The impact of the coronavirus pandemic is being felt in all areas of our society. Fortunately, we have some of the best minds in healthcare leading our medical and social response. Additionally, we’ve had unprecedented monetary and fiscal response and the markets are beginning to reflect some optimism.
At Quartz, we are working diligently to help our clients adjust investment and planning priorities as needed and identify potential opportunities moving forward. These are highly individualized plans, but we thought it would be interesting to compile the following list of 19 financial planning considerations for individuals and families.
- Ensure your portfolios are still within your desired allocation ranges and rebalance as needed. If you are in need of major changes, consider doing it in phases.
- Consider strategies to harvest losses, as these losses can be helpful down the road.
- Don’t become a day trader. Ensure your decisions are in line with your overall long-term plan and be disciplined.
- The IRS extended the 2019 tax return filing deadline from April 15, 2020 to July 15, 2020. That means you have 3 additional months to make your 2019 IRA contributions.
- Same goes for your 2019 HSA/MSA and Coverdell Education Savings account contributions.
- Remember, if you make a 2019 contribution to any of these plans, be sure your custodians code them properly as 2019 contributions, not 2020, so that they are reported correctly.
- What if you are in distribution mode? Required Minimum Distributions (RMDs) for certain retirement plans are waived during 2020. Certain 2019 RMDs can even be ‘undone.’
- Not 59 ½ but need to take a distribution? Early withdrawal penalties for 2020 distributions are waived.
- You can also spread the tax on retirement plan distributions over 3 years.
- Have you ever considered a ROTH conversion? If so, it might make sense to take advantage of the market declines and rerun your numbers now. Please keep in mind, you should consider the tax ramifications, age and income restrictions in regards to executing a
Roth conversion. The converted amount is generally subject to income taxation
- The maximum amount available from retirement plan loans doubles from $50,000 to $100,000.
- Even high-income earners and those in typically resilient industries are feeling the impact. Communicate with your advisor about changing cash needs due to reduced income. Volatile markets are no time for surprise cash requests.
- Are you or a loved one on Medicare? Medicare Part D recipients can request up to 90-day supplies of medicine instead of the usual 30-day supplies. That could mean fewer trips to the pharmacy.
- Did you have travel canceled? Keep record of any flight credits you may have so you can enjoy them when things get back to normal and before they expire.
- Similarly, many Private Clubs and other entertainment subscription services have offered credits that may expire in the next few months. Keep record of any notices and/or updates from your memberships.
- Use this extra time to organize your financial records. Take advantage of secure, mobile financial organizers. And consider consolidating your accounts.
- If you own a Small Business, reach out to your banker to discuss options for payroll and other economic relief packages offered through the new CARES Act.
- Interest rates are at historic lows meaning now could be a good time to consider refinancing older, high-rate loans. But recognize some lenders have actually increased rates to stem demand.
- If you have excess cash beyond your emergency funds (that 6-9 months of all living expenses), now could be a great time to put it to work for the long-term.
Of course, this only a brief summary of ‘some’ of the planning considerations we’ve been reviewing, and many updates and adjustments will likely be made over the coming weeks. These considerations are for general information only and not intended to provide specific advice or recommendations. We encourage you to reach out to your advisors to discuss if and how you can benefit from any of these considerations.
To your wealth (and health),
--Shane and David.