This year has been a rollercoaster ride. COVID has dominated the headlines and impacted every aspect of our lives. It has shut down businesses, schools, and workplaces. It’s changed the way we interact and socialize. And of course, it has deeply impacted the economy and the financial markets. It can be hard in 2020 to find the good news, but there actually are a few economic developments for which we can be grateful. There’s also quite a bit of uncertainty ahead of us. As we approach the end of 2020, now may be a good time to reflect on what has transpired over the past 11 months, and what steps you may need to take to prepare for what comes next. Below are three positive developments that you may want to consider as you prepare for 2021: The Markets Rebound COVID ended the longest bull market and longest economic expansion in history. The previous bull market started in 2009 and lasted for nearly a decade before crashing in just a few short weeks over February and January of this year.1 Between February 19 and March 23, the S&P 500 fell 33.93%. Since that point, though, the markets have surged. From March 23 through October 29, the S&P 500 is up 47.94% and is nearly back to its pre-COVID levels.2 As mentioned, though, there is still uncertainty ahead. The COVID pandemic is far from over. There’s also uncertainty about how the results of the election will impact the markets, the economy, and the country’s COVID response. While the market's rebound is a fortunate turn of events, there’s no guarantee that it will continue. Now is a good time to evaluate your strategy and lock-in any gains before another potential downturn occurs. A financial professional can help you explore options. GDP Surge In the second quarter, GDP fell by 31.4%, the largest quarterly drop in history. In the third quarter, it rebounded by 33.1%, the largest quarterly gain in history. That number easily beat the previous record of 16.7% in the third quarter of 1950.3 Much of the rebound was driven by the service industry and the reopening of much of the economy. Of course, the continuing rise in COVID cases may threaten the economic rebound. Twenty-nine states hit record levels for daily new cases in October. Forty states had an increase of 10% just in the last week of October.4 CARES Act Financial Flexibility The COVID pandemic and its economic fallout have created financial challenges for millions of Americans. While the government is still debating a second round of stimulus, the first round, known as the CARES Act, continues to provide financial flexibility for those facing difficulties.
As part of the CARES Act, you can withdraw up to $100,000 from your 401(k) or IRA without facing early distribution penalties. The taxes on the distribution can even be spread out over a three-year period.5 Granted, withdrawing money from your 401(k) or IRA isn’t the best strategy for your retirement. However, it is an added measure of flexibility that didn’t exist prior to this year and it could be a blessing if you’re struggling due to the COVID pandemic. The end of 2020 is approaching. It’s been a rollercoaster ride, but there have been some positive developments, especially in the second half of the year. Let’s talk about how to protect what you have and limit your exposure to future risk and uncertainty. Contact us today at Binversie and Associates and let’s start the conversation. 1https://www.cnn.com/2020/03/11/investing/bear-market-stocks-recession/index.html 2https://www.google.com/finance/quote/.INX:INDEXSP 3https://www.cnbc.com/2020/10/29/us-gdp-report-third-quarter-2020.html 4https://www.cnn.com/2020/10/28/health/us-coronavirus-wednesday/index.html 5https://www.irs.gov/newsroom/coronavirus-related-relief-for-retirement-plans-and-iras-questions-and-answers Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency. 20420 - 2020/9/18 Diversification and asset allocation strategies do not assure profit or protect against loss. Past performance is no guarantee of future results. Investing involves risk. Depending on the types of investments, there may be varying degrees of risk. Investors should be prepared to bear loss, including loss of principal. Thinking about retiring? For many workers, retirement is the ultimate financial goal. It’s when you get to leave the working world and live life on your terms. However, the timing is important. Retire too early, and you risk running out of money. Retire too late, and you may lose out on valuable years that you could spend enjoying yourself.
There’s no magic formula for determining the right time to retire. Finances should be an important consideration. So, too, should your health and happiness. You also may need to consider family obligations or perhaps other dreams you may want to pursue after you leave the working world. Not sure if you’re ready? Below are a few questions to ask yourself as you make your decision. If you don’t know the answers to these questions, you may need to do some more planning. A financial professional can help you develop your strategy and solidify your retirement plans. What will you do with your free time? You’ve probably been looking forward to retirement for years, but have you given thought to how you’ll spend your free time? Many retirees initially enjoy their freedom but soon grow frustrated or bored. Some even suffer from depression or anxiety because they feel like they no longer have purpose. Boredom can have financial consequences. You may choose to fill your free time with costly activities like shopping, travel and dining out. The risk is that you spend too much in the early years of retirement. If you don’t know how you’ll spend your time in retirement, now may be the time to think about your options. It’s often helpful to write about your ideal day in retirement. How would you spend your time? What activities are most important to you? Think of ways you can enjoy retirement without excessive spending. When should you file for Social Security? Social Security is likely to play an important role in your financial picture. It’s one of the few retirement income sources that’s guaranteed* for life, so it can provide much-needed financial stability. Your benefit amount is largely dependent on when you file. You can file as early as age 62. If you file before your full retirement age (FRA), however, your benefit could be reduced as much as 35 percent.1 On the other hand, if you file after your FRA, you could increase your benefit. Social Security offers an 8 percent annual benefit increase for each year past your FRA that you wait to take benefits. If you can afford to delay your benefits, this could be a way to increase your retirement income.2 There’s no universal right answer on when to file for Social Security. Your decision should be based on your unique needs and goals. A financial professional can help you develop your strategy. What’s your plan B? You may have a strategy for how to fund your retirement. As you likely know, however, plans are disrupted all the time. The market could take a downturn, limiting your ability to generate income. You may face serious illness or even a need for long-term care, and the related costs could drain your retirement assets. What’s your backup plan to deal with these potential risks and more? You may want to talk to a financial professional about how you could better manage risk. For example, you could use an annuity to guarantee* your income or minimize volatility. You could consider long-term care insurance to reduce your out-of-pocket costs. Ready to plan your retirement strategy? Let’s talk about it. Contact us today at Binversie and Associates. We can help you analyze your needs and implement a plan. Let’s connect soon and start the conversation. 1https://www.ssa.gov/planners/retire/agereduction.html 2https://www.ssa.gov/planners/retire/1943-delay.html Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency. Securities offered through Registered Representatives of Cambridge Investment Research Inc., a broker-dealer member FINRA/SIPC. Advisory services through Cambridge Investment Research Advisors, Inc., a Registered Investment Adviser. Binversie & Associates and Cambridge are not affiliated. The information in this email is confidential and is intended solely for the addressee. If you are not the intended addressee and have received this email in error, please reply to the sender to inform them of this fact. We cannot accept trade orders through email. Important letters, email, or fax messages should be confirmed by calling 920-684-7801. The email service may not be monitored every day, or after normal business hours. *Guarantees, including optional benefits, are backed by the claims-paying ability of the issuer, and may contain limitations, including surrender charges, which may affect policy values. 17845 – 2018/7/30 |
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