Financial E-News - November 15, 2020 Edition
Announcement: New Content Update Due to a few IRS changes, the VSA now has 2 Uniform Lifetime Tables. One to calculate required minimum distributions prior to 1/1/2022 and another to calculate required minimum distributions after 1/1/2022. Sign in now to see the updated Tables Online Menu.
Life In These United States... The election of a new president shouldn’t obscure the fact that, in less than 10 months, the United States went from one known coronavirus infection to 10 million as of November 9. Add to that the facts that the most recent one million infections happened in just 10 days and the infection rates keep rising in most states. More than 240,000 people in the U.S. have died from Covid-19, a number that will inevitably keep rising. On the positive side, the Pfizer Covid-19 vaccine is showing very promising early results.
What follows is some information that we hope will be of interest and assistance to you during these challenging times. FED WARNING – The Federal Reserve warned that “the United States may still face a wave of debt failures and ‘significant declines’ in asset prices because of the coronavirus pandemic and recession.” In other words, we ain’t out of the woods yet! RMD CHANGES TO COME? – On November 10, the Supreme Court heard oral arguments in the latest case to come before the high court. At its most basic, the case revolves around whether the zeroing out of the penalty for not having insurance invalidates the entire law. Click here for a deeper discussion of what may happen and when. Oral arguments gave an early indication that the court is reluctant to overturn the law...something Congress failed to do. CLIMATE CHANGE– In a nod to the potential for climate change to cause financial risks, the Federal Reserve has applied for membership on the Network for Greening the Financial System, a group of government banks that collaborate on managing the financial risk from climate change. MEANING? – Since Regulation Best Interest took effect on June 30, industry officials have struggled to decipher exactly what “best interest” means. Part of the confusion may stem from the SEC’s failure to actually define the term “best interest” when it passed Reg BI for brokers. MEDICARE – Medicare Part B premiums will increase $3.90 a month in 2021, making the monthly premium $148.50 for most Part B enrollees. The premium increase represents about 20% of the average Social Security cost-of-living adjustment for 2021. What impact do Medicare premium hikes and small Social Security COLAs have on retirees? DEDUCTIBLE LIMITS – While IRA contribution limits remain unchanged for 2021, the phase-out ranges for deductibility of IRA contributions increased a bit. TELL ALL! - The Trump administration has made attempts to conceal at least some recipients of Payroll Protection Program (PPP) loans. A federal judge, however, has shattered secrecy around the loan program, ordering full disclosure of who received how much...”the weighty public interest in disclosure easily overcomes the far narrower privacy interest of borrowers who collectively received billions of taxpayer dollars in loans.” RMDs – The IRS has issued a new Uniform Lifetime Table used in calculating the amount of required minimum distributions (RMDs). The new table will be effective for distributions made on or after January 1, 2022 and will generally result in lower RMDs. PROTECTIONS FOR OLDER ADULTS – FINRA has revised its Sanction Guidelines in such a way as to better protect older adults...”certain investors may need additional protections.” AIG NEWS – After previously saying that it planned to split off its life and retirement operations from the rest of the company, AIG says that in order to accomplish the split, it will consider options such as an IPO or a private sale of a stake in the unit. ROBO RACE – Who is winning the competition for the digital advisory market (robo-advisor platforms), Schwab or Fidelity? According to this article, it depends on which performance metrics you consider. Meanwhile, Schwab’s purchase of TD Ameritrade is quickly resulting in the loss of approximately 1,000 positions deemed redundant. In addition, Schwab is closing 200 TD Ameritrade branches and combining the remaining 55 into nearby Schwab branches. SCAM WARNING –The IRS, together with state tax agencies and the tax industry, issued a joint warning related to a new text scam that tricks people into disclosing their bank account information in order to receive a $1,200 stimulus payment. BYE-BYE –Prudential Financial is discontinuing the sales of variable annuities with guaranteed living benefits. Why? In order to reduce exposure to changes in market conditions and interest rates. ESG RULE –The Labor Department released a final rule related to environmental, social and governance (ESG) investing, which may continue to attach compliance risk to plan fiduciaries who select ESG investments. Many experts consider this a solution in search of a problem. KISS – Here is some advice on how to keep financial conversations simple, connecting with clients by focusing on the basics. TEST YOUR KNOWLEDGE – How good is your knowledge of investment taxation? Find out here. LEAVE IT OR ROLL IT OVER? – Is it best to leave funds in a 401(k) or roll them over to an IRA? That’s the question and the answer requires “careful consideration and consultations regarding the current tax implications.” This article can help. BY THE NUMBERS – More of our ever-popular “numbered” articles are back again:
New Year...New Strategy
VSA subscribers are still providing a valuable service to their clients throughout this COVID pandemic. Here's what they are using:
Take advantage of our 7-day free trial for access.
Let's get Social! Stay up to date with new releases and what is going on within the industry. We look forward to connecting with you.
Copyright © 2019 Financial Services Online, Inc. All rights reserved.
|