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Roth Conversion in 2021?

In 2020, a year when all income brackets benefited from lower tax rates, the stock market took a nosedive at the beginning of the pandemic. For investors sharp enough to see the opportunity, this was an ideal time to convert a traditional IRA into a Roth IRA. When you conduct a Roth conversion, the assets are taxed at ordinary income tax rates in the year of the conversion. So, the best time to do this is when your current income tax rate is low and when your IRA account balance loses money due to declining market performance. Once you convert the account to a Roth, those assets continue to grow… Read More

The Impact of COVID on Life Insurance

If someone you know died from COVID-19 and had an existing life insurance policy, there should be no problem receiving the death benefit. The terms of a life insurance contract cannot be changed after purchase, so anyone with a policy before the pandemic will continue to be covered as long as premiums are paid. However, the life insurance industry is in a quandary right now when it comes to new applicants applying for policies. Some insurers have placed an age limit on applicants to whom they will sell policies. Travelers who have recently visited countries with a significant outbreak and people currently infected with the virus are generally asked to… Read More

While Many Suffer Financially, Some Manage to Profit off Pandemic

The Federal Reserve recently reported that the 50 richest people in the United States increased their net worth by $339 billion during the first half of 2020. There are two primary contributors to this near-unprecedented level of growth. The first is that many either owned or were heavily invested in tech companies that thrived during the pandemic. Increased technology demands for remote work, online shopping, streaming entertainment, and socially-distanced socializing created a lucrative COVID-19 economy in some sectors. Another reason is that the U.S. Treasury and Federal Reserve proactively infused the economy with stimulus capital. That helped mitigate long-term market disruption that might have otherwise occurred. The short explanation of… Read More

What To Know About Filing For Bankruptcy

About one million Americans file for personal bankruptcy each year, with one in 10 households having filed at some point. Given the loss of jobs, reduced income, and the coronavirus recession in 2020, those numbers could increase this year if the economic recovery is not both swift and omnipresent. There are two main types of personal bankruptcy: Chapter 7 and Chapter 13. Chapter 7, which is the more common option, will liquidate the filer’s assets in order to discharge all or a portion of the outstanding debt. People generally choose this route because they are in way over their heads and do not earn enough income to pay their debts… Read More

Last Minute Financial Moves for Year’s End

There are certain year-end financial transactions that must clear by Dec. 31 to be reported on the 2020 tax return. It’s important to take a good look at your financial portfolio in light of the plethora of unusual events that occurred this year. Now is a good time to see if you have fallen off track and reposition your portfolio for better opportunities in 2021. Investment Portfolio Despite the dramatic stock market drop that accompanied the outbreak of COVID-19 on our shores, markets have recovered remarkably well. This means the traditional strategy of harvesting gains and losses at year-end could be appropriate for many investors. When your capital losses are… Read More

A Realistic Picture: Will You Be Able to Afford In-Home Elder Care?

By the end of September, the nation had recorded over a quarter million cases of COVID-19 and nearly 60,000 deaths in nursing homes that were attributed to the disease. The recent pandemic offers yet another reason why more than 90 percent of seniors say they want to grow old in their homes rather than move into a senior housing facility. But just how feasible is that goal, from a financial perspective? Much depends on how independently you can live for the rest of your life. That is something we cannot plan. Even elderly people with an excellent gene pool and no known health conditions can experience a fall or other… Read More

Long-Term Financial Impact of COVID-19

As bad as the economy is right now due to the COVID outbreak in the United States, many economists are predicting that the long-term outlook is much bleaker. Alas, Congress and the Federal Reserve’s efforts at stimulus and interest rate management have done much to keep the economy and stock market afloat. However, small businesses – the backbone of America’s employment growth – are closing every day. As consumer spending reduces further, the impact will likely affect Wall Street. Consequently, share prices may soon begin correcting to reflect the future more so than the present. It should come as no surprise, then, that 88 percent of respondents admit they are… Read More

Tips for Retiring in the Next 10 Years

The stock market continues to perform with relative resilience, despite the current economic decline. But to be clear, without 100 percent participation in the economy – in terms of small business job creation, consumer spending, and company growth and expansion – the stock market is apt to reposition prices to reflect slower growth. With no containment or control of the pandemic on the horizon, there is plenty of uncertainty associated with future financial planning. Anyone looking to retire in the next 10 years or so may want to take a fresh look at their current retirement income plan. In fact, they might need a Plan A, B, and C in… Read More

Borrowing From Your Retirement Plan: New CARES Act Rules

It’s been nearly half a year since Americans first became widely aware of the coronavirus contagion within the United States. While for a brief month it looked as if we had the virus in hand, since then it has spread wildly out of control in many areas. People who did not suffer dramatic financial consequences in the early stages of the pandemic could see some hard days ahead. For this reason, it’s a good idea to become familiar with the new relaxed rules associated with withdrawals from tax-advantaged retirement plans. In late March, Congress passed the Coronavirus Aid, Relief and Economic Security Act (CARES Act). This bill offered provisions related… Read More

How To Use Qualified Charitable Distributions For Charitable Giving

Each year, millions of Americans make donations to charitable organizations and receive something in return – a tax break. However, the 2017 Tax Cuts and Jobs Act curbed this tax advantage because it reduced the number of people eligible to claim a charitable deduction by raising the standard deduction. For 2020, the standard deduction is $12,400 for individuals and $24,800 for married couples filing jointly. If your list of deductions is not greater than those amounts, there is no tax benefit to itemizing – which means you might not be able to claim your charitable donation. Without the ability to claim a deduction, some retirees just take their normal required… Read More