F. Scott Fitzgerald during his supposed quarantine amidst the Spanish Flu virus:
“The officials have alerted us to ensure we have a month’s worth of necessities. Zeida and I have stocked up on red wine, whiskey, rum, vermouth, absinthe, white wine, sherry, gin and lord, if we need it, brandy. Please pray for us.”
The quarantine blues have been settling in for many. Hopefully you were able to listen into my broadcast with a wellness expert and hear some fresh ideas on “beating the blues.” If not, it’s available below:
The 889-page Coronavirus Aid, Relief and Economic Security Act (CARES) Act passed last week. Today, I’m planning to summarize the points that are most applicable to PrairieFire clients.. The last two big pieces of legislation that impact the financial world have been the SECURE Act and now the CARES act. The federal government’s public relations department is working overtime to make us feel secure and show us that they care – time will tell…..
There are multiple stipulations to these rules, per the 889-pages, but here is a digestible summary:
Recovery Rebates – Show me the money:
$2,400 for married couples, $1,200 for other/single tax filers and $600 per kid under 17. These are refundable income tax credits and will be sent to everyone eligible from your 2019 tax income, 2018 if you haven’t filed 2019. These phase out based on income for those years:
Required Minimum Distributions – RMD’s take a day at the beach
RMD’s are waived for 2020 – if you’ve already taken yours in 2020 you have the option to return it. With the market’s down, we need to visit with all of you that are impacted by this change to determine what will be your best income and tax strategy for 2020.
IRA and 401(k) Distributions – Penalties waived
If you know someone who has a severe financial need, this might be an option for them. IRA’s and employer plans may be used for distribution without the 10% federal penalty for those under 59 ½, can be repaid and the income may be spread over 3 years.
Other Provisions –
These changes provide a number of opportunities to update your financial plans and incorporate them into cash flow planning, retirement planning and your philanthropic plans. For a time such as this, it is even more important to follow this mantra – “The Plan is the Path.”
A few reminders as we close out March
1. You’ve already made smart, responsible decisions about managing your money and those decisions are protecting you now.
2. Our defensive, high quality positioning in 2019 is helping to protect your investments and will continue to do so if this volatility persists.
3. This is not going to last forever and we will get through this, together! 4. Please pay attention to the guidelines from our local and state leaders. They are hearing things that we are not so it’s in our interest to be safe and cautious.