Think Before You Take That First Step!

I recently received the following question from an attorney and wanted to share it with you because it could help you as you work with and support your clients and friends who have the same situation. “‘My father asked me, ‘Now that I have turned 65, I plan to draw on your mother’s Social Security benefit and continue working. How do I go about doing this?’ My parents are both 65, are highly compensated ($300,000 plus), and plan to continue working into the foreseeable future. Is this a good idea?”

After I fell out of my chair, I asked the attorney where his father got this idea. He said an insurance agent trying to sell him Medicare Advantage suggested this as being a good strategy. Good is a very subjective word. Also, not knowing all of the facts and circumstances is problematic. However, more likely than not, this is not a good idea. Claiming a Social Security retirement benefit sooner than it is needed can be a costly mistake. The mistakes in this scenario are found by looking at the Social Security rules, the income tax rules; as well as, general principles for retirement planning. [Read more…]

Home for the Holidays

The holidays provide a time to reconnect with family members. So this is an appropriate time to discuss the family of financial planners. For decades, this financial planning family, as covered by the financial press, has included Chartered Financial Consultants® and CERTIFIED FINANCIAL PLANNERSTM. One family member absent from the published festivities has returned—the CPA Personal Financial Specialist (CPA/PFS).

In this season I am reminded of the critical role of CPAs in the financial planning process because of another cyclical event: the recruiting of CPAs by financial services firms. About every ten years financial services firms go on a binge to recruit CPAs to both refer business (and share in compensation) or to recruit the CPA into Financial Planning, asset management and product sales. The economy has recovered and the season as begun anew. Some recent headlines that have come across my desk are: “10-Step Plan to Meet More CPAs” and “What CPAs Want.” The articles opine that financial services firms through “strategic arrangements” with CPAs hope to provide financial services and products to the CPA’s clients. [Read more…]