Trying to make your day a little brighter with comics.

Trying to make your day a little brighter with comics.

Well fellow advisors, I came across another amazing Tweeter thread that is important to save and not let it get buried. This time it is from Jeff Levine, CPA/PFS, CFP® regarding the SECURE ACT.

Jeff did an amazing job distilling many of the important parts for financial advisors. Thanks, Jeff! And now your tweet is permanently stored here for advisors to come back to and find it. Below you will find a few of his extensive thread - best to click the link and read the entire thread which contains so much information.

Advisors, if you come across other tweets or information that you feel should be preserved somewhere, message us.


OK, kids are finally asleep, so it's time to nerd out on the SECURE Act for a little bit (i.e. the next few hours). Buckle up...

Let's start w/ the big news... the 'Death' of the 'Stretch'. In fairness, it isn't dying a complete death...

— Jeff Levine, CPA/PFS, CFP® (@CPAPlanner) December 17, 2019


It's just that MUCH fewer people will qualify to be able to stretch distributions. Instead, most new (more on this in a bit) designated beneficiaries will have to empty inherited retirement accounts by the end of the 10th year following the year of death.

— Jeff Levine, CPA/PFS, CFP® (@CPAPlanner) December 17, 2019


Ok, let's switch gears up and talk about the very first Section of SECURE, which deals w/ MEPs. Many advisors are not super-familiar w/ them, but if you're not, you should do yourself a favor and do it QUICK. They're about to get a lot more popular.

— Jeff Levine, CPA/PFS, CFP® (@CPAPlanner) December 17, 2019


Imagine building your own super-tricked-out, low-cost, bad-ass 401(k) that you can offer to any biz you work w/ (or that wants to work w/ you).

You can have 1 big MEP for everyone! Streamlines things for advisors, which SHOULD lead to cost efficiencies for end-clients.

— Jeff Levine, CPA/PFS, CFP® (@CPAPlanner) December 17, 2019


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Picture credit: Photo by Louis Velazquez on Unsplash

When a client is going to retire is something that as financial advisors, you are usually aware of. What is unknown is which market cycle are we going to be entering when that particular client retires. And as it stands, that is more important than the 4% withdrawal rule. We have all heard about the 4% withdrawal rate and the arguments for it and against it. I have utilized it for years as a back of the envelope calculation when out and about. It is great for that.


When are they retiring? Not as in age, but market cycle point. If markets are on a correction phase, 4% would likely be too high. On the flip side, if markets are on a bull run (as in the past several years), 4% may be too conservative.

The next several years are going to be critical to plan for your clients. I came across a site today that I wanted to share with you all. I ran some standard numbers to get a visual representation of what would have happened historically during various market cycles.

Basic Assumptions - This is NOT a Monte Carlo simulation

Each line indicates a different retirement start year - goes from 1871 to 1980. Red lines indicating unsuccessful runs. A powerful visualization of retirement start date vs market cycle stage.

Now I understand, this is not very scientific and many of you will point that out. You can tactically manage the allocation and can go more aggressive in recovery years and so on. I just thought it was an interesting exercise and share the link to the amazing website with you:

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I am not an economist or a CFA trying to predict a bear market. We have had several years of a great market run and we all know at some point that is going correct itself. Prepare your clients that are going to be retiring in the next few years to have a cushion for this eventuality. As you are well aware, recovering from a drop of 24% (20% correction plus the 4% withdrawal) will be a challenge. That is where your value is over Robo-advisors.

Help your clients be prepared and capture your value.

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