The Financial Procast

(Complete Show Notes Below) In the 48th episode of the Financial Procast: Letter to 6,000 401(k) Sponsors Causes a Stir Yes indeed...there are a great many financial advisers who are running around with their hair on fire after many of their plan sponsor clients received letters from Ian Ayres, a Yale Law School professor, stating that the 401k plans they are responsible for monitoring/controlling are a bit heavy on the expenses. Over the last few weeks, these letters were sent to employers and have caused more than a few to raise their eyebrows.  Evidently this is all part of a study that Mr. Ayres is conducting to measure "the relative costs to 401k participants of menu limitations, excess fees and investor allocation mistakes." The letters remind the plan sponsors of their fiduciary duty to the plan and of the stringent nature of the laws surrounding fiduciary liability.  Perhaps this is all meant to be a warning as Professor Ayres says the results of the study are to be released in the spring of 2014.  This gives the plan sponsors a bit of time to "right the ship". Wells Fargo Doesn't Make Payday Loans...Just Direct Deposit Advance Loans, Which Are Much Worse An elderly customer of Wells Fargo in Sacramento, CA just testified before a Senate Special Committee on Aging hearing on payday loans and older Americans.  The now 69-year old lady told the committee her story of borrowing $500 from her local Wells Fargo branch to make needed repairs on her truck.  That was in 2007. Since then she's paid Wells Fargo more than $3,000 in "fees" as she's been caught up in a vicious cycle of robbing Peter to pay Paul.  Check this story out for yourself here, you won't believe how it ends! Didn't we bailout Wells Fargo with more than $25 billion in taxpayer funds?  Yea, I thought so.  

(Complete Show Notes Below) In the 47th episode of the Financial Procast: Why Do Ratings and Financials Really Matter for Life Insurance Companies? If you read through any marketing collateral from life insurance companies you'll see all sorts of touting related to their various A+, A++, AA+, etc. ratings.  But what does any of that ... Keep Reading

(Complete Show Notes Below) In the 47th episode of the Financial Procast: Why Do Ratings and Financials Really Matter for Life Insurance Companies? If you read through any marketing collateral from life insurance companies you'll see all sorts of touting related to their various A+, A++, AA+, etc. ratings.  But what does any of that mean and why should you really care about any of it? Today, we go through a fairly extensive and somewhat cerebral discussion of the numbers that matter, we walk line by line through compiled data of the whole life insurance industry and discuss the numbers that matter, why they matter and how that can effect overall policy performance.  Ultimately, how the numbers impact your policy performance is what's really important.  Ratings from rating agencies are there to give you a general idea but should by no means be the only metric used to evaluate a company's ability to deliver above average performance. Most ratings are given to companies based on their financial "stability" and the ability of the company to meet its current obligations i.e. their ability to pay death claims as they arise in the future.  While no doubt important, it doesn't provided a clear indication of how well a policy's cash value will perform and for most of our clients, this is THE reason they are using the policy. To find out that level of detail, we have to dig a little deeper.  This is something we do on a regular basis as new data is available on a quarterly basis and this keeps our list of potential companies fairly tight. We promise a more entertaining podcast next week but hope you are able to harvest a few diamonds from this one as well...enjoy!

(Complete Show Notes Below) In the 46th episode of the Financial Procast:  DISCLAIMER: LEGAL, INVESTMENT AND TAX NOTICE: This information is not intended to be and should not be treated as legal advice, investment advice or tax advice. No one under any circumstance should rely upon this information as a substitute for obtaining specific legal ... Keep Reading

(Complete Show Notes Below) In the 46th episode of the Financial Procast:  DISCLAIMER: LEGAL, INVESTMENT AND TAX NOTICE: This information is not intended to be and should not be treated as legal advice, investment advice or tax advice. No one under any circumstance should rely upon this information as a substitute for obtaining specific legal or tax advice from their own legal or tax advisors. OPINIONS EXPRESSED are exactly that...opinions and are subject to change without notice. Information has been obtained from sources believed to be reliable, but its accuracy and interpretation are not guaranteed. It Appears James Gandolfini's Family May Get Whacked by the Estate Tax If your email inbox looks anything like ours over the past couple weeks, you've likely heard about the supposed estate tax issues that acclaimed actor James Gandolfini's family is going to have with the IRS and the state of New York in regards to a rather large estate tax bill.  For those that have missed the details, evidently Mr. Gandolfini's estate is worth more than $70 million and it would appear that his Estate Plan leaves a bit to be desired. Of course, at this point no news organization has all the facts as they've not been detailed as such, however, there is much speculation and conjecture swirling about relating to the story and tragedy of it all.  If things stand as they are now, his family stands to owe the IRS about $30 million in the next nine months...ouch.  But we'll have to see how things shake out. Today's episode is talking more in depth about why you should have an estate plan, why you might consider a trust, and a pretty lengthy discussion about ILIT's...one of our favorite topics. State Estate Tax Round-up For those interested in knowing what states in the United States have their very own estate tax for residence, here's the list and the details: Connecticut: $2 million exemption with 12% top marginal tax rate Delaware: $5.25 million exemption with 16% top marginal tax rate Hawaii: $5.25 million exemption with 16% top marginal tax rate Illinois: $ 4 million exemption with 16% top marginal tax rate Maine:: $2 million exemption with 12% top marginal tax rate Maryland: $1 million exemption with 16% top marginal tax rate Massachusetts: $1 million exemption with 16% top marginal tax rate Minnesota: $1 million exemption with 16% top marginal tax rate New Jersey: $675,000 exemption with 16% top marginal tax rate New York: $1 million exemption with 16% top marginal tax rate North Carolina: $5.25 million exemption with 16% top marginal tax rate Oregon: $1 million exemption with 16% top marginal tax rate Rhode Island: $910,725 exemption with 16% top marginal tax rate Vermont: $2.75 million exemption with 16% top marginal tax rate Washington: $2 million exemption with 19% top marginal tax rate Washington DC: $1 million exemption with 16% top marginal tax rate If you die while you are a resident in one of these states, your estate may be subject to both Federal and State Estate Taxes.

(Complete Show Notes Below) In the 45th episode of the Financial Procast: We Discuss Indexed Universal Life Insurance The episode starts off with an introduction to indexed universal life insurance (IUL), what it is, how it works and why it came to be in the first place!  After quite a few years of offering a ... Keep Reading

(Complete Show Notes Below) In the 45th episode of the Financial Procast: We Discuss Indexed Universal Life Insurance The episode starts off with an introduction to indexed universal life insurance (IUL), what it is, how it works and why it came to be in the first place!  After quite a few years of offering a current assumption uinversal life insurance product that was solely based on an interest rate, the life insurance industry decided to introduce a new variation of UL to the mix--enter IUL.  This product is widely sold through FMO's, IMO's and BGA's.  It's heavily marketed as a "wonder drug" sort of product by a great many marketeers and they are entire life insurance sales and marketing systems built around using this product. Books like Missed Fortune© and the Retirement Miracle© are entirely devoted to having you reach the conclusion that IUL is the answer to all of your retirement woes.  Is it really that good a product? Listen to our podcast to find out what we think!

(Complete Show Notes Below) In the 44th episode of the Financial Procast: Pamela Yellen Continues the Bank on Yourself© Cause Last week Pamela Yellen announced that she is indeed publishing a new book that's due out early next year. Now, in the past we've been a little harsh regarding Pam and her first book, Bank ... Keep Reading

(Complete Show Notes Below) In the 44th episode of the Financial Procast: Pamela Yellen Continues the Bank on Yourself© Cause Last week Pamela Yellen announced that she is indeed publishing a new book that's due out early next year. Now, in the past we've been a little harsh regarding Pam and her first book, Bank On Yourself© but in today's Financial Procast, you'll find a kinder, more gentle version of Brandon and Brantley. Honestly, we've got no major problems with Pam and we both think that she's done quite a bit to further the "cause" of using cash value life insurance as an asset building tool.  Our problem has always been with the somewhat fuzziness of the facts and some of the marketing tactics she uses. Facts and Figures Legitimize the Concept But she's promising,  "This book is incredibly well documented and will blow the lid off the “conventional financial wisdom” and expose it for what it really is – a way for Wall Street and the banks to continue to line their pockets at our expense." So, we'll see if that holds true. For now, you really should listen to this episode to find out what specifically we have disagree with and some great clarification on a few topics that Yellen, Nash, the BOY and the Infinite Banking crowd sort of gloss over.

(Complete Show Notes Below) In the 43rd episode of the Financial Procast: The Financial Procast talks Cars We thought we'd take a detour today from the world of life insurance, investments and retirement planning to talk about the wonderful world of cars!  Yep, you read that right…we're talking cars today. It's probably something we should've ... Keep Reading

(Complete Show Notes Below) In the 43rd episode of the Financial Procast: The Financial Procast talks Cars We thought we'd take a detour today from the world of life insurance, investments and retirement planning to talk about the wonderful world of cars!  Yep, you read that right...we're talking cars today. It's probably something we should've talked about a long time ago being that it is one of the largest purchases most people make but alas we are getting around to it.  In our typical style, we make light of the whole process but add some valuable info that might help you navigate the minefield that is a car dealership. Not all dealers or salesmen are out to get you but you should go in armed with a working knowledge of the process.  And most importantly don't get badgered ;) httpv://youtu.be/G401CC5Rep8

(Complete Show Notes Below) In the 42nd episode of the Financial Procast: Dave Ramsey Gets In a Twitter Fight Yes, you right that right!  It seems that about two weeks ago, some of the Financial Planning community Illumnati called into question some of Dave Ramsey's “rule of thumb” advice.  In response, Dave didn't take to ... Keep Reading

(Complete Show Notes Below) In the 41st episode of the Financial Procast: Are 529 College Savings Plans a Good Idea? Generally speaking we're not in love with the 529 savings plans.  They seem like a great idea in theory but in practice they're a bit less than appealing.  Most people who've bought into the idea, ... Keep Reading

(Complete Show Notes Below) In the 40th episode of the Financial Procast: Yes there are times that Whole Life Insurance is NOT the answer I know many of our regular listeners may be shocked to hear us make that statement.  But it's the truth. There are times that whole life insurance and all other types ... Keep Reading

(Complete Show Notes Below) In the 39th episode of the Financial Procast: We Poke the Long Term Care Insurance Beast Right in the Eye For a while, we've had people asking us our opinions on long term care insurance (LTCi), so we decided to dedicate an entire episode to the topic.  In the episode, you'll ... Keep Reading