AFEAE Educational Courses?

[CRLLS]

I received a flyer for 3 courses put on by AFEA (American Financial Educational Alliance)

"UNDERSTANDING YOUR SOCIAL SECURITY BENEFIT OPTIONS"
"THE ABCD'S OF MEDICARE"
and
"TAXES IN RETIREMENT"

All are free classes and held on Northern Illinois University properties. They are estimated to be 2 hr long presentations. The 1st 2 offerings are not needed. I've done some planning over the last year or two and know more than the average presenter. I might just attend for a refresher, or to see how the presenters steer the presented materials. However on the 3rd offering, I could use a bit more knowledge.

Has anyone been to any of these? The flyer says "Courses and workshops do not promote or endorse any specific products or companies, and no selling is allowed." Still, I wonder.....From the AFEA website: AFEA is a national non-profit organization comprised of a very diverse and growing membership of licensed professionals. Our members work as attorneys, financial advisors, realtors, mortgage specialist, insurance and investment specialist, CPA's, Health & Wellness Specialist, and a variety of other professions.



Any 1st hand experiences with AFEA classes would be appreciated. Re they just another form of the free dinner deals? Thanks.

 

[CRLLS]

I thought that I would follow up on this post. We went to the "classes" and learned a few key points that i did not previously know about. Plus DW learned more as she generally left me to deal with the finances. She is now wanting to know more and be part of the decisions. So that was good.

The presenter did have a separate Financial Advisor business and was careful to stay "on-course" with the AFAE course material. As part of the course, he offered, on behalf of AFEA, a personalized review as it applied to the course material. SURPRISE! (not). We took him up on this free offer.

After that free review, he did his "pitch" for a comprehensive financial plan for a fixed price. He guaranteed that if we did not get value from this, there was a 100% money back guarantee. We did go with that. What was there to lose? I was/am trying to get my head around the full calculations of Roth conversions now that I am out of the ACA Subsidy and how that would affect IRMA and Taxes. I needed more in-depth analysis than I can provide. We have met with him several times so far. He is now adjusting that plan for the new tax laws, and his services will be complete.

He did a soft-sell on other services he could provide if we were to become his client. That is not for us, and we made that clear. We are DIY'ers, and he knew it. He was not going to sell us on any AUM type plan, which is the fee schedule he uses for all of his current clients. However, in one of our meetings he said that he was considering adding a 2nd business model. He is thinking of offering us some fixed annual rate knowing that he will not have direct management of our accounts. He would be reviewing our status on a quarterly basis and making suggestions. This may be reasonable to us, if he and we agree on what that price would be. He still has a few things to finish up before the original "Financial Plan" is complete. Then neither he, nor we, we have any further obligations.

To finish this out, the "AFEA classes" were a bit like the free dinner offerings commonly used. They did provide some general info and worked as a tool for the FA to gather new clients.

 

[ERD50]

Thanks for the update. What is it costing and did you get a full picture of optimizing ROTH conversions?

Looks like I'll be doing zero LTCG harvesting over ROTH conversions for a few years, but I'm not convinced that's optimal.

-ERD50

 

[CRLLS]

We'll have to see what the results are. The cost for the full retirement plan looking 20 years out was $1,800. When considering the number of hours that we have spent meeting, it is reasonable. I prepaid it in 2017 so it should be tax deductible (within last year's tax rules). The new tax laws put a twist in his efforts making the evaluation virtually useless. Early last Dec, when we started this, he agreed to redo the plan if the tax bill passed. Well, it did so he has to go back and re-sharpen his pencil.

Our situation is that most of our savings, >90%, are in tax deferred accounts. For us, under last years tax laws, making a Roth conversion using IRA/401K funds to pay the taxes, is not a financial WIN even when RMD's come into play. It may be worth converting if we want to take control of the taxes during RMD time. but there is a cost for that. Without doing the Roth, our investments are 27% higher after 20 years. Even considering if we die at that 20 years, the money after taxes advantage to our heirs will be slightly better without converting.

He tried to put me straight on my tentative plans for monthly withdrawals, but backed down when I suggested having a monthly income to help secure a mortgage in a year or two. He agreed having that income stream would be easier. He helped me rethink to a more reasonable level of withdrawals.

The output from "The Plan" is a year by year spreadsheet looking at pretax savings, Roth conversions in excess of our annual needs and tax implications in a fair amount of detail. Plus a complete 70-80 page report including some advice on reducing our current Beta. Whether we follow that advice or not, we'll have to see. It is still a good idea to have someone else's eyes on our plan. And I think that a one-time fee was worth that.

As I said, the new tax laws may change the results. so...... stay tuned for another update when I get those results.

 

[joeea]

We'll have to see what the results are. The cost for the full retirement plan looking 20 years out was $1,800.

Not unreasonable. When we got a financial plan done a few years back, it was only $800.

I prepaid it in 2017 so it should be tax deductible (within last year's tax rules).

Be careful here. There is some debate about the deductibility of financial planner fees. You might want to run it past your tax adviser. Our (fairly conservative) financial adviser suggested that aggressive tax advisers might deduct it, but she wouldn't feel comfortable telling us to go ahead and deduct it on our own.

Whether we follow that advice or not, we'll have to see. It is still a good idea to have someone else's eyes on our plan. And I think that a one-time fee was worth that.

As I said, the new tax laws may change the results. so...... stay tuned for another update when I get those results.

I agree that in many cases, it's worth a fee to have this kind of report. It will be interesting to see how the recommendations change under the new tax laws.

 

[joeea]

I received a flyer for 3 courses put on by AFEA (American Financial Educational Alliance)

Any 1st hand experiences with AFEA classes would be appreciated. Re they just another form of the free dinner deals? Thanks.

If the "Articles" on their website are any indication, the AFEA is rather lacking.

The most recent article "Why Social Security is Running Out of Money" is dated April 19, 2016!

And it makes the claim "The Board of Trustees estimates that in 2033 all the money in the Social Security "bank account" will be depleted. That's three years earlier than estimated just last year. This means that workers in their forties fifties [sic] today may not have access to the Social Security benefits that they've paid into when they retire. " without bothering to mention that approximately 75% of benefits will still be paid even if no changes are made.

Not one of the better discussions regarding SS I have read.

Hopefully, the classes were better?

 

[CRLLS]

Not unreasonable. When we got a financial plan done a few years back, it was only $800.



Be careful here. There is some debate about the deductibility of financial planner fees. You might want to run it past your tax adviser. Our (fairly conservative) financial adviser suggested that aggressive tax advisers might deduct it, but she wouldn't feel comfortable telling us to go ahead and deduct it on our own.



I agree that in many cases, it's worth a fee to have this kind of report. It will be interesting to see how the recommendations change under the new tax laws.

Deductibilty is "my" thought, not the FA's. According to Kitces:

When it comes to the costs of financial planning advice, there is no specific section of the tax code that authorizes tax deductions for such expenditures, although when it comes to “expenses for the production of income” IRC Section 212 does provide that:
In the case of an individual, there shall be allowed as a deduction all the ordinary and necessary expenses paid or incurred during the taxable year—
(1) for the production or collection of income;
(2) for the management, conservation, or maintenance of property held for the production of income; or
(3) in connection with the determination, collection, or refund of any tax.
These provisions of the tax code allow for the tax deductibility of such expenses as tax preparation, income and estate tax planning advice (though notably, the drafting of estate planning documents is not deductible), ongoing investment management fees, and payments for investment advice. The deductions are generally claimed as a miscellaneous itemized deduction subject to the 2%-of-AGI floor (which, unfortunately, also means they are adjusted out for AMT purposes).

Whether I can or cannot seems to be straight forward. As always, when tax filing time comes, I will take the path that the law allows. Maybe I'll simply "understand" the law to my benefit. The worse that can happen is I'm audited and if they find I took the deduction where I shouldn't have, I'll pay the difference with interest. I think that the above reference will show that I wasn't trying to cheat and have to pay a penalty. If I'm good, I'll find a way to bury the planning fees in my Sole Proprietor Business Deductions to avoid the 2% rule. Maybe?

 

[CRLLS]

If the "Articles" on their website are any indication, the AFEA is rather lacking.

The most recent article "Why Social Security is Running Out of Money" is dated April 19, 2016!

And it makes the claim "The Board of Trustees estimates that in 2033 all the money in the Social Security "bank account" will be depleted. That's three years earlier than estimated just last year. This means that workers in their forties fifties [sic] today may not have access to the Social Security benefits that they've paid into when they retire. " without bothering to mention that approximately 75% of benefits will still be paid even if no changes are made.

Not one of the better discussions regarding SS I have read.

Hopefully, the classes were better?

You are right. I learn a lot more oh this site than the basic classes that AFEA presents. They are let's say a 500 ft view with some detail but nothing specific. Like I said earlier, they present basic info that can be found in many other places. To me, it is another way to drum up business that "appears" to be less self serving than an postcard invite to an investment dinner. That said, I went in eyes open and ready to listen. I actually did learn one or two things in the classes. If I go to any presentation and find one thing I didn't know, I consider it time well spent.