Refocus and Conquer Financial Goals
Every year I dread the end of summer. As the days get shorter and the sunny days become less frequent, at least I know I have one thing to look forward to: Cougar Football Season! Except this year is a bit different – in many ways. We still have football this year but due to COVID, Pac-12 football and countless other aspects of our lives have been turned upside down.
The Pac-12 originally planned to cancel the 2020 season, and now has reversed course after determining the financial consequences of retreating would be too impactful, deciding instead to host a shortened season with extra precautions. With many of us working from home, staying inside, and limiting our social gatherings the impulse to write off or “cancel” 2020 on ourselves can be strong. However, hiding behind the events of 2020 have been some major financial changes that all require your attention. Just like the Pac-12 decision to get back to playing, it’s time to shake the feeling of this difficult year and re-focus on your goals and plans!
Here’s what you may have missed:
1) The SECURE Act – The legislation that passed at the beginning of the year changed how beneficiaries are forced to take money out of retirement accounts. Although one of the largest impacts is to beneficiaries, this is also a glimpse at how impactful a change in legislation can be if most of your assets are in a 401(k) or IRA. The SECURE Act showed some great reasons to consider Roth and other tax efficient strategies to change course. Now is the perfect time to review your tax strategy and adjust accordingly.
2) The CARES Act – If you are in your 70’s, the CARES Act relaxed the rules on required minimum distributions (RMD’s). So relaxed, in fact, that there are none required for the year 2020. If you are willing to get creative, this may give you an opportunity to take advantage of the opportunities tied to the SECURE Act while keeping your taxable income low for 2020.
3) Government Stimulus – The government and Fed have been printing money and buying assets to keep our economy afloat and help those in need. This won’t come without consequences and one has to ask; will taxes and inflation go up as a side effect? Be prepared for how this will impact you and create strategies today to get ahead of these challenges.
4) The Presidential Election – To round out the year, we have one of the most polarizing elections we have seen in a long time. There is so much uncertainty with the election ahead, it is critical to be sure your investment strategies are in place to handle whatever may be ahead. There may also be tax law changes and much more to come. Understanding any potential adverse effects to you and your family is key, allowing you to be nimble and adjust in anticipation of what might be ahead.
Wow, what an eventful year and we didn’t even touch on the market swings from COVID, the wildfires, and much more that have hit us this year. It’s no wonder people are looking forward to putting 2020 behind us, but a new year doesn’t mean our problems go away. When times get tough, our natural reaction may be to retreat and hope things work out, but life will go on and your financial goals are still important. So, if you are able to lift your head and take control, there are strategies you can implement now to be sure you are prepared and allow you to come out of this even stronger.