Chornyak & Associates

July 2019

The U.S. House of Representatives has passed a bill that could impact your retirement planning, which has a high probability of passing the Senate and being signed into law by The President. Our lead story will help you understand this.

Student loans can place a burden on families until paid off. We share a number of repayment options in our second article.

This month's "What's Happening Now" section shares interesting stories on the new Ford-backed Rivian electric vehicle, Tim Cook's learned difference between preparation and readiness, and 13 athletes who make more endorsing products than playing their sport.

We'd like to hear from you. Please feel free to contact us by phone at 614-888-2121, toll-free 877-389-2121 or e-mail with any questions or comments.
Sincerely, Joe
Common Mistakes Made with Retirement Money

New Retirement Bill Is Coming

In a bi-partisan effort, the House of Representatives recently pass the SECURE Act - Setting Every Community Up For Retirement Enhancement. The bill, that will now go to the Senate, makes significant changes that will impact most Americans who are preparing for retirement, or are all ready to retire. There are three important changes that will impact most of us in one way or another. Here are the proposed changes so you can plan accordingly:
  1. Required Minimum Distributions start at age 72
  2. Stretch IRAs will be shortened
  3. You don't have to stop saving for retirement at 70 1/2
I wanted to know what it means for the average American, so I spoke to Guy Baker, PhD, MBA, MSFS, Founder & Managing Director of Wealth Teams Alliance in Irvine, California, who is an expert on all things related to retirement planning and investing and he told me, "Unless the income from your IRA is an integral part of your retirement income, most IRA holders want to postpone taking income until the last minute. This just got easier under the SECURE bill. Instead of taking income at 70 1/2, IRA holders can now push their start date to age 72. Not only that, they can continue to make tax deductible contribution until 72 as well. This allows more time to build capital for retirement."

Not everything is peachy, the big gripes comes with what happens after the person passes away. For starters, the bill will no longer allow IRA holders to pass their IRAs to heirs over the heirs' lifetime, spouses and minor children are excluded. Additionally, the bill stipulates that upon death, the IRA must be liquidated within ten years. This change is expected to raise $16 Billion dollars over the next decade, according to the Joint Committee on Taxation. The bill also gives the IRS the ability to take up to one third of your IRA and retirement plans which is a concern for some people. Read More


Graduating from college is certainly cause for celebration! But for many graduates, earning a higher education degree has left them with sizable student loan debt. Fortunately, there are a variety of repayment choices available–from consolidation to refinancing–to help lessen this burden.

So, which path should you take when navigating the maze of repayment options? It will depend, in part, on which type of student loans you have: federal or private.

Repayment Plans
Federal student loans. If you've taken out federal student loans, there are quite a few repayment plans available.
  • Standard repayment plan. Based on your loan balance, with standard repayment you are required to pay a fixed amount each month for up to 10 years.
  • Graduated repayment plan. With this structure, you make lower payments in earlier years and then increase payment amounts in later years, for up to 10 years. This plan can be helpful for those who anticipate earning a higher income in the future.
  • Extended repayment plan. This plan extends the amount of years in which you repay the loan, up to 25 years. Here, it's important to note that the amount of interest you pay over the life of the loan will increase with a longer repayment period.
  • Income-driven repayment plan. Depending on when your loan was obtained, different income-driven repayment programs are available. To participate in one of these plans, you will need to apply and meet the qualification requirements. They include a payment around 10 percent to 20 percent of your discretionary income, with the possibility of loan forgiveness after 20 to 25 years. If a student loan is forgiven through this program, the amount forgiven will be considered taxable income.
More details about these plans, as well as a repayment estimator calculator, are available on the U.S. Department of Education's website at Your loan servicer is also available to assist with implementing whichever repayment option you select. Read More

What's Happening Now

Ford-backed Rivian Electric Vehicle Tim Cook Learned Difference between Preparation and Readiness 13 Athletes who Make More Endorsing Products than playing Sports

Market Update

Strong June leads to positive quarter for markets

June was a great month for stocks, as all major equity markets saw positive returns. The S&P 500 gained 7.05 percent for the month, the Dow Jones Industrial Average (DJIA) returned 7.31 percent, and the Nasdaq Composite rose by 7.51 percent. Further, June's gains offset May's declines, leading to positive quarterly performance of 4.30 percent for the S&P 500, 3.21 percent for the DJIA, and 3.87 percent for the Nasdaq.

This positive performance came despite weakening fundamentals. According to FactSet (as of June 28, 2019), the estimated earnings decline for the S&P 500 in the second quarter is 2.6 percent. This estimate is down from the 0.5 percent decline projected at the start of the quarter. Keep in mind that earnings declined in the first quarter for the first time since 2016. As such, this projected earnings decline for the second quarter in a row is concerning. Analysts project further declines in the third quarter before a return to growth in the fourth quarter. Ultimately, fundamentals drive long-term performance, so this is an area that deserves attention going forward.

Although fundamental support worsened during the month, technical factors were another story. In May, all three major U.S. indices dropped below their respective 200-day moving averages. But they bounced back in June to close the month well above that trend line. This bounce was an important development, as long periods spent below the 200-day moving average could show that investors are becoming less confident in U.S. equities. In turn, this lack of confidence could be a headwind to future performance.

The international story in June was much the same. The MSCI EAFE Index returned 5.93 percent, and the MSCI Emerging Markets Index returned 6.32 percent. Once again, these gains offset losses in May, bringing the MSCI EAFE Index to a 3.68 percent gain for the quarter. The MSCI Emerging Markets Index, which fell further than the developed markets in May, ended the quarter with a 0.74 percent gain. Read More

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