by Elizabeth4TC | Dec 13, 2019 | Comments Off on Truth Tip, Capital Gains Tax in Asset Flow
Hello, new update! Asset Flow is known as our “everything-AND-the-kitchen-sink” calculator, and it just got another feature! Todd has added the ability to tax income at capital gains rates, in addition to the regular income tax rates. This is a great tool for clients who might have income coming from a trust, real estate, or other property that is taxed as capital gains. The update allows for an individual portion of the income to be taxed at this rate so that it won’t impact the tax brackets of other income.
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by Elizabeth4TC | Nov 27, 2019 | Comments Off on Fiduciary Responsibility and Integrity
As a rule-based society, have we ignored the root of the problems—the reasons the rules were created in the first place? Of course, we need rules to function as a society. Without regulations, we’d have chaos. If we didn’t mandate that in the United States we drive on the right side of the road, the roads would be chaos. But what about over-regulation? When rules are created on top of rules, we miss a major part of the conversation. Morality. Integrity. Principles. No matter how many rules are created, you
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by Elizabeth4TC | Nov 6, 2019 | Comments Off on Truth Tip, 401(k) Matches in Asset Flow
When you’re analyzing a 401(k) in Asset Flow (the Tax-Advantaged section), you need to pay special attention to how you add the employer match. The results will differ depending on one factor: whether you entered the match as a percentage of the employee contribution, or as a dollar amount. If you entered the match as a dollar amount, you will need to manually stop the match by zeroing out the contributions in the employer match column. This prevents the match from continuing further than intended. If the employer match is
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by Elizabeth4TC | Nov 6, 2019 | Comments Off on Truth Tip, Canadian Tax Charts
The latest software update includes the availability of Canadian tax charts. This new feature is available in the Tax Chart tool, Asset Flow, and Accumulation. Previously, you could only toggle between the filing status of Married or Single. Now, in the same drop-down menu, you can select a region. This functions the same way within Asset Flow and Accumulation, as it does in the Tax Chart tool.
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by Elizabeth4TC | Oct 29, 2019 | Comments Off on Using the Truth Concepts App
The new Truth Concepts app has launched, providing an opportunity for anyone to make financial calculations at their fingertips. The beauty of the app is that you can use it on the go, which means you’ll have easy access to it when you’re buying a car, looking at loan options, or making other big financial decisions. This is an app that empowers anyone making financial decisions and is available to everyone. The new app carries our five basic financial calculators: Present Value, Future Value, Periods, Payments, and Interest Rates. We’re
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by Elizabeth4TC | Oct 16, 2019 | Comments Off on The Myth of “Buy Term and Invest the Difference”
We’ve all heard the advice to buy term insurance and invest the difference (the difference of premium between term and permanent insurance). This is a classic recommendation made by typical financial planners, but is it the best method for your clients? By now, you likely know that we’re whole-life friendly, but we’ve done the work to dispel the myth ourselves. Our First Thoughts? Your clients should buy term insurance (if it’s right for them). There’s no issue with term insurance itself—it’s a way for your clients to protect their families.
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by Elizabeth4TC | Sep 30, 2019 | Comments Off on Testing a Theory: Will Large-Scale Retirement of 401(k) Owners Affect the Stock Market?
The rumor mill is swirling with the notion that stock market is due for a crash any time now. As difficult as the market can be to predict, is the rumor really far off the mark? If you look at past data, recessions are a natural part of the economic cycle…and even the longest economic expansion only lasted 10 years. The ten year mark for our current expansion is fast approaching, and the warning signs are starting to pop up. We’re not endorsing a crash, but preparation for events like
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by Elizabeth4TC | Sep 11, 2019 | Comments Off on Gross vs. Net Dividends: How Truth Concepts Can Help
Dividends are a tough topic—from defining a dividend, to options for receiving dividends. Dividends also work differently with whole life insurance than they do with stocks. So where do you start when working with a client? It is crucial to know the difference between gross dividends and net dividends. When mutual companies make a profit, they are required by law to distribute those profits amongst all owners. Policy owners of participating whole life insurance are considered partial owners of the life insurance company, and are therefore able to partake in the
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by Elizabeth4TC | Aug 14, 2019 | Comments Off on Truth Tip, Saving Asset Flow Files
Asset Flow is one of those awesome and mind-boggling calculators that truly does it all. That’s why we love to talk about what it can accomplish. One fantastic feature is that it plays well with our other calculators. It’s important to note, however, that there is a trick to saving it with another calculator in one file. If you have already saved Asset Flow, keep it open when pulling another calculator up. For example, if the Real Estate Calculator is open, ensure that Asset Flow is also open. Otherwise, when
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by Elizabeth4TC | Aug 14, 2019 | Comments Off on Truth Tip, Using Two Screens
Did you know there’s a function in the Truth Concepts software that creates more fluidity if you’re using two screens? The power of two screens is amazing—we hope you’re taking advantage of the productivity boost. And if you’re anything like Todd, you’re even using three or more screens. Two screens are especially useful if you enjoy pulling up multiple calculators and spreading them out. Typically, it can take extra effort when you’re ready to move back to one screen, but we’ve made it simple. At the bottom of the “Tools” drop-down
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by Elizabeth4TC | Jul 31, 2019 | Comments Off on Automobile Purchases and Opportunity Cost
Have you ever tried explaining a concept like opportunity cost to a client that just doesn’t click? Chances are, the answer is yes. As financial professionals, it’s easy to fall into a routine because we understand the principles. For a client, however, this could be their FIRST introduction to a concept. So how do you demonstrate a concept in a way your client can understand? Our last post discussed opportunity costs, and why the concept is crucial to your client’s finances. The difficulty lies in the education of opportunity costs—it
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by Elizabeth4TC | Jul 5, 2019 | Comments Off on Addressing Opportunity Costs with Clients
Rarely do people enjoy thinking about opportunity costs—but factoring those costs into our daily lives is the key to making more meaningful decisions. In our personal lives, we can relate opportunity cost to the cost of doing one activity over another. Our time is valuable, so how do we make the most out of each moment? In finance, opportunity cost is measured in choosing one investment over another, or choosing a typical savings account over a whole life policy…or any number of decisions. This subject can be hard to broach with
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by Elizabeth4TC | Jun 21, 2019 | Comments Off on Truth Tip, IRAs in Asset Flow
In the Tax Advantaged section of Asset Flow, the “IRA Account” button is used to keep IRA accounts for spouses separate. This is largely for tax purposes because the cost basis of all assets, for each spouse in an IRA, are considered in the cost basis determination. If there is no cost basis, check the “Tax Deductible Contributions” box. Otherwise, the account will use all contributions in the first few years as a cost basis to offset the distributions, rather than spreading them out. Turning the button on will divide
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by Elizabeth4TC | Jun 21, 2019 | Comments Off on Truth Tip, “Old Money” in Asset Flow
All Present Value dollars in our calculators are assumed to be old money—dollars that the client already has access to when beginning an illustration. If an asset is then added as a Present Value, without that money being pulled from existing dollars, data will appear skewed. When illustrating a client’s money being pulled into a new asset, make sure that money exists elsewhere in the illustration. First, you’ll want to ensure that the money being shifted into a new asset is accounted for in the initial Ordinary Taxable Account. When
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by Elizabeth4TC | Jun 21, 2019 | Comments Off on Truth Tip, State Taxes in Asset Flow
When state tax is entered into Asset Flow, the calculator assesses a tax on Social Security. This tax is based on the benefit amount that is subjected to tax on the Federal Side. If you don’t want this to occur, leave out the state tax rate. Currently, the calculator adds the state tax to anything that is also taxed federally (after those federal deductions). Then there is an offset for the tax paid. This offset is taken off of the Federal Income Tax Basis, up to the SALT limits ($10,000).
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by Elizabeth4TC | Jun 21, 2019 | Comments Off on Truth Tip, Calculating for COLA in Asset Flow
When using the Asset Flow calculator, it is important to calculate for COLA (cost of living adjustment) when determining Social Security income. The Future Value calculator is a handy tool in this case. To set this up properly, fill in the fields as such: Present Value; the annual payment (multiply the monthly payment by 12). Rate; the annual interest rate. Time Frame; the difference between current age and distribution age. If you use the resulting number in Asset Flow as the benefit for Normal Retirement Age, the value will
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by Elizabeth4TC | May 31, 2019 | Comments Off on Truth Tip, Order of Taxation in Asset Flow
In Asset Flow, we chose to treat each individual asset viewed as the last dollar added or withdrawn in the tax bracket (at the margin). This is because any changes made will impact the overall taxation in that regard. However, when you view all the assets in the summary page, the taxes are equally distributed among all of the assets causing the tax. This can cause some discrepancies when viewing an individual asset against the summary of all assets. In Asset Flow, this means it is possible for an individual
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by Elizabeth4TC | May 31, 2019 | Comments Off on Truth Tip, Social Security Taxes
Do you know how much of your Social Security can be taxed? Up to 85% of Social Security Benefits can be subject to income tax, though it can be confusing to understand exactly how to calculate. First, your Modified Adjusted Gross Income (MAGI) must be calculated, which determines the amount of income affecting tax on Social Security income. The calculations for your MAGI do not get to use personal or Standard Deductions to reduce the amount, nor does the Standard Deduction work against Social Security income. In conclusion, the SS
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by Elizabeth4TC | May 17, 2019 | Comments Off on Prosperity Proof #5: The Truth About Qualified Plans
In this final prosperity proof, we’re going to cover one of the most misunderstood financial vehicles: qualified plans. Job seekers today are taught to look for companies that offer qualified plans with an employer match–“It’s free money!” Plenty of financial advisors advocate for qualified plans, and plenty of clients funnel as much money as they can into said plans. While qualified plans are not bad, they cannot be considered a savings vehicle, or even the most viable retirement plan, when you consider the facts. When you look at the facts,
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by Elizabeth4TC | May 3, 2019 | Comments Off on Prosperity Proof #4: Permanent Life Insurance Primer
Universal Life Insurance or Whole Life Insurance? Both are permanent life insurance, but they are not equal. In our fourth Prosperity Proof, we’ll let the differences speak for themselves A PROSPEROUS lifestyle is made possible by having a vehicle to store and save cash that is ALSO accessible and liquid. And that’s where permanent life insurance comes in! But just because you’ve identified that your client is ready for life insurance, doesn’t mean there aren’t some misconceptions left to tackle. Universal Life Insurance is the route that typical financial planning
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by Elizabeth4TC | Apr 19, 2019 | Comments Off on Truth Tip, Asset Flow
In the Asset Flow calculator, you can roll a tax-advantaged account into a new account (like a spouse’s account) at death. It must be done manually, as the calculator is designed to show what happens at liquidating. In Asset Flow, show the principal amount distributed at death going into another IRA (or similar) account the next year with the “Tax Deductible Contributions” box checked. The tax deduction in the new account will offset the taxes paid in the old account for a net “0” tax. You will, however, have to
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by Elizabeth4TC | Apr 19, 2019 | Comments Off on Prosperity Proof #3: What is Prosperity Economics?
Last week we compared home mortgages, and this week we’re going to turn to something more conceptual again. We’ve talked about the Principles for Prosperity, so how do we break down what really sets the movement apart? What is Prosperity Economics? Prosperity Economics is a paradigm shift, totally different from the mindset that typical financial planning builds from. Typical Financial Planning…meets needs and goals only. It’s based on limited ideas of “what you can afford.” It keeps you where you are. Prosperity Economics…pursues wants and dreams. It’s based on unlimited
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by Elizabeth4TC | Apr 5, 2019 | Comments Off on Prosperity Proof #2: Choosing the Right Mortgage
When choosing a mortgage loan, it’s essential to look at all of the facts. Buying a home is a huge financial decision. Being equipped with the right knowledge will ensure you and your clients have the right strategy. A 15-year mortgage has the appeal of a quick payoff, but is it better than a 30-year mortgage? Some people would say yes. We’ll show you how to figure it out. In this installment of Prosperity Proofs, we’ll compare a “typical financial planning mortgage” to a mortgage in line with the Prosperity
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by Elizabeth4TC | Mar 22, 2019 | Comments Off on Prosperity Proof #1: Seven Principles for Prosperity
Join us for the first installment of a series of blog posts: Seven Proofs for Prosperity. Over the course of the series, we’re going to cover what it means to meet financial challenges with a prosperity mindset, and how that can help you and your clients. It all begins with our Seven Principles for Prosperity, from the Prosperity Economics Movement. Here at Truth Concepts, we look at the Truth in financial matters. Part of that Truth comes from applying principles that promote a prosperity mindset—flipping the script from scarcity and
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by Elizabeth4TC | Mar 8, 2019 | Comments Off on Life Insurance Values Tool, Importing Lafayette Life Data
Though the calculators are the meat of the Truth Concepts software, the tools included are an invaluable time-saving resource. In calculators such as Funding, Borrowing, Diversification, Accumulation, Distribution, and Asset Flow, the Life Insurance Values tool cuts the workload significantly. Rather than continually copying & pasting life insurance values, you can import life insurance illustrations directly into your calculator from previously stored data. So where does that data come from? Fortunately, there’s no initial copying & pasting at all. Instead, you can import the information straight from an insurance illustration
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