Enjoy the current installment of “Weekend Reading For Financial Planners” – this week’s edition kicks off with the news that Congress has passed highly anticipated tax legislation, making ‘permanent’ (i.e., without a scheduled sunset) the lower individual tax rates enacted as part of the 2017 Tax Cuts and Jobs Act (TCJA), increasing the estate and gift tax exemption (which was scheduled to revert to approximately $7.14 million next year) to $15 million in 2026, and raising the limit on the deductibility of State And Local Taxes (SALT) to $40,000 (though this measure is scheduled to revert to the current $10,000 in 2030 and begins to phase out for consumers with more than $500,000 of income), among many other measures. Which will ultimately provide greater tax planning certainty to advisors and their clients for 2025 and beyond (and avoid the year-end rush they faced with the late-December passage of TCJA in 2017).
Also in industry news this week:
- A recent survey of wealth management firm leaders found that while respondents were confident in their abilities, many are facing challenges finding the right people for their teams and creating time to support them
- RIAs are being targeted by a phishing attack impersonating an SEC official, highlighting the value of vigilance and staff training in the face of varied cybersecurity risks
From there, we have several articles on retirement planning:
- How population-wide life expectancy statistics can provide misleading estimates when it comes to choosing a specific client’s life expectancy for financial planning purposes
- The cognitive biases that can lead clients to underestimate their life expectancy and affect their financial decision-making
- How financial advisors can add value for client couples by assessing both longevity and mortality risk when creating retirement income plans
We also have a number of articles on practice management:
- Why taking a proactive approach can help an aspiring successor show a firm founder how they can be an effective partner in helping the firm grow into the future
- A look into the range of financing options available for advisors looking to buy an equity stake in their firm without making a large, lump-sum payment
- How some founders are turning to “synthetic equity” programs to create incentives to attract and retain talent without giving up control over the firm
We wrap up with three final articles, all about (financial) independence:
- While many clients might say they have a goal of financial independence, this concept can mean very different things to different individuals (and can change over time)
- Why pursuing an extreme version of financial independence could lead to a less enjoyable and meaningful lifestyle, and how alternative approaches can provide a sense of freedom without having to make some of these sacrifices
- How to cultivate a sense of independence that goes beyond financial means and extends to the ability to live life on one’s own terms
Enjoy the ‘light’ reading!
