Amid the fears of the coronavirus pandemic, it can be hard to find things to be positive about. With new anxiety-inducing developments spilling into the news every day, all the stockpiling of food and household goods, social distancing, remote working, coronavirus related deaths, and stock market panic, life as we know it has been turned upside down, and has been quite frankly, overwhelming at times. 

Even within the chaos, there are many positive factors that provide the basis for an improving outlook. 

  • The majority of us have our health and are together with family/friends

  • By taking precautions and being mindful of our actions, we do have some level of control over this situation and its outcomes

  • Our healthcare workers are amazing!!!!!

  • Work on medical treatments and vaccines is advancing at an incredible pace

  • Schools and parents are adapting, and kids are still learning

  • There are SIGNS OF UNITY in Washington as our political leaders are acting at an unprecedented pace to address the crisis – please see the Recent Legislation overview below

  • People and markets have historically proven to be resilient time and time again

It is times like this these that we must draw on our powers of resiliency. We have been through very challenging events and periods of time in the past, and together, we will persevere through this challenging time as well. 

Recent Legislation

In addition to addressing the broader impacts of the pandemic, recent legislative actions present immediate benefits to individuals and small businesses. One of the significant changes resulting from today’s signing of the CARES Act, is that Required Minimum Distributions (RMDs) are now waived for 2020. We will be proactively reaching out to certain clients who may not need RMDs to support their living expenses and/or have other assets to draw on instead of IRAs. We encourage you to contact Kerry promptly if you think stopping or cancelling your RMDs for 2020 may be an option for you. Doing so may help buy some time for your portfolios to recover and can minimize your tax bill for 2020.  

A question we are anticipating is whether RMDs already taken in 2020 can be put back in the IRA(s). The relief package does not include any repayment provisions, so the IRS may have to issue guidance on this issue. Pending IRS guidance, we may still have one option for getting RMDs taken back into IRAs – the 60-day rule. Under certain circumstances, distributions can be deposited back into IRAs an avoid taxation or penalty if done within 60 days of receipt of the funds. If you are interested in discussing this approach, please contact us at your earliest convenience. We will continue to monitor information provided by the IRS on the topic of repaying 2020 RMDs. 

Please find some highlights of the recent legislation below:

  • Required Minimal Distributions (RMDs) are now waived for 2020

  • Income tax filing deadline is July 15

  • Cash payments will be made to individuals/families based on income level and number of children

  • Extra unemployment payments are available – increasing the benefits and broadening who is eligible

  • Private health insurance plans will cover COVID-19 treatments, vaccines and testing

Small Business
  • Emergency grants are available to cover immediate operating costs

  • Forgivable loans, are available, when used to maintain payroll, keep workers on the books or pay for rent/mortgage

For additional information on recent legislation, we’ve provided several links below that do a good job of summarizing these actions.

The Markets

I hear market commentators around the clock debating whether we’ve seen the worst of the stock market drops and many pundits are calling the bottom. This week has provided a bit of relief for investors and clients as we experienced three straight days of strong gains in the US stock market. The rally seemed largely in response to the extraordinary stimulus plans in the works from the Federal Reserve, the Treasury Department and Congress. It is refreshing to see, when it really matters, our elected officials working together and getting the right things done.

While we may feel a bit better given this week’s upswing and with government stimulus on the way, it’s quite likely we will continue to experience maximum volatility in the financial markets until we see the peak in coronavirus cases. That means we may revisit the downturn for stocks and possibly even make new lows before we begin a more sustained recovery. I continue to believe we will experience a strong economic, financial and emotional recovery once all our efforts to win against the coronavirus begin to show progress. Until then, it’s probably best that we think beyond the next three days, three weeks or three months. Give this some time, let us execute your investment and planning strategies and do your best to see this through. 

In closing, we will get through this and the economy will be stronger in the long run. The situation will get better, for the world, our clients, our team—and you. 

A few questions to think about in between all the late breaking news flashes, tweets, emails, social media posts, etc.:

  • What makes us so resilient?

  • What has our resilience helped us to overcome in the past?

  • Why should expect anything different this time around?

Please do not hesitate to contact me or any member of the team any time and as often as needed.

Be well,
Rick W. Campbell
Financial Independence
931 Jefferson Blvd
Suite 2005
Warwick, RI 02886

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