I’ve written before that your prospects and clients do not need to know and understand the type of detailed information that’s discussed in these columns.
But you do!
To be the best insurance and financial professional possible, you need access to accurate and dependable information.
Particularly during this negative election season, you will hear various opinions. But you must find a way to inspire your prospects and clients to take action, no matter their views. First, you should not use your information to try to prove them wrong — because your prospects and clients are never wrong. Second, do not tell them anything — because people have emotional attachments to their opinions, especially when it comes to money and politics.
Instead, use information to ask powerful and important questions of your clients and prospects. The right series of questions can help people determine a reasoned course of action.
The more you know, the more your client saves
IRS.gov is one of your most important resources for solid, reliable information. Since our products use and provide tax deferred and tax free benefits, a basic understanding of the tax code is required to articulate that value
Everyone in this profession should be required to read the 1040 Instructions each year. Go to IRS.gov and get the instructions. They will help you do a better job for your clients by illuminating:
- How much Social Security will be taxable;
- The standard deduction for individuals and couples filing over age 65;
- The personal exemption for each person filing on the return;
- Tax allocation; and
- Progressive tax brackets for singles and joint filers.
For couples filing a joint return over age 65, the standard deduction is $15,500. Each receives a $4,050 personal exemption, for a total of $23,600. If they are only taking a required minimum distribution of $10,000, ask if they have someone they love passionately at the Internal Revenue Service to whom they want to leave a lot of money.
If you know the rules, you know that they could withdraw another $13,600 of fully taxable income from IRAs, 401(k)s, or deferred annuity gains, and pay no taxes. Over 20 years, they could eliminate taxes on $272,000 of fully taxable income! Ask why they aren’t doing that.