The COVID-19 pandemic has shaken up nearly every aspect of American life. To say it’s been a difficult time would be an understatement.
However, difficult times may open doors to new possibilities. Businesses are changing their ways of operating, and individuals are exploring new avenues for investment. It may be time for you to consider some opportunities, as well. (more…)
These are challenging economic times, and this week may be the toughest as we wait for COVID-19 to reach its peak in the United States. As the war against COVID-19 wages on, we continue to be inspired by the tremendous bravery shown by healthcare workers on the front lines. Other heroes will likely emerge from a lab somewhere with a vaccine in the near future. In the meantime, we have important roles to play by maintaining quarantines and social distancing. (more…)
“Every decade or so, dark clouds will fill the economic skies, and they will briefly rain gold. When downpours of that sort occur, reach for a bucket.” —Warren Buffett (more…)
From Our Partners at PAI: The CARES (Coronavirus Aid, Relief, and Economic Security) Act has been a topic of discussion for weeks as legislators discussed the best way to give Americans a much-needed boost as the economy has faltered due to the Coronavirus. Signed into law in late March, there are several provisions that will help students, workers, and retirement plan participants to maintain more financial stability during this challenging time.
CARES Act changes retirement plan provisions for loans and tax-advantaged withdrawals
Retirees and workers alike have likely been groaning when looking at stock values over the last several weeks. While it takes some time for market volatility to level out, these provisions included in the CARES Act may provide retirement plan participants with additional flexibility and more options for loans and penalty-free withdrawals during this stressful time.
PENALTY-FREE WITHDRAWALS FROM RETIREMENT PLANS
Workers who are experiencing financial difficulty due to the effects of COVID-19 on their careers, health, and overall financial wellness will be able to take a penalty-free distribution from a retirement account, like a 401(k) or IRA, between January 1, 2020, and December 31, 2020.
Under normal circumstances, there is a 10 percent penalty tax added to the taxes paid on distributions from a retirement plan before a participant reaches age 59 1/2. However, the CARES Act includes a provision that allows eligible participants to take up to a $100,000 distribution from a retirement account without the addition of the 10 percent tax that normally accompanies an early withdrawal. This tax-favored withdrawal may be repaid to an eligible retirement plan within three years of taking the distribution, with the option to repay beyond the normal annual contribution limits.
Eligible participants for a coronavirus-related distribution are those who have been diagnosed with the virus (or have a spouse or dependent diagnosed), experience adverse financial consequences as a result of being quarantined, unable to work, laid off, or those who had work hours reduced due to the virus.
TEMPORARILY INCREASED LIMIT ON RETIREMENT PLAN LOANS
Factor #1 in our Road to Recovery Playbook is finding confidence in the peak of COVID-19 cases in the United States. At Epic Capital, we are monitoring this factor daily, and we wanted to provide an update into what we are seeing. As shown in the Chart of the Day, while the number of new cases in the United States has continued to climb, the number of new cases seen outside of the US has begun to drop in recent days. In fact, Italy, the worst-hit country in terms of total deaths from the virus, reported on Tuesday that new cases hit a two-week low. (more…)
Few terms in personal finance are as important, or used as frequently, as “risk.” Nevertheless, few terms are as imprecisely defined. Generally, when financial advisors or the media talk about investment risk, their focus is on the historical price volatility of the asset or investment under discussion.
As Americans get their grills and beach chairs ready for the July 4th holiday, the stock market and the weather across much of the country have both been on heaters. Stocks and bonds continue to effectively navigate a complex policy landscape shaped by evolving trade dynamics, geopolitical tensions, and fiscal stimulus. The market’s resilience in … Continue reading “Market Update – America Gets Record High Stock Prices for Its Birthday”
Birthdays may seem less important as you grow older. They may not offer the impact of watershed moments such as getting a driver’s license at 16 and voting at 18. But beginning at age 50, there are several key birthdays that can affect your tax situation, health-care eligibility, and retirement benefits.
During times like these when geopolitical headlines can be unsettling for investors, we at LPL Research like to remind ourselves of one of our key investing principles. Markets have always faced challenges —ranging from geopolitical conflicts and economic downturns to natural disasters, political upheaval and health crises. These events often trigger short-term volatility and shake … Continue reading “Why Long Term Investing Beats Selling in Volatile Times”
Are you concerned about the inheritance taxes your heirs may have to pay? Then you may want to consider creating charitable lead trusts.
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