Broker Check


April 02, 2020

We hope that you are safe and sound! Many thoughts and prayers sent your way. Today, we have 3 main points we want to emphasize as we are dealing with the chaos of Covid-19.

  1. In previous email, we discussed the provisions of the CARES Act. One of the key provisions is that you are not required to take Required Minimum Distributions (RMDs) for 2020 whether you turn 72 this year or are older from Individual Retirement Accounts (IRAs), 401k, 403b, TSP, or other type of tax-qualified retirement account or have an inherited IRA that you may have received from someone like your parent, other loved ones, or friends.
    • As we focus on retirement income, first and foremost, if you need your RMD to meet your income needs and obligations please continue to draw it.
    • We recognize that for some of our clients they really do not need their RMDs to meet their retirement income needs and prefer not to take it. Our team is trying to work to reach out to clients who have communicated to us in the past about this. However, this is one of the main reasons or this email. Please reach out to us as soon as possible if you have one automatically scheduled to come up and you would like us to stop for 2020 and then continue for 2021.
    • What if I took my RMD already in 2020 and I would have preferred not to do so? We have been researching this and there is nothing definitive on this. A lot has taken place due to Covid-19 and the commentary is limited. If you took your RMD in January or early February, we are not sure what recourse we can do. We have read some practitioners say that if you have taken your RMD within 60 days and want to put it back, we may be able to use the 60-day rollover rule and put it back. Each person is allowed only one per year. If this applies to you, please reach out to our team and we will work with providers to see what we can do.
  2. We have had clients with inquiries about distributions on IRAs, hardship withdrawals and loans from 401k. If you have a financial hardship as a result of the effects of Covid-19, in 2020, you can take money out of your IRA penalty free. It still may be subject to tax. It is important to distinguish hardship withdrawal on 401k or 403b from a loan. Hardship withdrawal means you are taking money out with no intention of paying back whereas a loan you are taking out with intention of paying back. Hardship withdrawals from 401k have a few more strings attached than IRAs and it may be easier to draw IRA funds than money in 401k or 403b.
  3. Finally, we just completed the first quarter of 2020. Many of you will be receiving statements from your investments if you receive monthly or quarterly. Paul Smeton, one of our most experienced advisors and has helped many clients through previous bear markets, offers some insights in the article below: Blind Date and Investing. Usually, it is good to periodically look at our statements. However, in studying behavioral finance, in times of bear markets, we have to know ourselves. We have to know ourselves and how we think we may respond if we look. It would be normal to not look and many of our clients have told us that they do this.