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About 8.5% of U.S. households are headed by a self-employed person. While self-employed households tend to earn higher income than salaried households, research shows they also tend to take the biggest hit during an economic downturn.1
The emergence of independent contractors and the gig economy helped make self-employment a more viable option for Americans after the 2008 recession. Now, steps are being taken to help self-employed workers weather another economic struggle. For the first time, Congress passed legislation providing unemployment benefits for self-employed workers, including up to 39 weeks of coverage and an extra $600 a week through the end of July.2
The COVID-19 pandemic and its effects have been a difficult experience for everyone. Let us know if you need help creating a household budget during this unprecedented time.
One of the biggest detriments of losing a job is the possibility of losing health insurance, or at least being unable to afford higher premiums charged by COBRA. Because this recent crisis is a health care issue, the nation may consider the idea of de-coupling health insurance from employers. This would enable more workers to start their own businesses, and generate significant overhead savings for companies.3 At the very least, loss of income would not mean loss of health care coverage for the millions of Americans who receive employer-sponsored insurance.
Many companies have resisted allowing employees to work from home because of questions about productivity, logistics and technology challenges. However, the COVID-19 requirements for social distancing may push businesses to fully embrace the concept of off-site workers long term. According to Global Workplace Analytics, an employer can save about $11,000 a year per worker who telecommutes 50% of the time.4
Unfortunately, the 2018 Tax Cuts and Jobs Act eliminated the unreimbursed employee expense deduction for those now working from home. Therefore, even if your employer requires that you work from home for the rest of the year, you are currently unable to claim this tax deduction. Only the self-employed who work from home will be able to write off qualified expenses from their business income.5
However, working from home may be able to generate savings on some of your household expenses, such as work clothes, dry cleaning, lunches out and commuting to work. According to a study by FlexJobs, remote workers can save as much as $4,000 a year by working at home.6
There are other benefits, as well. For example, the average employee’s commute to work takes 26 minutes each day, adding up to four and a half hours in the car each week. If Americans reduced their commute by just one day a week, that would result in a 16% reduction in the U.S. carbon footprint. Plus, imagine how that newfound time could be put to better use.7
A month or two ago, working from home may have appeared to be a dream job, but many now forced into this arrangement may recognize its challenges, such as working longer hours; more distractions; and having a tougher time focusing on productivity, technology challenges, and juggling work and family life. The key is to find productivity during breaks from work, doing things like laundry, getting meals started, and taking time to exercise, all without even having to shower to go back to work.
America, and the world, will get through this pandemic, but in the meantime, we might as well learn from the experience and take away as many lessons as we can going forward.
Fresno Financial Planner Takeaways
As your Fresno financial advisor, we thought this was a good takeaway: The emergence of independent contractors and the gig economy helped make self-employment a more viable option for Americans after the 2008 recession. Now, steps are being taken to help self-employed workers weather another economic struggle. Many companies have resisted allowing employees to work from home because of questions about productivity, logistics and technology challenges. However, the COVID-19 requirements for social distancing may push businesses to fully embrace the concept of off-site workers long term. There are other benefits, as well. For example, the average employee’s commute to work takes 26 minutes each day, adding up to four and a half hours in the car each week.
Diversifying your retirement assets among a variety of vehicles and alternatives—both insurance and investment oriented, depending on what is appropriate for your situation—may offer you a better chance of meeting your retirement income goals throughout your lifespan. We help our clients with the following…stop spend down and long term care strategies that can help you accomplish those goals.
Soutas Financial & Insurance Solutions Inc., your Fresno portfolio advisor, are committed to helping take the complexity out of retirement planning. By using a variety of insurance and investment products such as trusts, probates, charitable giving, estate planning, or tax-efficient strategies, we can help you develop an overall retirement income strategy specific to you and your family. We have a strong team of professionals helping ensure you receive all the assistance you need not only in developing your retirement income strategy, but in maintaining it throughout your retirement. Contact us today at 559-230-1648 or visit us today at Soutas Financial to get your retirement plans on track for success!
Other Fresno Financial Advisor Articles
Soutas Financial & Insurance Solutions Inc.
333 W. Shaw Avenue Suite 106
Fresno, CA 93704
(559) 230-1648
Soutas.com
Content prepared by Kara Stefan Communications.
1 Karen Kaul and Laurie Goodman. Urban Institute. Jan. 14, 2019. “The mortgage market is not meeting the needs of self-employed workers.” https://www.urban.org/urban-wire/mortgage-market-not-meeting-needs-self-employed-workers. Accessed March 31, 2020.
2 Brittany Hoke. WTAE Pittsburgh. March 30, 2020. “Self-employed workers eligible for unemployment for the first time.” https://www.wtae.com/article/self-employed-workers-eligible-for-unemployment-for-the-first-time/31984815. Accessed March 31, 2020.
3 Phil Galewitz. Kaiser Health News. June 7, 2019. “Why Some CEOs Figure ‘Medicare For All’ Is Good For Business.” https://khn.org/news/a-large-employer-frames-the-medicare-for-all-debate/. Accessed March 31, 2020.
4 Lindsey Jacobsen. CNBC. March 23, 2020. “As coronavirus forces millions to work remotely, the US economy may have reached a ‘tipping point’ in favor of working from home.” https://www.cnbc.com/2020/03/23/what-coronavirus-means-for-the-future-of-work-from-home.html. Accessed March 31, 2020.
5 Darla Mercado. CNBC. March 26, 2020. “Stuck working from home? It won’t save you much on your taxes.” https://www.cnbc.com/2020/03/26/stuck-working-from-home-it-wont-save-you-much-on-your-taxes.html. Accessed March 31 2020.
6 Aimee Picci. USA Today. March 23, 2020. “If you’re working from home, chances are you’ll save money.” https://www.usatoday.com/story/money/2020/03/22/working-home-likely-save-you-money/5024967002/. Accessed March 31, 2020.
7 Science Times. March 31, 2020. “How COVID-19 Could Change the Future of Work.” https://www.sciencetimes.com/articles/25152/20200331/how-covid-19-could-change-the-future-of-work.htm. Accessed March 31, 2020.
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. 659682 – 6/20
“The federal pandemic influenza plan and public health experts predict that should the H5N1 influenza virus mutate in such a way that human-to-human transmission can easily occur, approximately 30 percent of the U.S. population could develop the disease. An influenza pandemic of some type could occur in the next few years … It is expected that there would be serious shortages of health care facilities, equipment, pharmaceuticals and personnel. The public health system and hospitals will be quickly overrun if even some of the estimated number of people become sick. It is important to realize that victims of this disease will, by default, need to be cared for in home-care settings, and we must plan accordingly.”
This might sound familiar to our current situation in 2020, but these conclusions are actually from a report published by the National Institutes of Health in 2007.1
The possible effects of a pandemic like COVID-19 were not entirely unexpected. Since the report above was released, the U.S. had more than 13 years to better prepare for a widespread illness by addressing problems in the nation’s health care system. Although the media continues to report health care is the top priority for Americans, the large, structural changes necessary to provide quality, affordable health care resources nationwide have not surfaced.
No retirement strategy is complete without addressing the costs of health care and long-term care. Retirees are living longer and health care expenses continue to rise.2 If you feel your retirement strategy may be inadequate to help cover medical expenses in the future, please give us a call. We can discuss insurance products, such as life insurance and annuities, that can provide various options that may help meet your financial needs.
To be fair, 80% of Americans are mostly concerned with their own out-of-pocket health care costs.3 However, just offering individuals a financial “Band-Aid” does not address the underlying causes of growing costs related to health care government policies.4 A 2017 study found the U.S. spends $812 billion a year in administrative costs alone, as they relate to insurance companies and overhead associated with medical practices managing the claims processes.5
The problems have been identified, but unfortunately, no universal solution has been agreed upon. Republicans and Democrats are on opposite sides of the debate — less versus more government intervention — and there’s even a diverse range of policy proposals within the Democratic party. Meanwhile, the wide partisan divide continues in Washington, D.C., and the stalemate continues for 13 years and counting.6
If health care wasn’t a commanding issue in the country before the COVID-19 pandemic, it certainly is now.
Fresno Retirement Consultant Takeaways
Soutas Financial your Fresno financial planner would like to remind you of these points. The possible effects of a pandemic like COVID-19 were not entirely unexpected. Although the media continues to report health care is the top priority for Americans, the large, structural changes necessary to provide quality, affordable health care resources nationwide have not surfaced. However, just offering individuals a financial “Band-Aid” does not address the underlying causes of growing costs related to health care government policies.4 A 2017 study found the U.S. spends $812 billion a year in administrative costs alone, as they relate to insurance companies and overhead associated with medical practices managing the claims processes.5
Soutas Financial & Insurance Solutions Inc. your Fresno financial planning consultant is committed to helping take the complexity out of retirement planning. By using a variety of insurance and investment products such as trusts, probates, charitable giving, estate planning, or tax-efficient strategies, we can help you develop an overall retirement income strategy specific to you and your family. We have a strong team of professionals helping ensure you receive all the assistance you need not only in developing your retirement income strategy, but in maintaining it throughout your retirement. Contact us today at 559-230-1648 or visit us today at Soutas Financial to get your retirement plans on track for success!
Other Fresno Financial Advisor Articles
Soutas Financial & Insurance Solutions Inc.
333 W. Shaw Avenue Suite 106 Fresno, CA 93704
(559) 230-1648
Soutas.com
Content prepared by Kara Stefan Communications.
1 Peter J. Levin, Eric N. Gebbie and Kristine Qureshi. National Institutes of Health. Sep-Oct 2007. “Can the Health-Care System Meet the Challenge of Pandemic Flu? Planning, Ethical, and Workforce Considerations.” https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1936949/. Accessed March 16, 2020.
2 Milken Institute of Public Health. April 6, 2018. “The Growing Cost of Aging in America Part 1: An Aging Population and Rising Health Care Costs.” https://publichealthonline.gwu.edu/cost-of-aging-healthcare/. Accessed March 16, 2020.
3 Adam Cancryn. Politico. Feb. 9, 2020. “POLITICO-Harvard Poll: Health care costs are top priority heading into elections.” https://www.politico.com/news/2020/02/19/poll-health-care-election-115866. Accessed March 16, 2020.
4 Jim Probasco. Investopedia. Oct. 16, 2019. “Why Do Healthcare Costs Keep Rising?” https://www.investopedia.com/insurance/why-do-healthcare-costs-keep-rising/. Acessed March 16, 2020.
5 Joanne Finnegan. Fierce Health care. Jan. 7, 2020. “How can U.S. healthcare save more than $600B? Switch to a single-payer system, study suggests.” https://www.fiercehealthcare.com/practices/how-can-u-s-healthcare-save-more-than-600b-switch-to-a-single-payer-system-study-says. Accessed March 16, 2020.
6 Julie Rovner. NPR. Jan. 29, 2020. “U.S. Elections 2020: Understanding What’s At Stake For Health Care.” https://www.npr.org/sections/health-shots/2020/01/29/800652075/u-s-elections-2020-understanding-whats-at-stake-for-health-care. Accessed March 16, 2020.
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. 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. 628462
Financial advisors often tell clients to keep an emergency fund of liquid assets, with enough to cover three to six months of living expenses. It makes you wonder why America’s largest companies don’t maintain a similar practice, with three to six months of emergency savings to help keep workers on payroll during difficult times.
Unfortunately, it is common during economic downturns, including pandemics, for companies to reduce hours, send workers home without pay or lay off employees altogether.1 This is why it’s important for every household to have a contingency plan for when the unexpected happens.
If you don’t have a plan B for loss of income, savings or investment dividends — or if your plan B isn’t working and you need to come up with a plan C — we’re here for you. Give us a call to discuss ways to position assets to help establish greater financial confidence for your household moving forward.
Federal regulators recently announced that homeowners unable to pay their mortgage due to lost income from the COVID-19 pandemic may be eligible to reduce or suspend their mortgage payments for up to 12 months.2 Consider your options carefully, particularly if you have enough savings to cover these payments for the foreseeable future. Homeowners will have to work out a repayment plan with their lender, which could result in higher monthly payments or extending the term of the loan.
If you have any supplemental insurance policies, you may want to pull out those contracts and read about their coverages and exclusions. For example, critical illness insurance is not likely to cover COVID-19 because it’s not a specified illness on the policy.
Small businesses are generally advised to create a contingency plan, but this is usually comprised of things like capital and credit sources, supply chain alternatives, and even a public relations crisis management plan.3 While keeping home-bound workers on the payroll is an unusual tactic, small business owners may want to consider the alternative. When the economy recovers and jobs ramp back up, you’ll have to start the recruitment process all over again and may lose out on regaining your highly trained talent.
According to the Work Institute’s 2017 Retention Report, the replacement cost is $15,000 per employee earning $45,000 a year.4 If the current loss of business lasts three months, how does that compare to the cost of keeping already trained and productive workers on the payroll during the pandemic?
There’s a bigger picture, as well. Those who lose their jobs and income cease to be active consumers, which slows down the economy and makes it harder for small businesses to recover.
Fresno Retirement Advisor Takeaways
As your Fresno financial advisor we thought this was a good takeaway. Financial advisors often tell clients to keep an emergency fund of liquid assets, with enough to cover three to six months of living expenses. Federal regulators recently announced that homeowners unable to pay their mortgage due to lost income from the COVID-19 pandemic may be eligible to reduce or suspend their mortgage payments for up to 12 months.2 If you don’t have a plan B for loss of income, savings or investment dividends — or if your plan B isn’t working and you need to come up with a plan C — we’re here for you.
Soutas Financial & Insurance Solutions Inc. your Fresno financial planner is committed to helping take the complexity out of retirement planning. By using a variety of insurance and investment products such as trusts, probates, charitable giving, estate planning, or tax-efficient strategies, we can help you develop an overall retirement income strategy specific to you and your family. We have a strong team of professionals helping ensure you receive all the assistance you need not only in developing your retirement income strategy, but in maintaining it throughout your retirement. Contact us today at 559-230-1648 or visit us today at Soutas Financial to get your retirement plans on track for success!
Other Fresno Financial Advisor Articles
Soutas Financial & Insurance Solutions Inc.
333 W. Shaw Avenue Suite 106 Fresno, CA 93704
(559) 230-1648
Soutas.com
Content prepared by Kara Stefan Communications.
1 Carmen Reinicke. Business Insider. March 20, 2020. “The coronavirus outbreak is causing a historic spike in US layoffs. Here’s what 4 Wall Street experts are saying – and how much worse they think it can get.” https://markets.businessinsider.com/news/stocks/us-layoffs-spiking-coronavirus-expert-reaction-commentary-economy-unemployment-analyst-2020-3-1029016785. Accessed March 20, 2020.
2 Chris Arnold. NPR. March 19, 2020. “U.S. Orders Up To A Yearlong Break On Mortgage Payments.” https://www.npr.org/2020/03/19/818343720/homeowners-hurt-financially-by-the-coronavirus-may-get-a-mortgage-break. Accessed March 20, 2020.
3 Mike Fried. ROI. March 16, 2020. “Five considerations for pandemic event preparedness.” https://www.roi-nj.com/2020/03/16/opinion/five-considerations-for-pandemic-event-preparedness/. Accessed March 20, 2020.
4 Valerie Bolden-Barrett. HR Dive. Aug. 11, 2017. “Study: Turnover costs employers $15,000 per worker.” https://www.hrdive.com/news/study-turnover-costs-employers-15000-per-worker/449142/. Accessed March 20, 2020.
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 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. 628462
As the COVID-19 strain of the coronavirus flows through our nation’s population, many Americans may find themselves working shorter shifts, working from home, on paid or unpaid medical leave, furloughed or even laid off. While additional remedies from federal, state and local governments may be forthcoming to help households sustain financial stability, there are programs also available now.
We’ve compiled a sample of currently available government programs designed to help insure or supplement income for Americans.
If you’re unable to work because you have or were exposed to COVID-19, once you are certified by a medical professional, you may be able to file a disability insurance (DI) claim. DI can provide up to 80% of your gross income and usually lasts three to six months. Eligible workers must have lost all or part of their wages due to a non-work-related illness, injury or pregnancy.1
Social Security disability benefits may be available to workers who have been employed for a qualifying period of time at one or more jobs covered by Social Security. To be eligible to receive monthly benefits, workers must have a medical condition that meets Social Security’s definition of disability, which includes being unable to work for a year or more.2
Employees who work for a company that shut down operations due to the coronavirus may be able to file an unemployment insurance claim. Employees who lost their job as a result of coronavirus layoffs are expected to receive at least $600 per week,3 but with a projected 2.25 million people claiming unemployment insurance in mid-March, some question whether everyone eligible will receive it.4 The global impact of the virus, and its effect on the economy, remains to be seen. Now may be a better time than ever to check in with your financial professional to see if your current retirement income strategy remains on course.
Fresno Financial Consultant Takeaways
As your Fresno retirement plan professionals we felt the following ideas were top notch: During these trying times of coping with the COVID-19 strain of the coronovirus, many Americans may find themselves working shorter shifts, working from home, on paid or unpaid medical leave, furloughed or even laid off. What can you do? If you’re unable to work because you have or were exposed to COVID-19, once you are certified by a medical professional, you may be able to file a disability insurance (DI) claim. Employees who work for a company that shut down operations due to the coronavirus may be able to file an unemployment insurance claim. Employees who lost their job as a result of coronavirus layoffs are expected to receive at least $600 per week,3 but with a projected 2.25 million people claiming unemployment insurance in mid-March, some question whether everyone eligible will receive it.4
Soutas Financial & Insurance Solutions Inc. your Fresno financial advisor is committed to helping take the complexity out of retirement planning. By using a variety of insurance and investment products such as trusts, probates, charitable giving, estate planning, or tax-efficient strategies, we can help you develop an overall retirement income strategy specific to you and your family. We have a strong team of professionals helping ensure you receive all the assistance you need not only in developing your retirement income strategy, but in maintaining it throughout your retirement. Contact us today at 559-230-1648 or visit us today at Soutas Financial to get your retirement plans on track for success!
Other Fresno Financial Advisor Articles
Soutas Financial & Insurance Solutions Inc.
333 W. Shaw Avenue Suite106 Fresno, CA 93704
(559) 230-1648
Soutas.com
Content prepared by Kara Stefan Communications.
1 Derek Silva. Policy Genius. March 17, 2020. “Does disability insurance cover coronavirus (COVID-19)?” https://www.policygenius.com/disability-insurance/disability-insurance-and-coronavirus/. Accessed March 24, 2020.
2 Social Security Administration. 2020. “Benefits Planner: Disability: How You Qualify.” https://www.ssa.gov/planners/disability/qualify.html. Accessed March 9, 2020.
3 Dylan Matthews.Vox. March 24, 2020. “The coronavirus unemployment insurance plan, explained.” https://www.vox.com/future-perfect/2020/3/24/21188470/coronavirus-unemployment-benefits-senate-stimulus. Accessed March 24, 2020.
4 Annalyn Kurtz. CNN Business. March 20, 2020. “Goldman Sachs predicts 2.25 million Americans filed initial unemployment claims this week, the highest on record.” https://www.cnn.com/2020/03/19/economy/unemployment-benefits-goldman-sachs/index.html. Accessed March 31, 2020.
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 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. 628462
The Dow Jones Industrial Average (DJIA), the S&P 500 and the Nasdaq experienced quite a roller coaster ride in March. There are mixed opinions as to whether it was due to the global economic impact of the seemingly unstoppable new COVID-19 coronavirus or due to the federal government’s delayed response and tactical efforts to constrain the virus. Or, perhaps more likely, both.
Regardless of the reasons, they are largely out of the control of individual investors. So, what do you do? Much depends on your own individual circumstances. As we learn in Investing 101, it’s a matter of getting back to the basics. What are your financial goals? When do you need to achieve them? How much risk are you willing to take?
These three questions basically translate to: How much money do you need, how old are you and what keeps you up at night? If you are near or early in retirement, you may justifiably be losing sleep worrying about the current market volatility. We may be able to help. Feel free to schedule some time to speak with an experienced financial advisor to help you figure out if you should make any changes to your investment portfolio and, if so, what is an appropriate investment strategy for you.
Speaking of Investing 101, let’s break down some of the terms you may be hearing in the financial media to better define what they could mean for your situation.
Sequence of Returns
On the surface, “sequence of returns” means annual performance numbers throughout a period of time. It may just be one or two years, but if the investment markets perform poorly in the year or two before or after you retire, it could have a significant impact on how long your nest egg will last. Individuals who retire right around a significant and/or extended market decline could end up drawing income from their investment principal instead of investment earnings. In this situation, it may be worth considering other options, such as working longer so you can continue contributing to your investment accounts and allow time for recovery.1
Cash Reserves
This means you should have an emergency fund, preferably equal to six months of income —most likely in a bank account. Even if you have these liquid assets, it may be worth delaying projects such as home improvements, expensive travel plans, buying a second home or other major purchases until the markets have stabilized. Having such an emergency fund available can offer a sense of financial security that no amount of beach vacations can equal.2
Defensive Positions
Perhaps you want to stay fully invested in the market, but you’re concerned about losses. According to market analysts at Bank of America Securities, you may want to consider equities that have the potential to provide higher yields during periods of volatility. Sectors more likely to thrive during a health pandemic include data centers, grocery-anchored strip malls, medical office buildings, self-storage centers and towers for wireless carriers.3
Wait and See
Not many investors have the stomach to invest more money during a flailing market. However, there may be opportunities to purchase “bargains” — such as airline securities — that are likely to be hit the hardest yet have the potential to rebound quickly. After all, we will remain in a global economy, and business trips will resume after the pandemic has subsided.
Fresno Financial Planner Takeaways
When it comes to Fresno retirement planning Soutas Financial puts your future first. Don’t forget these great reminders. The Dow Jones Industrial Average (DJIA), the S&P 500 and the Nasdaq experienced quite a roller coaster ride in March. Regardless of the reasons, they are largely out of the control of individual investors. So, what do you do? What are your financial goals? When do you need to achieve them? How much risk are you willing to take? Feel free to schedule some time to speak with an experienced financial advisor to help you figure out if you should make any changes to your investment portfolio and, if so, what is an appropriate investment strategy for you.
Soutas Financial & Insurance Solutions Inc., your Fresno retirement plan professionals, are committed to helping take the complexity out of retirement planning. By using a variety of insurance and investment products such as trusts, probates, charitable giving, estate planning, or tax-efficient strategies, we can help you develop an overall retirement income strategy specific to you and your family. We have a strong team of professionals helping ensure you receive all the assistance you need not only in developing your retirement income strategy, but in maintaining it throughout your retirement. Contact us today at 559-230-1648 or visit us today at Soutas Financial to get your retirement plans on track for success!
Other Fresno Financial Advisor Articles
Soutas Financial & Insurance Solutions Inc.
333 W. Shaw Avenue Suite106 Fresno, CA 93704
(559) 230-1648
Soutas.com
Content prepared by Kara Stefan Communications.
1 Allessandra Malito. MarketWatch. March 15, 2020. “Retiring soon? Here’s how you should handle these crazy market drops.” https://www.marketwatch.com/story/retiring-soon-heres-how-you-should-handle-these-crazy-market-drops-2020-03-09?mod=home-page. Accessed March 24, 2020.
2 Knowledge@Wharton. Feb. 3, 2020. “How to Recession-proof Your Retirement.” https://knowledge.wharton.upenn.edu/article/how-to-recession-proof-your-retirement/. Accessed March 24, 2020.
3 Tomi Kilgore. MarketWatch. March 7, 2020. “These are the safest and highest dividend-yielding REITs as the coronavirus spreads, BofA says.” https://www.marketwatch.com/story/these-are-the-safest-and-highest-dividend-yielding-reits-as-the-coronavirus-spreads-bofa-says-2020-03-06?mod=home-page. Accessed March 24, 2020.
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 and investment products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial or investment advice. All investments are subject to risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.
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 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. 628462
Dale Soutas, Fresno Financial Advisor & Retirement Planning Subscribe today for life-changing financial advice anytime, anywhere. COVID-19 ALERT Helping to Take Care of You … No Matter What Schedule a Phone Meeting Today
You don’t have to go it alone In this season of uncertainty, we’re here for you, ready to answer your questions, offer a second opinion on your retirement income strategy or just listen to what’s on your mind. As financial professionals and neighbors living through the uncertainty with you, we’re uniquely positioned to help you navigate your retirement future. We can look at your income strategy to see if you’re on track to meet your goals or need to make some adjustments.
Or, we can simply listen to what’s most important to you and help you make decisions about next steps. Whatever happens, we’re all in this together … and we’ll get through it together too. Give us a call and let’s talk about how to help take care of you and your loved ones in the weeks, months and years ahead.
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You made it. Years of hard work, investing, planning, and now you’re here. The long-awaited reward you spent a lifetime looking forward to. But what now? After years of growing a nest egg, now you may want to manage it, use it to fund your dreams. Make it last as long as you need it, and leave some for those you love. What do you do?
Wall Street continues to be uncertain, and some conservative options have dropped though the floor. How do you maintain opportunities for growth and reduce risk of loss or market changes? That’s where we come in. We are financial professionals. From investments and insurance products, to tax reduction strategies and guaranteed retirement income you cannot outlive, provided by the claim paying ability of insurance companies. You’ve worked a lifetime to get here.
Let us help you enjoy it to the fullest.
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Remember when life was simpler? When things didn’t move quite so fast, and the world didn’t seem so complex? Remember that? We do. And as the world around us has continued to speed up, becoming more complicated, and still a bit uncertain, we have managed to keep things simple, providing sound, easy to understand financial advice and customized road-maps for the road ahead.
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The federal minimum wage is set at $7.25 an hour, a rate that has not increased in more than 10 years, not even to keep pace with the cost of living. Even so, the national average minimum wage is $11.80, but only because some states have increased their minimum floor.1 In 2020, another 24 states are set to increase their minimum wage for workers, ranging from $8.56 to $15.00 an hour.2
While you may work the same job at the same company as another individual, but in another state with a similar cost of living, you could earn substantially less money. That means a couple with a stay-home parent in which the income earner works full time for the federal minimum wage, the household income would be far below the federal poverty level for a family of three ($21,720 in 2020).3
Regardless of how much income we earn, we each must learn to manage our own money — living within our means and controlling our spending habits and whatever indulgences cause us to go off course. It also means insuring against the potential of large losses from which we may have difficulty recovering financially. If we can help you figure out your insurance needs or help you address them, please let us know.
Without a more universal set of minimum wage standards, the country may continue down the path of greater disparity between poor and wealthy states. It is perhaps for this reason that the concept of a universal basic income is making a resurgence after being historically considered several times. Back in the late 1700s, Thomas Paine was a proponent to help ensure founding families each had an equal shot at success. In the 1960s, President Nixon proposed a guaranteed annual income of $1,600 for families to ensure children would not not grow up in poverty and risk suffering from the subsequent long-term impacts.4
More recently, presidential candidate Andrew Yang proposed a universal basic income of $1,000 a month. The strategy is to bolster today’s low-income, poor and homeless populations; to help young people with student debt burdens; and to try to reduce the wealth gap between middle- and upper-income classes.5
Without better solutions, the U.S. could fall further into a widening income gap where the rich continue to get richer while the poor get poorer — or at least fall further and further behind the curve. This could include retirees who no longer earn a paycheck.
Remember that Social Security income is your income. It’s called a retirement program because you’re entitled to it; you and/or your spouse contributed money to the program throughout your careers (even if your career was as a homemaker, you may still be eligible to collect spousal benefits). However, even though you’re entitled to it, you won’t necessarily receive all of it, because a portion may be deducted to pay for Medicare premiums. If you have other sources of income, such as a pension, IRA withdrawals, part-time work, interest and dividends, you may have to pay income tax on your Social Security payments. You can elect to have income taxes deducted from your Social Security benefits before they’re paid out.6
Fresno Financial Consultant Takeaways
As your Fresno financial advisor we thought this was a good takeaway. The federal minimum wage is set at $7.25 an hour, a rate that has not increased in more than 10 years. While you may work the same job at the same company as another individual, but in another state with a similar cost of living, you could earn substantially less money. Regardless of how much income we earn, we each must learn to manage our own money — living within our means and controlling our spending habits and whatever indulgences cause us to go off course.
Soutas Financial & Insurance Solutions Inc. your Fresno financial planner is committed to helping take the complexity out of retirement planning. By using a variety of insurance and investment products such as trusts, probates, charitable giving, estate planning, or tax-efficient strategies, we can help you develop an overall retirement income strategy specific to you and your family. We have a strong team of professionals helping ensure you receive all the assistance you need not only in developing your retirement income strategy, but in maintaining it throughout your retirement. Contact us today at 559-230-1648 or visit us today at Soutas Financial to get your retirement plans on track for success!
Other Fresno Financial Advisor Articles
Soutas Financial & Insurance Solutions Inc.
333 W. Shaw Avenue Suite 106 Fresno, CA 93704
(559) 230-1648
Soutas.com
Content prepared by Kara Stefan Communications.
1 Stacey Vanek Smith and Cardiff Garcia. NPR. May 16, 2019. “The Real Minimum Wage.” https://www.npr.org/2019/05/16/723947780/the-real-minimum-wage. Accessed Feb. 7, 2020.
2 Paycor. Dec. 6, 2019. “Minimum Wage By State And 2020 Increases.” https://www.paycor.com/resource-center/minimum-wage-by-state. Accessed Feb. 7, 2020.
3 Kimberly Amadeo. The Balance. Feb. 5, 2020. “Federal Poverty Level Guidelines and Chart.” https://www.thebalance.com/federal-poverty-level-definition-guidelines-chart-3305843. Accessed Feb. 7, 2020.
4 Knowledge@Wharton. Jan. 17, 2020. “Can Universal Basic Income Work?” https://knowledge.wharton.upenn.edu/article/universal-basic-income/. Accessed Feb. 7, 2020.
5 Ibid.
6 Emily Brandon. U.S. News & World Report. Jan. 21, 2020. “How Much You Will Get From Social Security.” https://money.usnews.com/money/retirement/social-security/articles/how-much-you-will-get-from-social-security. Accessed Feb. 7, 2020.
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. 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. 628462
Within the scope of an investment portfolio, the commonplace 401(k) may seem to be a simplistic account. But it’s not, especially when it comes to estate and legacy planning. The named beneficiary on the plan will inherit your 401(k) regardless of your will’s instructions. And from there, a spectrum of various choices emerge based on a plethora of different variables.
First off, you can’t name anyone other than your spouse as the beneficiary unless you get your spouse to sign off on a form that says it’s OK. This rule is designed to protect a spouse from a partner who is considering a divorce and tries to put all of his or her financial accounts under his or her own name before announcing this intention.1
If you inherit a 401(k) from your spouse, what you decide to do with it and the subsequent tax impacts may depend largely on your age and whether or not your spouse had started taking required minimum distributions (RMDs) before he or she died. In general, you may (1) choose to leave the money in the plan and take distributions; (2) transfer the funds to an inherited IRA; or (3) transfer the money to your own IRA.2
If you are a non-spouse beneficiary of a 401(k) plan, the rules have changed recently. In late 2019, Congress passed legislation that limited a strategy called the “stretch IRA.” This strategy was particularly popular among people who had saved a substantial amount of money in their retirement accounts. It used to be that this type of beneficiary could potentially take distributions from the account throughout decades, based on the beneficiary’s age and life expectancy.3 This meant that those assets could continue growing tax-deferred indefinitely.
Now, as a result of the SECURE Act, most new non-spouse beneficiaries must fully distribute all the account’s inherited assets in 10 years or fewer after the death of the original account holder. If an account owner had previously set up a trust to be beneficiary of a qualified account prior to the SECURE Act, the new rules could lead to undesirable results. If you have such a trust as the account beneficiary, it’s important to have it reassessed to make sure the language doesn’t negatively impact the trust’s beneficiaries or create a tax disadvantage.4
There are more factors related to inheriting a 401(k) plan than just the recent SECURE Act provisions, including whether or not the account owner had reached the required date to start taking RMDs before death. The exact date depends on whether the account owner was still working at the company, had retired before age 70 ½ or was working at a different company.5
Suffice it to say that many things related to an inherited 401(k) are complex. And, while there are effective strategies, they can be complex, too. For example, you could decide to take advantage of spousal beneficiary strategies instead of naming a non-spouse. This might include the surviving spouse gifting the residual RMDs to other heirs or contributing that income to a taxable account and naming those heirs as beneficiaries upon her death, which may offer a strategic tax advantage.6
In short, estate and legacy planning is complicated business — even for something that seems straightforward, like a 401(k) plan. We can work with your estate planning and tax professionals to help you address these issues.
Fresno Financial Advisor Takeaways
Soutas Financial your Fresno financial planner would like to remind you about these points of interest. What do you do when you inherit a 401(k) from your spouse? If you inherit a 401(k) from your spouse, what you decide to do with it and the subsequent tax impacts may depend largely on your age and whether or not your spouse had started taking required minimum distributions (RMDs) before he or she died. In general, you may (1) choose to leave the money in the plan and take distributions; (2) transfer the funds to an inherited IRA; or (3) transfer the money to your own IRA.2 A great many things related to an inherited 401(k) are complex. And, while there are effective strategies, they can be complex, too. Make sure to seek financial advice before pursing a course of action.
Soutas Financial & Insurance Solutions Inc. your Fresno financial planning consultant is committed to helping take the complexity out of retirement planning. By using a variety of insurance and investment products such as trusts, probates, charitable giving, estate planning, or tax-efficient strategies, we can help you develop an overall retirement income strategy specific to you and your family. We have a strong team of professionals helping ensure you receive all the assistance you need not only in developing your retirement income strategy, but in maintaining it throughout your retirement. Contact us today at 559-230-1648 or visit us today at Soutas Financial to get your retirement plans on track for success!
Other Fresno Financial Advisor Articles
Soutas Financial & Insurance Solutions Inc.
333 W. Shaw Avenue Suite106 Fresno, CA 93704
(559) 230-1648
Soutas.com
Content prepared by Kara Stefan Communications.
1 Rebecca Lake. SmartAsset. Oct. 22, 2019. “A Guide to Inheriting a 401(k).” https://smartasset.com/retirement/inherited-401k. Accessed Feb. 24, 2020.
2 Ibid.
3 Greg Iacurci. CNBC. Dec. 17, 2019. “Lawmakers are killing this popular retirement tax break for the wealthy.” https://www.cnbc.com/2019/12/17/lawmakers-may-kill-this-popular-retirement-tax-break-for-the-wealthy.html. Accessed Feb. 24, 2020.
4 Alessandra Malito. MarketWatch. Jan. 9, 2020. “Inheriting a parent’s IRA or 401(k)? Here’s how the Secure Act could create a disaster.” https://www.marketwatch.com/story/inheriting-a-parents-ira-or-401k-heres-how-the-secure-act-could-create-a-disaster-2019-12-26. Accessed Feb. 24, 2020.
5 Rachel L. Sheedy. Kiplinger. May 30, 2019. “Inherited 401(k)s: 6 Questions Heirs Need to Ask.” https://www.kiplinger.com/slideshow/retirement/T001-S004-inherited-401k-6-questions-heirs-need-to-ask/index.html. Accessed Feb. 24, 2020.
6 Rhian Horgan. Nasdaq. Jan. 30, 2020. “2 IRA Changes to Consider Right Now, Thanks to the SECURE Act.” https://www.nasdaq.com/articles/2-ira-changes-to-consider-right-now-thanks-to-the-secure-act-2020-01-30. Accessed Feb. 24, 2020.
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. 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. 628462
Our firm provides links to third-party articles in an effort to assist users in locating information on topics that might be of interest to them. Information presented has not been verified and is not guaranteed, nor can we attest to the accuracy of information provided. Linking to an article or website does not constitute a representation of the services offered by our firm, nor does it constitute an endorsement by our firm of the sponsors of the site or the products presented on the site. The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual's situation.
Talk to your financial professional and your tax advisor about how Social Security benefits can fit into a complete retirement income strategy. Financial professionals are able to provide you with information but not guidance or advice related to Social Security benefits. We are not affiliated with the U.S. government or any governmental agency.
These financial calculators are designed as educational tools to help you estimate answers to common financial questions. They are not intended to predict future returns or results, nor do they represent the performance of any specific investment or product.