This second issue of the Private Wealth Management Newsletter addresses issues related to retirement planning, concentrated stock management, and tax developments in Asia. You can forward the newsletter to colleagues and clients who can also sign up to receive quarterly issues.

Annuity Shock
Martin L. Leibowitz and Anthony Bova, CFA

Defined-contribution plans can enable individuals to accumulate tax-deferred savings that far exceed their expectations. On retirement, however, they may be shocked to discover how a seemingly ample savings amount translates into only a modest level of sustainable annual income on an after-tax, after-inflation basis.

Differentiating When Consulting to the Ultra Affluent
Scott D. Welch

The ultra affluent expect a great many things of a wealth manager. Success in wealth management requires a wealth manager to recognize that the model that works in the institutional world does not necessarily translate well to the world of the ultra affluent.

Planning Your Practice for Succession
Ed McCarthy

Many financial advisors are faced with practice transition decisions, but few have succession plans in place. Effective succession planning involves financing and business development strategies. The optimal solution depends on the size and composition of the firm’s owners, management team, and client base.

Beyond the Prepaid Variable Forward
Thomas J. Boczar, CFA

The prepaid variable forward (PVF) is commonly used by taxable investors to hedge, monetize, and defer the capital gains tax on the highly appreciated, publicly traded securities they own. The options-based collar combined with a margin loan achieves economically equivalent results to a PVF with less tax and audit risk.

Double Dipping on Social Security
Laurence J. Kotlikoff

Social Security recipients are permitted to repay all benefits received in the past on their earnings records and reapply for much higher benefits from scratch. Doing so can be economically equivalent to purchasing an inflation-adjusted annuity at a very favorable price.

Singapore’s 2008 Budget: Tax Implications for Private Banking
Philip Marcovici

Singapore is continuing its strategic approach to establishing itself as a wealth management center and tax-effective place to reside in Asia. It is sprinting ahead of Hong Kong in its strategic approach to bi-lateral treaties and its investment in education in the wealth management area.