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Your Vision · Our Team

2021- The year with the most planning issues to discuss in my 25-year career

Never before in my career have I witnessed the number of planning issues that need to be addressed compared to what is occurring this year.

This list includes some of the issues that everyone needs to keep in mind as we move forward in 2021:

Stock Market

  • The market is at an all-time high with inflation increases for this last quarter as indicated by Big Charts from Market Watch as of June 2, 2021.
    • What happens next? Is a significant market correction imminent?

The Bond Market

  • Historically low yields.
    • What do I do for safe income?
    • Where can I put my low-risk investments in instead?

FinTech (Financial Technology)

  • New products and systems are being created.
  • Is cryptocurrency something I should invest in?
    • Where does it fit in my portfolio?
    • What are the risks and benefits?
    • Are trading platforms such as Robin Hood something I should use?
    • What are the advantages and disadvantages?

Legislative Changes

  • Required minimum distributions on IRA accounts have been pushed back from age 70 ½ to 72 and may be pushed further to age 75.
    • What does that mean for me?
  • Inherited IRA rules for non-spouse beneficiaries have changed.
    • The stretch IRA has been cancelled, except for those that were already in place, which are grandfathered in.            
    • The new rule is a required 10-year distribution time limit (excepting for some eligible designated beneficiaries). The same rule applies to traditional IRAs and Roth IRAs
    • Action to take:
      • Update your wills and trusts, especially if you have a conduit trust.
  • Many new tax law changes are being debated. These are not in effect yet and may not come to fruition.
    • What is on the table?
      • Capital gain taxes may increase.
      • The step up in cost basis may be removed.
      • The estate tax may be lowered for the first time in history.
      • The §1031 exchange may be eliminated.
      • Tax on social security income may increase.
      • The IRMMA surcharge on Medicare premiums Part B and D may increase.
        • Actions to take:
          • Business owners review your estate planning and succession plans.
          • Everyone needs to understand how the increased expenses will impact their financial plans.

Life Insurance

The first change since 1984 on the Modified Endowment Contract (MEC) rules.  (H.R.133 - 116th Congress (2019-2020): Consolidated Appropriations Act, 2021.)

  •  
    • Action to take:
  • Review any existing life insurance contracts to determine:
    • What is its purpose?
    • How has the cash value performance been?
    • What are the riders on the policy?
  • Make sure you compare your existing policies to the new policies that will be coming out.
  • If you make over $100K per year, make sure you check out premium finance life insurance.
  • With the historically low interest rates and the change in the MEC rules a person can now increase their protection, income and reduce their risk for retirement income planning.
  • If your term life insurance policy does not have accelerated benefit riders as part the of the policy, you need to review a policy that offers them.

Long Term Care Insurance

A critical planning issue to evaluate for retirement planning. There are more strategies to consider for this type of coverage than ever before.

Retirement Plans

If you are a small business owner who has a 401K plan for your business and you have not had a competitive audit in the last two years, your plan is probably too expensive and out of date regarding technology support.

An IRA can be rolled into a profit-sharing plan and be converted to life insurance to get a discount on the tax paid compared to tax you would otherwise pay. This is a very tax efficient strategy to avoid required minimum distributions and paying future income taxes.

 

Need Help?

Contact us. Our team has the knowledge and the capability you need.

weyers_jay@nlgroupmail.com

815-455-5292

 

Written by: Jay Weyers, CFP®

Weyers McKeever Financial Partners

Your Vision · Our Team

 

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Living Benefits are provided by no additional premium Accelerated Benefit Riders. Riders are supplemental benefits that can be added to a life insurance policy and are not suitable unless you also have a need for life insurance. Riders are optional and may not be available in all states or on all products. This is not a solicitation of any specific insurance policy.

 

Certified Financial Planner Board of Standards Inc. (CFP Board) owns the certification marks CFP® and CERTIFIED FINANCIAL PLANNER™ in the U.S., which it authorizes use of by individuals who successfully complete CFP Board's initial and ongoing certification requirements.
 

CFP® professionals are held to strict ethical standards to ensure financial planning recommendations are in your best interest. What's more, a CFP® professional must acquire several years of experience related to delivering financial planning services to clients and pass the comprehensive CFP® Certification Exam before they can call themselves a CFP® professional. (http://www.letsmakeaplan.org/why-choose-a-cfp-professional)

 

 

 

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