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 The coronavirus pandemic has launched the country, and the world, into uncharted territory. In much of the world, society is essentially shut down. Schools and large events are closed. People are staying in their homes. Businesses have effectively closed across the country.
The economy has felt the impact of the pandemic. Stocks have declined significantly, and unemployment has surged. On March 3, the Federal Reserve took action by cutting the fed funds rate to 0%. The Fed expects to maintain this rate until “it is confident that the economy has weathered recent events.”1 Given the unpredictability of the current pandemic, it’s hard to say how long rates might be at zero or how the economy may change in the future. However, changes to the fed’s benchmark rate often have ripple effects throughout the economy. Below are some things you may want to consider as we navigate a zero-rate environment for the near future: Debt Many common types of debt are tied to the prime rate. For instance, if you have a credit card with a variable interest rate, it could fall soon. If so, this may be a good time to get that balance paid off. You also may see lower rates on things like car loans and mortgages. This could be a good time to rate shop, especially if you have good credit. Even if you don’t want to transfer a credit card balance or refinance a home, the prospect of doing so could be enough to convince your lender to reduce your rate. Student loan rates could also be impacted. Rates for new federal student loans are adjusted every year. The rate for 2019-20 is already set, but the rate for next year could drop significantly if rates stay low for some time. Private student loan rates could be fixed or variable. It depends on the terms of your loan agreement. Savings Savers have unfortunately been used to low-interest rates for some time. Interest rates on savings accounts had started to climb, but after the Fed’s cut, the average FDIC rate is now down to 0.09%. While CDs may offer higher rates, they also come with less liquidity. It’s always advisable to have liquid savings available to cover emergencies and unexpected costs. However, it may be difficult to find interest-bearing accounts for those savings at this time. We can help you explore all your options and develop a liquidity strategy that’s right for your needs and goals. Investments There’s a misconception that a Federal Reserve rate cut always leads to gains in the stock market. One need looks no further than the most recent cut to see that it’s not true. When the Fed cut rates on March 3, the Dow Jones Industrial Average fell nearly 800 points.2 These are unprecedented times and it’s impossible to predict when the pandemic will end or how it will fully impact investors. While interest rates are a factor, there are many others to consider. Your retirement income strategy should be based on your unique needs and goals. Now could be the right time to review your strategy and make adjustments. A change in allocation could be appropriate. You also may want to take advantage of financial vehicles that limit your exposure to risk. A financial professional can help you find the right strategy for your needs. Ready to review your retirement income strategy? Let’s talk about it. Contact us today at Retirement Wealth Solutions of Nebraska. We can set up a virtual consultation, so you don’t have to leave the comfort and safety of your home. Let’s connect today and start the conversation. 1https://www.usatoday.com/story/money/2020/03/03/coronavirus-dow-jones-stocks-react-after-fed-cuts-interest-rates/4938447002/ 2https://www.usatoday.com/story/money/2020/03/03/coronavirus-dow-jones-stocks-react-after-fed-cuts-interest-rates/4938447002/ This information has been provided by a Licensed Financial and Insurance Professional and does not necessarily represent the views of the presenting professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, there is no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice and is not sponsored or endorsed by the Social Security Administration or any government agency. Investment advisory services offered through ChangePath LLC, a Registered Investment Adviser. Insurance services are offered through Retirement & Wealth Solutions of Nebraska. Retirement & Wealth Solutions of Nebraska and ChangePath, LLC are unaffiliated. 19959 - 2020/3/31
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 On March 27, President Trump signed the Coronavirus Aid, Relief, and Economic Security Act, which provides economic support to Americans who have been impacted by the coronavirus pandemic. You’re probably familiar with the highlights of the bill:
Those components are important and will certainly help many people get through this unprecedented period. However, there are some other provisions that could be important for you, especially if you’re approaching retirement or are already retired. Extended Tax Filing and IRA Deadline The IRS pushed back the tax filing deadline to July 15 from the traditional April 15.2 That gives you more time to prepare your return, collect documents, and possibly implement a strategy to minimize your tax bill. That also gives you more time to contribute to your IRA. You can make an IRA contribution up to July 15 and count it as a deduction on your 2019 return, assuming of course that you meet income requirements.3 401(k) and IRA Distribution Options It’s possible that you may need additional funds to get you through this period, especially if you or your spouse have been furloughed or have lost income. The CARES Act allows you to tap into your qualified retirement accounts through special distributions. You can take a withdrawal from your 401(k) and IRA without paying the 10% early distribution penalty, even if you are under age 59 ½. The distributions are taxable, but the taxes are spread over a three-year period. However, you can also repay the distribution over that three-year period and avoid paying taxes on the distribution.3 While a 401(k) or IRA distribution may be helpful, it could also have long-term consequences. When you take a distribution from your account, those funds are no longer invested. That means those funds can’t compound and grow. It’s possible that you may not fully participate in a market recovery if you decide to take a distribution, which could hurt your long-term growth. Waiver of RMDs Are you required to take an RMD in 2020? Not anymore. The CARES Act waives all RMDs in 2020, so there is no penalty for not taking a minimum distribution from a 401(k) or IRA. 4 This could be very helpful for your account balance. Your RMD would have been based on your December 31, 2019. Depending on how you are allocated, your account value may have been significantly higher on that date than it is today. That means that had the RMD not been waived, you would have potentially been required to take a substantial withdrawal from an account that had fallen in value.4 This may be a confusing and unprecedented time, but you have options available. We are here to help you explore those options and implement a strategy for your retirement needs and goals. Contact us today at Retirement Wealth Solutions of Nebraska. Let’s connect and start the conversation. 1https://www.thebalance.com/2020-stimulus-coronavirus-relief-law-cares-act-4801184 2https://www.irs.gov/coronavirus 3https://www.marketwatch.com/story/this-is-how-the-2-trillion-coronavirus-stimulus-affects-retirees-and-those-who-one-day-hope-to-retire-2020-03-31 4https://www.aarp.org/money/investing/info-2020/cares-act-retiree-tax-benefit.html This information has been provided by a Licensed Financial and Insurance Professional and does not necessarily represent the views of the presenting professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, there is no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice and is not sponsored or endorsed by the Social Security Administration or any government agency. Investment advisory services offered through ChangePath LLC, a Registered Investment Adviser. Insurance services are offered through Retirement & Wealth Solutions of Nebraska. Retirement & Wealth Solutions of Nebraska and ChangePath, LLC are unaffiliated. . 19977 - 2020/4/7  Do you have your crystal ball ready? It’s the start of a new decade, which means it’s time for everyone to make predictions about what’s in store over the next 11 months. Clearly, it’s impossible to predict the future. However, that doesn’t stop analysts and so-called experts from making their best guess.
As you can imagine, the economic predictions for 2020 are all over the map. Below is a sampling:
That’s just a small selection of “expert” predictions. As you can see, they’re all over the map. What do you do with such conflicting information? How do you prepare for the future if you don’t know what the future will be? The simple answer is you don’t. You can’t base your strategy or your decisions off short-term predictions because many of those predictions will prove to be incorrect. Of course, that doesn’t mean you shouldn’t plan either. It’s always wise to reassess your strategy and make changes as needed. Below are some tips on how to do that in 2020: Focus on the long-term. It’s natural to feel anxious because of negative predictions or volatile financial news. However, it’s always important to remember that downturns are temporary. There are two types of market downturns: a correction and a bear market. Corrections are downturns with losses of 10% or more. Bear markets are downturns with losses of 20% or more. The average correction has a loss of 13% and lasts only 4 months. On average the market recovers from a correction after 4 months. Bear markets generally last longer and have steeper declines. They have an average loss of 30% and last for 13.2 months. However, the market usually does recover, and does so on average in about 22 months.5 We can’t predict when a bear market will begin or end. That also means we can’t predict when the recovery from a bear market will start. If you take impulsive action because there’s a prediction that the market may trend down, you could miss the bear market, but also the recovery. Or the prediction could be wrong, and you could miss out on continued growth. Instead, focus on the long-term and avoid emotional decisions based on short-term predictions. Reduce your exposure to risk. If you’re like many people nearing retirement, you’re not as comfortable with risk as you once were. Many people become more risk-averse as they approach retirement. After all, you don’t have as much time as you once did to recover from a market loss. While no one can predict when a downturn may occur, you can take steps to make your strategy aligned with your more conservative risk tolerance. For example, you could shift your strategy to more conservative assets that have less exposure to risk and volatility. You could also utilize retirement income vehicles that offer growth potential without the chance of downside loss. A financial professional can help you identify strategies that can reduce your risk exposure. Guarantee* your retirement income. Are you approaching retirement? If so, you could take steps today to protect your income from short-term volatility and market downturns. One way to do this is by creating guaranteed* income from your retirement savings. There is an insurance product available that you can use to convert a portion of your retirement savings into income that is guaranteed* for life, regardless of what happens in the market or how long you live. Ready to develop your 2020 investing strategy? Let’s talk about it. Contact us today at Retirement Wealth Solutions of Nebraska. We can help you analyze your needs and develop a plan. Let’s connect soon and start the conversation. 1https://www.thestreet.com/markets/2020-stock-market-predictions 2https://www.nasdaq.com/articles/5-bold-predictions-for-the-stock-market-in-2020-2019-12-09 3https://markets.businessinsider.com/news/stocks/goldman-sachs-us-economy-2020-predictions-growth-jobs-recession-risk-2019-11-1028724040#the-risk-of-a-recession-is-set-to-drop4 4https://www.cnbc.com/2019/09/18/fed-ups-its-gdp-forecast-for-2019-slightly-to-2point2percent.html 5https://www.cnbc.com/2018/12/24/whats-a-bear-market-and-how-long-do-they-usually-last-.html Investment advisory services offered through ChangePath LLC, a Registered Investment Adviser. Insurance services are offered through Retirement & Wealth Solutions of Nebraska. Retirement & Wealth Solutions of Nebraska and ChangePath, LLC are unaffiliated. *Guarantees, including optional benefits, are backed by the claims-paying ability of the issuer, and may contain limitations, including surrender charges, which may affect policy values. Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency. 19537 - 2019/12/10  The government passed a year-end spending bill in December, and it included one piece of legislation that could have a big impact on retirees. It’s called the SECURE Act. The bill’s name is an acronym for Setting Every Community Up for Retirement Enhancement.
The legislation is aimed at helping Americans save more for retirement. While many of the changes will certainly be helpful, they may also require you to revisit your retirement strategy. The SECURE Act affects many different areas, from your 401(k) plan to your IRA to even how you take withdrawals in the later stages of retirement. Below are some of the biggest changes in the SECURE Act: Elimination of” Stretch” IRA The biggest change in the SECURE Act may not impact you but rather your IRA beneficiaries. The SECURE Act eliminates the ability to “stretch” an IRA, which was a strategy commonly used by non-spousal beneficiaries to reduce their tax burden and continue to grow the account. Under a stretch IRA concept, your non-spousal beneficiary, like a grown child for example, could simply withdraw your RMDs on annual basis from the IRA after you pass away. Because they are taking the minimum amount from the IRA, they reduce their annual tax obligation. They also leave assets in the IRA to continue growing on a tax-deferred basis. The stretch IRA is no longer an option, however. Under the SECURE Act, all non-spousal beneficiaries must take the full IRA balance within 10 years. The only exceptions are minor children and handicapped individuals. If you plan on leaving your IRA to someone other than a spouse, you may want to review their options. RMD Age Most qualified accounts like IRAs and 401(k) plans have something called required minimum distributions, or RMDs. These are withdrawals that you are required to take each year once you hit a certain age. Traditionally, RMDs have started at age 70½. However, the SECURE Act pushes the RMD start age back to 72. That means you’ll have eighteen additional months of tax-deferred growth in your 401(k) or IRA before you have to start taking taxable withdrawals.1 Traditional IRA Contributions RMDs aren’t the only reason why 70½ has historically been an important age. That’s also the age at which point you could no longer make contributions to a traditional IRA. Until now. The SECURE Act eliminates the age limit on traditional IRA contributions. That means you can continue making contributions well past 70½. That could be especially helpful if you plan on working in retirement and want to continue to bolster your savings.1 401(k) Plans for Part-Time Employees and Small Businesses The SECURE Act has also made 401(k) plans more accessible for part-time employees and employees at small businesses. In the past, 401(k) plans were usually reserved for full-time employees. However, under the SECURE Act, companies are required to offer 401(k) eligibility to any employee who works 1,000 hours in one year or 500 hours in three consecutive years.1 It’s also been difficult for many small businesses to offer 401(k) plans. These plans often have high startup and administrative costs that can be burdensome for small businesses with a tight budget. The SECURE Act aims to resolve that problem. The new law offers up to $5,000 in tax credits to offset 401(k) plan startup costs for small businesses. It also allows small businesses to pool together to offer 401(k) plans to their employees. 401(k) Plan Income Strategies The SECURE Act also focuses on how 401(k) plans can generate income for participants. Plans must now deliver “lifetime income disclosure statements” each year. This document will show you exactly how much income your plan could generate for life if you used the balance to purchase an annuity. The law has also made it easier for 401(k) plan participants to access annuities with guaranteed lifetime income features. The SECURE Act eliminated some regulatory issues that had prevented annuities from being common strategy options in 401(k) plans. With those issues resolved, participants can now use their 401(k) funds to create guaranteed lifetime income through the use of an annuity. What Should I Do? These are some of the biggest changes to retirement plans in decades and it would be wise to re-evaluate your retirement plan. By meeting with a financial professional, we can help you evaluate your current plan and how you may want to adjust based on these recent changes. There are certain things you may want to look at differently, including some sophisticated tax planning opportunities, that only a professional can truly help you understand. Ready to review your retirement strategy to see how it is impacted by the SECURE Act? Let’s talk about it. Contact us at 402.817.4474 today so we can help you analyze your current plan and develop a winning strategy. Don’t wait, the sooner we can help you evaluate your needs, the sooner you can feel confident about the plan you have in place. Let’s connect soon and start the conversation! 1https://www.fidelity.com/learning-center/personal-finance/retirement/understanding-the-secure-act-and-retirement Investment advisory services offered through ChangePath LLC, a Registered Investment Adviser. Insurance services are offered through Retirement & Wealth Solutions of Nebraska. Retirement & Wealth Solutions of Nebraska and ChangePath, LLC are unaffiliated. Licensed Insurance Professional. We are an independent financial services firm helping individuals create retirement strategies using a variety of investment and insurance products to custom suit their needs and objectives. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. 19636 - 2020/1/13  Another year is in the books. It’s almost time to turn the calendar to 2020. For many investors, this is the time to look back on the past year and make adjustments for the upcoming year.
The performance of your portfolio in 2019 depends on your allocation and your specific investments. However, generally speaking, investors enjoyed positive returns in 2019. Through November 22, the top market indexes had the following returns: S&P 500: 24.60%1 DJIA: 19.88%2 NASDAQ: 29.41%3 Those positive returns haven’t come without a few bumps in the road though. The markets experienced a few sharp downturns in 2019, especially through the summer. Issues like the trade war between the United States and China have created uncertainty among some investors. 4 However, other developments, like interest rate cuts and strong corporate earnings, have helped extend the longest bull market in history.4 What’s in store for 2020? When it comes to investing, it’s impossible to predict the future, especially in the short-term. However, if you are concerned about market volatility, there are steps you can take to minimize your exposure to risk. Below are a few action items to consider as we head into the new year: Review your risk tolerance. Is your allocation aligned with your risk tolerance? If you’re like many investors, you may not actually know what your risk tolerance is. Risk tolerance is your specific ability to withstand volatility in your investments. Risk tolerance is unique for each person and is based on a wide range of factors, including your time horizon, your comfort level with risk, and your financial goals and needs. Risk tolerance also changes over time. If you’re approaching retirement, you may not have the same tolerance you had when you were younger. Often, people who have decades until retirement have significantly more tolerance for risk because they have more time to recover from a loss. If you’re a few years away from retirement, you may be much more sensitive to a market downturn. Now is a good time to review your risk tolerance and make sure your allocation is appropriate. A financial professional can use a variety of tools and methods to accurately gauge your tolerance for risk. He or she can then recommend specific allocation changes that may be more appropriate than your current investment approach. Use risk protection tools. Changing your allocation is one way to reduce your potential risk levels. It’s not the only option though. You could also incorporate into your strategy retirement vehicles like fixed indexed annuities that reduce or eliminate market risk. For example, there are a wide range of vehicles that allow for growth and interest accumulation based on market index returns, but without exposure to downside risk. You could use this option to eliminate risk on a portion of your allocation, thus reducing your overall risk and volatility exposure. Ready to develop your 2020 investing strategy? Let’s talk about it. Contact us today at Retirement Wealth Solutions of Nebraska. We can help you analyze your needs and develop a plan. Let’s connect soon and start the conversation. 1https://www.marketwatch.com/investing/index/spx 2https://www.marketwatch.com/investing/index/djia 3https://www.marketwatch.com/investing/index/comp 4https://www.cnbc.com/2019/12/02/in-2019-almost-every-investment-worked.html This information has been provided by a Licensed Financial and Insurance Professional and does not necessarily represent the views of the presenting professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, there is no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice and is not sponsored or endorsed by the Social Security Administration or any government agency. Investment advisory services offered through ChangePath LLC, a Registered Investment Adviser. Insurance services are offered through Retirement & Wealth Solutions of Nebraska. Retirement & Wealth Solutions of Nebraska and ChangePath, LLC are unaffiliated. 19523 - 2019/12/3  What are you thankful for this holiday season? Family and friends? A few days off work? Perhaps your health? Good fortune in your career? You may have many blessings for which you’re thankful.
Many of our blessings and fortunate circumstances are determined by choices we made earlier in life. Your good health may be a result of your healthy lifestyle. Your financial stability is likely a result of your career choices and your savings habits. What decisions can you make today that you will be thankful for in the future? Below are three actions your retired self may appreciate. If you’re approaching retirement and haven’t taken these steps, now may be the time to do so. Adjust your allocation and minimize risk. Are you feeling less comfortable with market volatility as you approach retirement? That’s normal. Most people become more risk-averse as they get older. When you’re young, you have a long time horizon. You have plenty of time to recover from a loss in the market, so you can afford to take some risk. However, as you get closer to retirement, your time horizon shortens. You don’t have as much time to recover from a loss, so a market downturn may cause more anxiety and stress than it did in the past. This may be a good time to review your overall allocation and possibly adjust to a more conservative strategy. Look for ways to pursue growth without exposure to high levels of risk. In addition to adjusting your allocation, you may want to explore retirement vehicles that offer growth potential without market risk. Your risk tolerance changes over time, so your allocation should change as well. Maximizing tax-deferred savings. If you’re like most Americans, you probably use some kind of tax-deferred vehicle to save for retirement. Accounts like IRAs and 401(k) plans are tax-deferred. You contribute money and then allocate your funds according to your goals. In a tax-deferred account, you don’t pay taxes on your growth as long as the funds stay inside the account. Depending on which account you’re using, you may pay taxes on distributions in the future. However, the deferral of taxes inside the account may help your assets compound at a faster rate than they would in a comparable taxable account. In 2019, you can contribute up to $19,000 to a 401(k), plus another $6,000 if you are age 50 or old. You can also contribute up to $6,000 to an IRA, with an additional $1,000 if you are 50 or older.1 Look for ways to trim your budget so you can put more money in your retirement accounts. Your future self will thank you. Work with a professional. Have you resisted using a financial professional for retirement income advice? Now may be the time to change your thinking, especially if you’re nearing retirement. A financial professional can help you adjust your allocations, plan your retirement income, develop a savings strategy, and even implement a personalized plan so you stay on track to hit your retirement goals. If you haven’t consulted with a financial professional about your retirement, now may be the right time to do so. Ready to nail down your retirement strategy and make decisions you’ll be thankful for in the future? Let’s talk about it. Contact us today at Retirement Wealth Solutions of Nebraska. We can help you analyze your needs and implement a plan. Let’s connect soon and start the conversation. 1https://www.irs.gov/newsroom/401k-contribution-limit-increases-to-19000-for-2019-ira-limit-increases-to-6000 This information has been provided by a Licensed Financial and Insurance Professional and does not necessarily represent the views of the presenting professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, there is no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice and is not sponsored or endorsed by the Social Security Administration or any government agency. Investment advisory services offered through ChangePath LLC, a Registered Investment Adviser. Insurance services are offered through Retirement & Wealth Solutions of Nebraska. Retirement & Wealth Solutions of Nebraska and ChangePath, LLC are unaffiliated. 19446 - 2019/10/30 |
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