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
Read MoreProsperity 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
Read MoreProsperity 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
Read MoreProsperity 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
Read MoreLife 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
Read MoreCollateral: Alternatives to Borrowing from the Life Insurance Company
Those advisors that are “whole-life friendly” know the many advantages of a whole life insurance policy to its policyholders, and the options that are available with a little creativity and a prosperity mindset. One of the primary advantages of a policy is the ability to borrow against the policy’s cash value and secure a loan straight from the insurance company—without the long approval process of a bank loan. While beneficial for a number of reasons, borrowing against the policy is not always the best strategy depending on your client’s desires.
Read More7 Blind Spots of Financial Advisors
Even a seasoned financial advisor can be vulnerable to certain blind spots within the field, what matters is recognizing and learning from these blind spots. Here we have gathered a list of the seven major areas in which advisors can falter, to save you from the same oversights. 1. Forgetting Time Value of Money As an advisor, the time value of money must be applied to every calculation, and any calculation that does not take this into account is not accurate. Every dollar has a value that increases over time,
Read MoreHow To Show Your Clients the True Cost of College
The Education Calculator is a tool that illustrates the true cost of college to your clients and creates the basis of a savings model. The numbers may seem straightforward, but the calculator allows you to factor in the yearly rate of increase in tuition and interest on student loans. It is simple to toggle between student information or parent information, which illustrates the base cost and the amount needed to be saved by the parents. The calculator can accommodate the information of up to ten children, making the total cost
Read More7 Ways To Use The Death Benefit
In this recent presentation, Truth Concepts™ did for The National Network of Estate Planning Attorneys we demonstrate how to determine the rate of return on the cash value of a policy as well as take you through the 7 ways to use the death benefit. This is also a good tutorial on the use of the Funding, Diversification and Distribution calculators.
Read MoreBorrowing Against Whole Life Insurance at a Bank
This post originally appeared as an article on Kim Butler’s Partners for Prosperity website at www.partners4prosperity.com/collateral We thought this to be valuable information to also share with the Truth Concepts community. We get many questions on using life insurance policies with cash value as collateral for bank loans. First, you can ONLY borrow against a policy with cash value, such as whole life insurance. You cannot use this strategy at all with a term insurance policy. Often, local (as opposed to large/national) banks and credit unions will lend against the cash
Read MoreShould I Borrow Against My Life Insurance Policy?
“Should I borrow against my life insurance policy?” Are you ever asked that question? I bet you are. Recently we conducted an annual review with a client. This client is a transfer client. They moved to our town about 8 years ago. About the same time, their other advisor retired so we were lucky. The conversation was very informative and because of the Truth Concepts calculators, the whole truth was easily demonstrated. Let’s join the conversation partly through the review….. “I am going to purchase a new car this summer,”
Read MoreAm I Too Old To Buy Whole Life Insurance?
“I wish I would have known the whole truth about whole life insurance 40 years ago so I could have taken advantage of all the benefits you have described to me,” a brand new prospective client said to me. “I love what you are saying and it makes so much sense, but I am just too old to implement what you are talking about. At my age, it will just be too expensive. But it scares me to death thinking about running out of money.” “Many of our clients say
Read MoreHave I Saved Enough Money?
Andrew Walberg and I had been friends since first meeting in Mr. Carlson’s government class when we were juniors in high school. He was so much fun to be around, always positive and upbeat. I had not heard from him in a while so I was surprised to hear his voice on the other end of the telephone. “Hey, this is Andy. How have you been? I’ve known you’re in the financial services business, but I have never taken the time to talk to you,” he started. “I want to
Read MoreIs It Better to Rent A Home Or Buy?
In this article, I am going to tell you something you already know or may think you fully understand. It starts with this question—is it better to rent a home or buy? The overwhelming response to that question seems to be that it is better to purchase a house instead of renting one. Although I’m sure you answered that it is better to purchase a home, I am going to use Truth Concepts calculators to prove it to you. Don’t stop reading because you think you know it all. Stick
Read MoreThe Staggering Impact of Taxes On Investment Returns
The purpose of this post is not to make any kind of political statement. We are not trying to say one side is right or one side is wrong. The purpose of this post is to simply show mathematically something that politicians should understand. More importantly, you as a financial professional should understand this because the impact of taxation on our wealth is significant – significant enough that positioning our money in a tax-advantaged situation is one of the most competitive advantages possessed by whole life insurance. To illustrate the
Read MoreHow To “Retire” With Enough Money, Plus a $4,588,332 Cushion (John & Jane Jones Pt. 9 of 9)
Time has a way of flying by. John and Jane were now 71 years old. This meeting was going to be one of the most important meetings I would ever have with them. This meeting was certain to prove to them that following my advice all these years was going to pay off. As a result, I did a little extra preparation for the meeting by gathering information about the current cash values of their policies and their other assets. Their 401(k)’s had about $470,000 combined. The cash value of
Read MoreWhy You Shouldn’t Retire, You Should Retool (John & Jane Jones Pt. 8 of 9)
“I am ready to retire,” John was quick to state at the beginning of our annual meeting. There were several things I wanted to talk to John and Jane Jones about this year since they would be soon turning 60. But when I heard John say this, my plans for the meeting took a back seat. “Are you serious?” I asked John. “Do you think you are ready to retire?” “I have no idea,” John answered. “I am making nearly $185,000 a year, which is a lot more than what
Read MoreHow Much Does College Really Cost? (John & Jane Jones Pt. 7 of 9)
John and Jane met with me regularly, mostly to touch base about their progress as they improved their financial position, or to discuss potential investments. But when their oldest son, Todd, turned 16, we met to discuss a major item that impacted their entire family. Both John and Jane were now 48 years old. During my telephone call to set a time and date for our meeting, John made a comment about how frustrated they were because of their boy. Todd was not a very serious student and his grades
Read MoreHow to Calculate Rate of Return On A Real Estate Investment (John & Jane Jones Pt. 6 of 9)
“Hello, this is John Jones. I know we have called a number of times with ‘opportunities’ but this time I think we really have one,” John said excitedly as I answered the telephone early Monday morning before my first appointment. “That is good news,” I said. “Do you want to tell me about it over the telephone or come in for a sit-down meeting?” I asked. “How about tomorrow?” John asked. “We can come anytime you are available.” “I am fairly booked up, but this sounds like an important issue
Read MoreSaving For Kids and Avoiding The MEC Limit (John & Jane Jones Pt. 5 of 9)
One week earlier….. “Hello, John how is your day going?” I initially said when I called. “Just fine, thanks,” John responded. “I know why you are calling; it has been a few years since we have been able to get together and we need to speak with you because we have been having some big changes in our family. Jane and I have been meaning to get in touch with you each time we get your email or card in the mail.” “I never want to be a pest, but
Read More15-Year vs 30-Year Mortgage: Which is Better? (John & Jane Jones Pt. 4 of 9)
“I am so glad you two were willing to come back so soon after our third meeting,” I greeted John and Jane as they came into the office. “There are a number of things I want to discuss with you, but before I do, do you have any questions?” “As a matter of fact, we do have something we wanted to talk to you about. Since our meeting last week, Jane and I have decided we need to discuss more of our financial decisions with you,” John said. “We should
Read MoreThe Whole Truth About Qualified Plan Contributions (John & Jane Jones Pt. 3 of 9)
Mark Twain reportedly said that he tried to not let his schooling get in the way of his education. I think he was describing a paradox similar to what most advisors know as the “arrival syndrome.” Said in yet another way, your education should be an ongoing process. Such is the case with your clients. We recommend that you schedule regular discussions to help your clients understand the whole truth about money. And, of course, we are totally biased in thinking the best way to help your clients, is by
Read MoreThe Myth of Zero Percent Financing for Cars (John & Jane Jones Pt. 2 of 9)
Both Jane and John Jones were smiling as they walked into my office for the second meeting with them. The first meeting had gone well and I was excited to meet with them. After a few minutes of catching up and pleasantries, I asked John, “If you were talking to a good friend and they asked what our office was doing for you, what would you tell them?” John was contemplative for a moment and then started to speak. “Well the first thing I would tell them is that you
Read MoreHow $155 in Credit Card Debt Becomes $38,850 In Payments! (John & Jane Jones Pt. 1 of 9)
In the movie Mr. Mom, Jack (Michael Keaton) is fired from his job as an automobile engineer. Jack’s wife, Caroline (Teri Garr) lands a job before he can, so Jack takes on what he believes is the easy job of homemaker and caretaker. The movie has many humorous scenes. One particular scene Caroline’s boss comes to pick her up for a business trip. Jack does not want to come across as some helpless person so quickly gets in work clothes and comes into the house carrying a chainsaw. He asks
Read MoreHow do you include the state income tax for capital gains tax?
Increase your capital gains rate box by the state income tax rate. Increase your state income tax rate is 7% and your clients’ federal capital gains tax rate is 15%, then you’ll put 22% in your capital gains rate box. Please note: there is not a federal capital gains tax deduction for the state income tax paid as there is for federal income tax. See the calculation below: This first part the software handles automatically. INCOME TAX [ezcol_1half]Federal Income Tax Rate Federal Capital Gains Tax Rate State Income Tax Rate [/ezcol_1half]15% 15% 7% [ezcol_1half_end][/ezcol_1half_end]
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