As a CPA and CFP, I work almost exclusively with retiring or retired clients. These clients must weigh many decisions, including whether they want or need upside potential in an investment, whether they desire a death benefit guarantee and whether they require a steady source of cash flow from a particular investment.

The article, “ Investment Tax Planning for Retirement ” ( JofA , Aug.03, page 63), suggests clients should avoid tax-deferred annuities. In fact, it states, “CPAs should advise couples to invest in taxable accounts before buying nonqualified tax-deferred annuities” and that MUNIs and other tax-exempt investments would be more advisable.

I agree that, prior to retirement, 401(k)s, Roth IRAs and nonqualified and/or taxable accounts can be the most effective savings tools. However, the article does not seem to distinguish between investments appropriate before retirement and investments appropriate during retirement.

Upon retirement, many clients who receive Social Security benefits can lower their income tax significantly by structuring their investments within tax-deferred accounts. In addition to the obvious tax savings due to tax deferral, they also can lower the portion of Social Security benefits subject to income tax (up to 85% can be taxed). This is not tax deferral—this is a permanent savings. Exempt bonds suggested in the article are an addback in determining the portion of Social Security subject to tax and for this reason can be a poor answer.

The article also does not seem to consider the appropriateness of fixed annuities, which can typically offer a higher payout than CDs on a tax-deferred basis. These accounts do not typically charge the fees—the issuing company determines an appropriate interest rate.

Finally, the article has missed the point. Retired clients generally want assurances. Many tax-deferred annuities offer death and income benefits while offering upside potential in the stock market. Some of these programs are simply too expensive. However, good programs are available that offer clients upside potential with certain protection mechanisms.

I provide clients with many choices. I do not focus on annuities, but they can be a very useful tool in achieving a client’s objectives.

Ronald L. Myers, CPA, CFP
Plantation, Florida

The article, “ How to Tame Health Care Costs ” ( JofA , Aug.03, page 83), suggests the option of eliminating health care benefits completely. We all know that is an obvious choice and probably not worth much discussion.

However, there are some additional health care cost-management strategies the article did not discuss that I have found useful.

Health care underwriters are marketing new cost-sharing plans that basically include an in-network deductible as a cost-share element. The result is both a lower benefit and a lower premium.

More commonly, it is appropriate and cost-effective for employers to put tiered plans in place. For example, a company could implement a high and a low plan and let employees choose. Naturally, the higher-benefit tier would require employees to share a greater proportion of the cost through payroll deductions. For many companies a low plan might include HMO (medical) and DMO (dental) options, while a high plan would include PPO or open-access plans. This makes insurance more affordable for lower-paid employees who today may not be insured at all, while leaving more robust plans available for executives and others who desire to pay more for them.

There are some useful negotiating strategies your broker or underwriter may not want you to be aware of:

First, you have to get quotes from more than one carrier. Health underwriters will lower premium quotes if they know they can get a new group or stand to lose a group to a competitor. I recently saw one carrier drop rates by 5% and the competitor knock off 3%.

Second, health underwriters typically notify brokers when there is a second broker competing for the business, especially in larger entities (more than 50 employees). This may have your brokers questioning your loyalty, but it also puts them on their toes. Each broker has a different creative approach for fitting a plan to your company. You will gain some great ideas by shopping around even if you ultimately remain with your old broker. Also, brokers have different commission rates for particular carriers. They can reduce their commissions, pass the savings along to you and still make a profit. This can translate into another percentage point or two in cost reductions.

My emphasis lately is to raise some of the incidental out-of-pocket copayments and deductibles, increase cost sharing with staff, provide tiered options and remain focused on the value of insurance as catastrophic coverage, while negotiating quote reductions to deliver well-balanced value to the employer, employee and shareholders.

Ernest J. Scheidemann, CPA
Wayne, New Jersey

I was intrigued by the article, “ Turn Excel Into a Financial Sleuth ” ( JofA , Aug.03, page 58). I attempted to run the Excel file after downloading it, but was unable to do so. My technical support person said the file required the XP version of Excel to run. This was not mentioned in the article.

When dealing with technology, the JofA should list the hardware and/or software requirements necessary to utilize the tools provided.

I did enjoy the article, and I am looking forward to trying the program after I have the XP version installed.

Sarah D. Espelin, CPA
Seward, Alaska

Authors’ reply: If the Excel version is more than two to three years old, there can be a problem with the code (which takes less than a minute to fix). We are sure this can be easily fixed. We have had about 10 to 12 e-mails from readers with similar troubles—and all of them involved very old versions of large data sets. All of the errors were fixed with very minor changes.

Anna M. Rose and Jacob M. Rose

While doing some housecleaning recently, I reread “ Those Who Can… Teach ” ( JofA , Jul.00, page 49).

I take exception to the statement, “A decision to pursue a career in academia should be synonymous with a decision to pursue a doctorate.” You can teach full-time with a master’s degree and a CPA certificate at many community colleges throughout our great country.

If you have the opportunity and desire to earn a PhD, teach at the university level and do research, then you should go for it. However, if you want to teach and don’t have the time or desire to earn a PhD, a master’s may be a good fit.

Initially, I thought the only path to full-time academia was by first earning a PhD. Fortunately, I discovered otherwise when my part-time teaching job at Albuquerque TVI Community College developed into a full-time faculty position.

OK, so I am not addressed as Dr. K or Professor K. I’m addressed as Mr. K, or Milton, if the student is comfortable with that.

I also realize that a community-college compensation package is not as attractive as one for someone who spends several years earning a PhD and teaches at the university level. No, we are not talking high five figures, but you have plenty of flexibility to do other things with your time.

Instead of teaching upper-level accounting courses at the university level, you’ll be teaching Accounting 101, Intermediate Accounting, Managerial Accounting, Business Math, QuickBooks Pro, Peachtree Accounting or Income Tax. If your heart is in the right place, you will find a community college a wonderful, fulfilling and rewarding place.

So to all you CPAs with master’s degrees interested in teaching, I say, “Get going and get teaching!”

Milton Kuninsky, MBA, CPA, CFP
Instructor
Albuquerque TVI Community College
Albuquerque, New Mexico

It was disheartening to read about the accountant trainee’s work experience with a CPA firm that apparently provided very little incentive for its staff to remain in the profession (“ Retention of CPA Employees, ” JofA , Aug.03, page 14).

Having worked in public accounting for more than 40 years, I also have experienced sole proprietor CPAs and partners who have scant knowledge on how to nurture an employee to grow or inspire them to become a member of the public accounting profession. In reflecting on those years, I have learned that clients can dictate how small to medium-sized firms operate.

However, the point here for most accountants, and we all overlook it, is there is more to the profession today in which to advance and reap professional rewards than ever before. Forensic accounting, for example, is an entirely new field in my view and one I would pursue if I were 20 years younger. Personally, in the last 12 years, I’ve become a teacher and mentor to accounting students by obtaining a teaching credential.

I would like to emphasize that there are tremendous opportunities for newly licensed and midcareer CPAs who wish to gain more personal fulfillment for their collective and individual efforts in our profession. Just look around, be aware of the constant changes in the profession and then take the chance.

Milt Cohen
Chatsworth, California