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Information/ Tips For Individuals to Help Get Through COVID-19 Crisis

During these incredibly unusual and disruptive times, the federal government has made numerous changes and updates that will impact your personal financial situation for you and your family. As a result of these changes we have provided a list of financial planning categories with a few tips and action items to consider:

 

Direct Cash Payments to Families

  • Checks or deposits are expected to be made beginning the week of April 6.
  • Method of payment will replicate the same method you used to file your last tax return
  • Maintain a larger than normal cash reserve for unexpected cash outlays

 

Unemployment Assistance

  • Apply for state unemployment if you have been laid off or terminated
  • Average state unemployment weekly benefit ranges between $200-$550 per week
  • The federal government will add $600 per week over and above state unemployment benefits for up to four months
  • If you are currently collecting unemployment, the expiration date on your benefits has been extended for an additional 13 weeks

 

Student Loans

  • You may discontinue any payments you are making until September 30, 2020
  • No interest or penalties will apply
  • Any auto or direct payment on loans will continue unless you turn off auto payment

 

Personal Income Tax Planning

  • You can make charitable contributions of up to $300 cash and qualify for a deduction above and beyond the current standard deduction
  • You may skip required mandatory distribution from IRAs and 401k plans for 2020
  • HSA usage has been expanded to include over the counter medications

 

Investment Planning

  • Review your investments to make sure you have the correct allocations of equities and fixed income assets
  • Equities have lost considerable value so, for many, rebalancing into equities could make sense
  • If your portfolio was too heavily weighted in equites to begin with some have now realized they should have a higher percentage in fixed income
  • Most advisors will suggest not to make changes based on fear or emotions. Moving everything to cash will require a subsequent decision on when to get back in. Effectively timing the market is very difficult and can have devastating consequences to performance.
  • Understand income tax consequences of buying and selling in a taxable brokerage account. You can make changes in IRAs and 401ks without incurring tax consequences.

 

About the Author

Robert Canterbury, CFP® is a Wealth Advisor with BST, where he helps clients in various life stages with their personal financial planning. When working with clients, he takes a holistic approach which includes a strong emphasis on retirement planning and employee benefits, particularly pension plans, 401(k)s, stock options, deferred compensation, and HSAs.

rcanterbury@bstco.com/ 518-459-6700


Posted on March 31, 2020 at 11:09 AM