The Trump Tax Break?

The tax preparers at H&R Block had to take a new class before their busy season started this year: empathy training. For real. They have added this training. H & R Block preparers listened to a mock exchange between an employee and a customer whose refund would not just shrink but disappear. The fictitious client had received a $1,500 refund last year, but this year would owe $575.

The playacting was a foreshadowing of what they knew was coming. The tax overhaul that took effect last year promised relief, but now that returns are being filed, some people are baffled. They’re getting smaller refunds — or sometimes having to write a check — even though nothing in their situation seems to have changed.

The average refund among early filers was down 8.4 percent, according to the Internal Revenue Service. The smaller checks, in some cases, stem from the loss of certain deductions. For others, it’s because less money is being withheld from their paychecks. The I.R.S., in trying to more closely match the amount held out of paychecks with the amount that taxpayers will owe, changed its withholding tables.

The result is that taxpayers may be paying less over all but still getting a bill after filing their return. That has caught many people off guard.

The overhaul has been President Trump’s signature accomplishment. It lowered tax rates for businesses and individuals, and it provided a break to self-employed people and those with so-called pass-through businesses, where income passes through the business to the owner’s personal tax returns.

But it also eliminated or cut back some popular deductions, most notably capping the deduction for state and local taxes at $10,000 — a provision that drew significant criticism from residents of high-tax states. Although most people will see their tax burden decline, the Government Accountability Office expected about four million people to pay more.

 

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The Road to Retirement

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It is MYGA Time!

Multi-year guaranteed annuities (MYGAs) are having a moment. According to Wink’s Sales and Market Report of third quarter 2018 nonvariable deferred annuity sales, sales of MYGA contracts showed the most rapid growth: up 63.3% compared to the same period a year earlier.

Following recent market volatility and the Federal Reserve’s short-term interest rate hikes, consumers are searching for ways to protect their savings but still grow their investments. Often compared to bank certificates of deposit (CDs), MYGAs are attractive because they offer protection but higher interest rates than CDs — plus, tax advantages. Because they are the least-complicated type of annuity, even the most annuity-wary clients can be open to them.

How MYGAs Work

MYGAs are fixed-rate insurance products that ensure that the buyer will get a stream of payments at some point in the future, typically 3 to 10 years, and usually with interest and past premium. They typically are purchased with a single premium amount and will apply surrender charges if your clients take out money before the end of the contract period. However, most MYGAs allow policyholders to take their required minimum distributions (RMDs) without penalty. Because not all MYGAs are this way, you should check before advising clients.

Which Clients Might Want MYGAs

MYGAs offer solutions for clients who want to save for retirement and clients who need a steady income while in retirement. A major advantage that a MYGA has over the CD is tax deferral. While a CD in an IRA or 401(k) can also be tax-deferred, CDs that aren’t in an IRA or other retirement account will be taxed annually on the interest earned. But with a MYGA, a client’s money will grow and only be taxed when the client withdraws it.

The similarities of MYGAs to CDs — including their simplicity — make them a great option for your more conservative clients with CDs about to mature, Treasury bonds or money market accounts. For example, a client set to renew a CD today might only get .6% to 3.15% today, but you could connect them to a MYGA with 3.0% to 4.92%, plus the benefit of tax deferral.

How ISN Can Help

With MYGA sales on the rise and projected to climb further, ISN Network has established a MYGA team to provide you with the MYGA products, knowledge and support that will position you to help your clients and grow your business. Our marketing team will help you and focus on three-, five- and seven-year fixed MYGAs.

You can call the MYGA team with any questions at 1.800.338.1892 at extension 1 for Marketing.  Our Marketing team are especially up-to-date with all the different MYGAs and can help you find the best solution for each client’s specific needs.

Agents may call in thinking they want the highest rate on a multi-year guaranteed annuity, but because we have multiple carriers and deep MYGA knowledge, we may be able to find one that’s even a better fit than what you might expect. It takes an experienced, knowledgeable partner to know all the details that can lead to a great rate, and our team can help point out those potential tradeoffs — factors such as carrier ratings, compensation, liquidation measures, free partial withdrawals, maturity options and so on.

 

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New Bill For Retirement Planning

Rep. Ron Kind, D-Wis., plans to reintroduce legislation Wednesday intended to increase retirement savings for American workers through the employer-based system, according to industry sources. Rep. Mike Kelly, R-Pa., is expected to co-sponsor the legislation.

The bill, a reintroduction of last year’s Retirement Enhancement and Savings Act, or RESA, H.R. 5282, introduced by Kind and Kelly, first advanced in 2016.

In the Senate, last year’s companion bill, S. 2526, was referred to the Senate Finance Committee. However, provisions of the legislation were included in the Family Savings Act of 2018, also introduced by Kelly, which passed the House last year.

The House Ways and Means Committee is poised to conduct a hearing Wednesday morning on improving retirement security for workers. Both Kind and Kelly are members of the committee.

MassMutual CEO Roger Crandall and Diane Oakley, executive director of the National Institute on Retirement Security, are slated to testify.

In general, the bill would modify requirements for tax-favored retirement savings accounts, and employer-provided retirement plans to encourage savings. It would also increase the tax credit for small employer pension plan startup costs and give small employers who start 401(k)  automatic enrollment plans a tax credit.

The retirement planning industry is expected to come out in full support of the legislation. Last year, the Insured Retirement Institute, AARP, the American Council of Life Insurers, the Bipartisan Policy Center and the Church Alliance all supported the bill.

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The Cost of Care Calculator

Mutual of Omaha has been providing you with long-term care costs for years, but now it’s even easier to access.

The LTC Cost of Care Calculator lists state-specific and projected inflation figures for the following:

  • Home Health Care Cost
  • Assisted Living Facility Cost
  • Nursing Home (private and semi-private room)

Equipped with this valuable information, you and your clients are informed on what types of benefits are necessary to meet each customer’s unique needs. Give it a try and see how easy it is to use the cost of care calculator.

Give it a try here!

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Use a Video to Educate Your Clients

Video: Life Insurance Living Benefits
Many Americans don’t realize that life insurance is more than death benefit protection. Educate your clients about living benefits to help them accomplish goals throughout their lives. Make the most of your life business. Use this client approved video to start the conversation.
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Be a Closer (Like Mariano Rivera)

CONGRATULATIONS TO MARIANO RIVERA…THE FIRST PLAYER IN BASEBALL HISTORY TO BE ELECTED TO THE HALL OF FAME WITH A UNANIMOUS VOTE

As leaders in most any line of work will tell you, becoming a leader is mainly about what is in your head, not in your physical prowess or material advantages. In the book by Wayne Coffey – “The Closer: My Story” we learn from the greatest closer of all time, Mariano Rivera, that the key to his success was not just his physical skills, but his mental approach.

Rivera was from Panama and at first the Yankees saw him as a starting pitcher but arm troubles lead them to place him in the bullpen. It was there that Mariano transformed himself and his mentality and developed into the great player that he was. But was it just his physical skills?

In his own words Mariano said “Yes…I can do one thing better than just about anyone else. Put the ball exactly where I want. (But) I am convinced that being fully committed to the moment, without any worries about the past or projections into the future, is the best attribute that I had.”.

Translated into our world it can be a revelation. With each appointment, with each client, we need to be “in the moment” “without worries” of the outcome. If we do what is right for our clients, if we listen to their needs and concerns “without any worries of our past or future” – that is the best attribute we can bring to our clients.

So go out there and be a closer…like Mariano Rivera.

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