Fresno Financial Consultant: January 2021 Highlights

Fresno Financial Consultant: January 2021 Highlights

Fresno Financial Advisor News: What to Expect: A New Term In Washington

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Overview

2020 brought a very powerful pair of crises: A worldwide pandemic and the deepest recession since World War II. While most Americans have been affected in one way or another, the variance in impact on individual households is staggering — kind of like the way a tornado can demolish one house but leave the homes situated on either side intact.

Households in which income could continue to be earned, be it from an essential job such as a health care worker, grocery stork clerk or mail carrier, or a position which could be transitioned to work from home, have in many cases been unscathed by the economic decline. Yet others with employees who work in hard-hit industries such as travel, hospitality, food and beverage may have lost their jobs, their livelihood and even their health insurance, life insurance and matching retirement plan contributions. Many entrepreneurs have had to shutter their small businesses. For these households, the economic situation may be dire, threatening their ability to pay for basic necessities such as food, housing and transportation.1

Worldwide, millions of people have been displaced from jobs, consumer spending has dropped precipitously and company plans for growth and expansion have been put on hold. All G7 countries experienced significant plunges in gross domestic product this spring.2

New U.S. Leadership

Joe Biden and Kamala Harris have published detailed plans on how they intend to tackle the COVID crisis and economic decline, which some analysts predict will outlive the pandemic.4 The Biden-Harris administration also is prepared to address citizen protests and initiatives, which have drawn attention to other timely issues, such as racial equality and climate change, over the past few years.

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Fresno Retirement Consultant News: Will You Be Able To Afford In-Home, Long-Term Care?

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More than 90% of America’s older adults prefer to “age in place” in their own homes rather than in a senior housing community or facility.1 With today’s insight into how a deadly pandemic can affect nursing homes — as of September 6, COVID-19 has claimed nearly 55,000 nursing home residents’ lives — this preference may be prudent from a health care standpoint.2

However, aging at home also can be quite expensive. Much depends on the level and amount of care you require. And, as you can imagine, those levels are likely to increase as you get older. For some, it starts out as light housekeeping and running errands. That may progress into cooking meals and taking you to doctor appointments. Eventually, you may need someone to help you dress, groom and move around. A few hours a week could eventually change into 24-hour care, depending on your rate of health and/or mental decline.

According to the 2019 Genworth Cost of Care Survey, the average cost of an in-home caregiver is $22.50 per hour.3 If you need someone for eight hours a day, that could run you about $5,400 a month. If you need 24-hour care because, for example, you need help walking to the bathroom in the middle of the night, that cost could quickly amount to $16,200 a month. Is that a potential cost you’ve factored into your retirement income plan?

For many, the answer is no. We tend to plan as well as possible and hope for the best. If you’d like to explore different insurance options to help pay for potential long-term care needs, we can help. Contact us for more information.

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Fresno Financial Consultant News: What To Expect From the Payroll Tax Holiday

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Christmas came early this year. Well, sort of. In an effort to provide financial aid to millions of Americans in dire economic straits, President Trump declared a payroll tax holiday between September and the end of the year. Available to workers who earn $104,000 a year or less, this means that no FICA taxes will be taken out of paychecks by employers that opt into the program.1 This enables workers to take home more income.

Unfortunately, while that may help households whose hours have been reduced, are burdened with health care bills or other expenses that have cropped up during the pandemic, it doesn’t help the 27 million people who actually lost their jobs.2

The payroll tax is noted as a FICA tax on paycheck stubs. It refers to the Federal Insurance Contributions Act, which deducts taxes before wages are paid allowing the government to pay for the Social Security and Medicare programs. This means 6.2% of your salary up to the first $137,700, is deducted from your take-home pay.3 According to the Social Security Administration, 95% of U.S. workers make less than $137,700 a year. The 5% who earn more pay no additional FICA taxes on their income above $137,700.4

To put this into perspective, if you make $100,000 a year, 100% of your income is subject to FICA taxes. If you make $500,000 a year, less than 28% of your income is subject to FICA taxes.

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Fresno Retirement Advisor News: Preparing for Potential Pandemics

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If you think the economic decline due to the pandemic has been difficult for you personally, the big picture numbers may be even worse. Analysts project that the total economic disruption could eventually cost between $9 trillion and $33 trillion. Many economists are advocating that the U.S. — and the world — make a concerted effort to prevent future pandemics.1 Much like individual health care, the cost for prevention is significantly less than the cost of treatment.

In fact, the coronavirus has exposed many weaknesses in our infectious-disease surveillance and ability to respond quickly and effectively. While state governments continue to work on their current response, many in the private sector are looking toward the future.2

We advise our clients to retain that same perspective. If your retirement portfolio is built to weather an economic decline, you likely have financial vehicles that can help supplement your household income during financial difficulties. By keeping your investments focused on the long term, they can help you ride out market volatility and give your money the opportunity to continue growing. If you’d like advice in this area, we are here for you.

Government attempts to revive the economy have been mixed. The quick efforts to roll out stimulus legislation to benefit consumers and small business ran into headwinds. Many states’ unemployment programs were not built to handle so many claims at once, resulting in delays and confusion. The application system for small business loans led to haphazard benefits, wherein many small employers lost out while large corporations, such as Shake Shack and the Los Angeles Lakers, received millions (although both companies returned the money).

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Other Fresno Financial Advisor Articles

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Our firm is not affiliated with the U.S. government or any governmental agency.

We are an independent firm helping individuals create retirement strategies using a variety of insurance products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic retirement income strategies and should not be construed as financial advice. Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Soutas Financial & Insurance Solutions, Inc are not affiliated companies. California Insurance License # OK48173

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. Investing involves risk, including possible loss of principal. Insurance product guarantees are backed by the financial strength and claims-paying ability of the issuing company. Diversification cannot ensure a profit or guarantee against losses in a declining market. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference. 722736 – 9/20