Did you know that Woodward Financial Advisors is celebrating our 25th anniversary this year? While we’ve evolved a lot over the years, one thing has remained the same: our passion for helping people achieve financial independence.

Check out how we have changed and grown over the years, as well as significant milestones, below.

If you’re just learning from us that we’ve got an election coming up in November, surprise! More likely, you’ve already been inundated with ads, editorials, opinion pieces, screeching Facebook posts and junk mail.

Accompanying every election is the often-asked question of what folks should do with their investment portfolios. In short, the answer is… probably nothing. As illustrated below, markets have historically trended upward regardless of the party occupying the White House.

The conclusion we draw from this data is that we should buckle up and stay in our seats, no matter how bumpy the election road might get. If you do, you will likely be rewarded over the long-term.

While this might seem unsatisfying (especially for action-oriented folks), the most successful long-term investors stick to their plans, especially in times of great uncertainty. The issue of our elections can be a topic fraught with strong emotions and beliefs, and there’s nothing wrong with that. At the same time – and to use an achingly familiar image – emotions and investment decisions are best quarantined separately.

For additional insight on this topic, please visit the more in-depth piece we wrote on our blog.

Written by Victor Colella, CFP®

The beginning of autumn is marked by some recognizable signs: school in full swing, fewer daylight hours, crisper weather, and Medicare’s open enrollment period. Alright, so three of those four are more well known, but for folks on Medicare the open enrollment window is an important occurrence.

Medicare’s annual open enrollment period – which runs from October 5^th through December 7^th this year – allows enrollees to re-evaluate their health and drug plan coverage and make changes or purchase new policies to better meet their needs. Changes made during open enrollment take effect 1/1/2021.

If you are new to Medicare or need a refresher, the Medicare program has five main parts. Each is intended to help cover specific health related goods and services.

Understanding the ABCs of Medicare allows us to explore some of the changes* allowed during the annual open enrollment period, which include:

Current enrollees should review any material sent by Medicare. Documents like the Medicare & You handbook, the “Evidence of Coverage” and the “Annual Notice of Change” outline the upcoming changes and can help you determine if your existing plan meets your needs in 2021.

When evaluating your coverage options, there are multiple decision points, the cumulative effect of which can impact your costs and coverages for next year. Here are a few tips:

The Medicare system can be complicated. To get the most from your Medicare in 2021, it is a good idea to start your annual review early so you don’t feel rushed. If you have questions about coverage options or want a second opinion on your choices, please let us know. There are some local experts that have previously helped our clients navigate these complex decisions, and they can assist you as well.

Written by Austin Brown, CFP®

The COVID-19 pandemic has forced many people to work from home, leading some folks to wonder if they might be able to take advantage of one of the more elusive elements of the income tax code: the home office deduction. After all, if your guest room closet has become your new office space, shouldn’t you be able to deduct some of the costs?

Unfortunately, for most people, the answer is going to be no. Historically, for W-2 employees, the home office deduction was only available if an employer required you to work from home. Logically, then, you might expect that a coronavirus-related shutdown of your workplace should allow you to take a deduction for costs associated to working out of your house.

But the same 2018 tax legislation that ushered in historically low rates also eliminated several “miscellaneous deductions”, including payments for tax preparation, investment management expenses, and…home office expenses. So even if you had to work from home this past spring and summer, your related expenses won’t be deductible on your 2020 tax return.

Self-employed individuals and independent contractors, on the other hand, can still deduct these expenses on Schedule C of their tax return, provided that the relevant room or space in their house is used exclusively for business purposes. In fact, if you can prove that you use a specific portion of a room in your house exclusively for business, you can still claim the deduction even if you use the rest of the room for something else. That justification can be complicated, but it’s possible.

Starting in 2013, the IRS introduced a simplified method for calculating the home office deduction, providing an alternative to keeping track of every related expense. With the simplified method, taxpayers electing to take the deduction simply multiply the square footage that’s been used exclusively for business purposes by a specified rate. Taxpayers can still elect to use the regular method – which involves documenting all business expenses and then allocating those based on the percentage of the house used for business – if they so choose, though it’s much more burdensome to go this route.

Regardless, because of the complexities involved and the historic misuse/abuse of this deduction, the IRS has traditionally marked it as a “red flag” for potential audits. Accordingly, if you are considering claiming the home office deduction, you’ll be best served by consulting with a CPA or tax professional.

Written by Ben Birken, CFP®

A month of no work – what was I going to do? How was my family going to react when my traditional daily schedule was over-hauled? I had some idea how I would pass the time and set for myself a few projects. I wanted a little bit of structure, but I also wanted some days to not have any plans at all and to figure things out as I went.

The main thing for me was to try to disconnect from my daily routine. It was great to be able to lie on the sofa and read for a couple of hours and not have to worry about doing something else. Because I knew that I had the next day, and the next, and the next after that…

I even learned a little about what my retirement might look like. I remember one exchange where my wife and kids were busy with work and school and I was walking around the house trying to be helpful. In a very nice way, my wife looked at me and said something to the effect of “Do you need something?” It was then that it hit me that my family wasn’t going to upend their lives just because I had some extended time off. My kids would say things like “hope you’re enjoying your sabbatical” and then disappear into their rooms only re-emerging for dinner.

About half my time off was during school vacation so we had our movie nights and I finally had that glass of wine with my wife over a (somewhat) quiet dinner. The remainder of my time off took place after the start of the school year with both of my children on a remote learning program. I was appointed the breakfast chef and Harris Teeter point person for family grocery runs. I had the opportunity to observe what my family’s days were like and how busy they seemed and the stress they were under. I wondered whether I acted the same way when I was in full-time worker mode.

I had some reading that I wanted to get to – Alexander Hamilton by Ron Chernow. My daughter had wanted me to read it as it was the source book for the blockbuster Hamilton Broadway show. I made it through about 100 pages (the book is 700 pages long), and life’s too short. It’s now on my to-do list.

But of course, there’s no shortage of books to read so I went in a slightly different direction and pivoted to The Puzzle of Polynesia by Christina Thompson. It was a fascinating read on the history of the Polynesian islands – a story about discovery, exploration, and the ability of a native people to sail hundreds, even thousands of miles without standard navigational equipment. The setting for the book is the South Pacific ocean, a triangular region of 10 million square miles – with the 3 points of the triangle being New Zealand, to the Southwest, Hawaii to the North, and Easter Island to the Southeast.

The highlight of my sabbatical was the few days I had to myself during a bike trip I took to Bedford, Virginia. Bedford sits at the base of the Blue Ridge Parkway in south central Virginia. I had plenty of time to ride around the Appalachian Mountains and enjoy the beautiful vistas – they really can make you feel pretty small in a cosmic sort of way. I had a lot of time to think while I was riding – I thought about the world, my family and how people are doing these days.

Overall, I had a great and relaxing time. I’m glad that I went, I’m glad to be back, and I’m looking forward to the next one.

Written by Joe Marques, CFP®

We are excited to announce that Woodward Financial Advisors’ “Your Money in 20” podcast has recently crossed the milestone of 500 downloads! For those of you who are already regular listeners, we are so grateful to have you. Thank you for appreciating the work that we put into these episodes. Please share your experience with as many friends as possible!

For those of you who haven’t yet listened, “Your Money in 20” is a podcast produced by our team here at Woodward Financial Advisors. Our goal is to provide useful and applicable advice about topics that are timely and important to your financial lives. Each episode is delivered in a “snackable” format that you can listen to in 20 minutes or less.

We’ve listed below our 10 available episodes as links, so if any topic strikes your fancy, simply click on it to go right to the episode.

Episode 1: What the CARES Act Might Mean for You

Episode 2: Down Markets Mini-Series Kickoff – Ripe for Rebalancing

Episode 3: Down Markets Mini-Series – Tax Loss Harvesting

Episode 4: Down Markets Mini-Series – Roth Conversion Opportunities

Episode 5: Down Markets Mini-Series – Reassessing Your Financial Plan

Episode 6: Life in the Tax Lane – Reviewing Tax Returns

Episode 7: (Not so) Secret Identity – How to Avoid Being Low-Hanging Fruit for Identity Theft and Fraud

Episode 8: The Four Critical Documents of an Estate Plan

Episode 9: Dive Right In or Dip a Toe? How to Enter the Market in Uncertain Times

Episode 10: 2020 Lightning Round – This Year’s Most Electric Questions

If you’re brand new to podcasts, this article is a great resource for how to listen and subscribe, so that you always know when new episodes are available.

Written by Victor Colella, CFP®