral Assignment Works Split-Dollar Arrangement Endorsement Method Split-Dollar Arrangement Funding an Irrevocable Life Insurance Trust How Split-Dollar Funding a Life Insurance Trust Works Split-Dollar Arrangement Funding a Cross-Purchase Agreement How Split-Dollar Funding a Cross-Purchase Agreement Works Executive Carve-Out Plan Executive Bonus Arrangement How an Executive Bonus Arrangement Works Restricted Executive Bonus Arrangement How a Restricted Executive Bonus Arrangement Works Employee Stock Purchase Plan Employer-Owned Life Insurance Executive Long-Term Care Incentive Stock Option Life Insurance in the Business World Non-Statutory Stock Option xi

12 CHARITABLE PLANNING Gifting Techniques Considering a Charitable Gift Charitable Giving Techniques Charitable Income Tax Deduction Charitable Gifts and Estate Taxation Qualified Conservation Easement Unrelated Business Taxable Income Charitable Remainder Annuity Trust (CRAT) How a Charitable Remainder Annuity Trust Works (CRAT) Charitable Remainder Unitrust (CRUT) How a Charitable Remainder Unitrust Works (CRUT) Charitable Remainder Trust Numerical Tests Other Charitable Considerations Charitable Gift Annuity (CGA) How a Charitable Gift Annuity Works (CGA) Taxation of a Charitable Gift Annuity Donor-Advised Funds Pooled Income Fund (PIF) How a Pooled Income Fund Works (PIF) Charitable Lead Annuity Trust (CLAT) How a Charitable Lead Annuity Trust Works (CLAT) Charitable Lead Unitrust (CLUT) How a Charitable Lead Unitrust Works (CLUT) Supplementing Retirement Income With a CRUT Asset Replacement Trust Life Insurance Charitable Plan Private Foundations Supporting Organizations Charitable Remainder Trust Analysis Charitable Remainder Trust Data and Assumptions - Fact Finder Charitable Remainder Annuity Trust Wealth Replacement Trust (CRAT) Charitable Remainder Unitrust Wealth Replacement Trust (CRUT) ADVISOR SUPPORT Planning Tools Agenda for Discussion Agenda Business Owner Planning Needs Planner Input Sheet Receipt for Documents Planning Task List Action Items Goals Client Referral Business Owner Planning Needs Divorce Checklist Beneficiary Audit Checklist Financial Review Checklist Life Events Checklist Recommendations xii