Wow! What a year so far. With all of the relief packages passed due to COVID, there is a lot to stay on top of. Everything from skipping Required Minimum Distributions to Withdrawal Rules around Retirement accounts, and everything in between. As part of our practice, Year End Planning is front and center the last quarter of the year (every year!) Here are some things to consider as we close out the 2020 chapter:

One closely watched macroeconomic data point that is receiving more attention than usual is Initial Weekly Jobless Claims. Many investors follow the monthly job data such as ADP Private Payrolls, the Unemployment Rate, and change in Nonfarm Payrolls. However, in times of economic crisis we believe it is important to increase focus on the weekly data as well. While reported weekly, investors frequently focus on the 4-week moving average to create a smoother “curve” to track the trendline. As of last Thursday, 4/17, the 4 week moving average was 5,786,500. On March 13th, the number was 232,000.

On March 27, 2020, The Coronavirus Aid, Relief, and Economic Security (CARES) Act was passed by Congress and signed into law by President Trump. One of the provisions of this legislation is centered around distributions from Retirement Accounts (IRAs & Employer Sponsored Retirement Plans). If you or your spouse have been financially impacted by COVID-19, the IRS has suspended early withdrawal penalties from these vehicles up to $100,000. The distribution is still subject to income tax, but the IRS is allowing taxpayers to spread out the taxes equally over the next three years (2020-2022). The 10% early withdrawal penalty typically applied to these withdrawals will be waived.

On March 27, 2020, The Coronavirus Aid, Relief, and Economic Security (CARES) Act was passed by Congress and signed into law by President Trump. One of the provisions of this legislation that will directly impact many of our clients financial plan involves 2020 Required Minimum Distributions from retirement plans. We have been getting inquiries so wanted to address a common question we see are receiving.