​This year has been a rollercoaster ride. COVID has dominated the headlines and impacted every aspect of our lives. It has shut down businesses, schools, and workplaces. It’s changed the way we interact and socialize. And of course, it has deeply impacted the economy and the financial markets.
 
It can be hard in 2020 to find the good news, but there actually are a few economic developments for which we can be grateful. There’s also quite a bit of uncertainty ahead of us. As we approach the end of 2020, now may be a good time to reflect on what has transpired over the past 11 months, and what steps you may need to take to prepare for what comes next.
 
Below are three positive developments that you may want to consider as you prepare for 2021:

COVID ended the longest bull market and longest economic expansion in history. The previous bull market started in 2009 and lasted for nearly a decade before crashing in just a few short weeks over February and January of this year.1
 
Between February 19 and March 23, the S&P 500 fell 33.93%. Since that point, though, the markets have surged. From March 23 through October 29, the S&P 500 is up 47.94% and is nearly back to its pre-COVID levels.2
 
As mentioned, though, there is still uncertainty ahead. The COVID pandemic is far from over. There’s also uncertainty about how the results of the election will impact the markets, the economy, and the country’s COVID response.
 
While the market's rebound is a fortunate turn of events, there’s no guarantee that it will continue. Now is a good time to evaluate your strategy and lock-in any gains before another potential downturn occurs. A financial professional can help you explore options.

In the second quarter, GDP fell by 31.4%, the largest quarterly drop in history. In the third quarter, it rebounded by 33.1%, the largest quarterly gain in history. That number easily beat the previous record of 16.7% in the third quarter of 1950.3
 
Much of the rebound was driven by the service industry and the reopening of much of the economy. Of course, the continuing rise in COVID cases may threaten the economic rebound. Twenty-nine states hit record levels for daily new cases in October. Forty states had an increase of 10% just in the last week of October.4

The COVID pandemic and its economic fallout have created financial challenges for millions of Americans. While the government is still debating a second round of stimulus, the first round, known as the CARES Act, continues to provide financial flexibility for those facing difficulties.
 
As part of the CARES Act, you can withdraw up to $100,000 from your 401(k) or IRA without facing early distribution penalties. The taxes on the distribution can even be spread out over a three-year period.5
 
Granted, withdrawing money from your 401(k) or IRA isn’t the best strategy for your retirement. However, it is an added measure of flexibility that didn’t exist prior to this year and it could be a blessing if you’re struggling due to the COVID pandemic.
 
The end of 2020 is approaching. It’s been a rollercoaster ride, but there have been some positive developments, especially in the second half of the year. Let’s talk about how to protect what you have and limit your exposure to future risk and uncertainty. Contact us today at Bales Financial Group and let’s start the conversation.
 
1https://www.cnn.com/2020/03/11/investing/bear-market-stocks-recession/index.html
2https://www.google.com/finance/quote/.INX:INDEXSP
3https://www.cnbc.com/2020/10/29/us-gdp-report-third-quarter-2020.html
4https://www.cnn.com/2020/10/28/health/us-coronavirus-wednesday/index.html
5https://www.irs.gov/newsroom/coronavirus-related-relief-for-retirement-plans-and-iras-questions-and-answers
 
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency. 20420 - 2020/9/18

​The recovery in the financial markets hit some turbulence in October, as investors wrestled with anxiety about increasing COVID cases. However, a surge in gross domestic product (GDP) in the third quarter may signal that the economy is on the rebound.1
 
Through October 28, all major indexes had mostly recouped most of their losses from the COVID crash in March. However, all were down for the month of October. Below is each index’s return from October 1 through October 28:
 
S&P 500: -2.73%2
DJIA: -4.54%3
NASDAQ: -1.46%4
 
Here are the year-to-date returns of the major indexes:
 
S&P 500: 0.40%2
DJIA: -8.14%3
NASDAQ: 21.04%4
 
What spooked the markets in October? There are a few factors, but as is the case with most things in 2020, COVID may be the primary factor.

The COVID numbers are surging in the United States, suggesting that the end of the pandemic may be nowhere in sight. On Wednesday, October 28, the seven-day average for new daily cases hit an all-time high of 71,832, an increase of more than 20% in only a week.5
 
Twenty-nine states hit record levels for daily new cases in October. Forty states had an increase of 10% just in the last week of October.6 Thirty-six states had increases of at least 5% in COVID-related hospitalizations in the final week of October.5
 
The surge in cases is leading to a new round of business closures and regulations. Illinois recently stopped indoor dining at bars and restaurants.7 Investors may be spooked by the prospect of a second round of closures and its impact on the economy. A new report from Yelp found that 60% of businesses that were shutdown for COVID will never reopen.8

The uncertainty of a second stimulus may also be a drag on the markets. In fact, Gary Cohn, former president and CEO of Goldman Sachs and former White House National Economic Council Director, says it is a primary factor driving the markets’ poor performance in October.9
 
He added in a recent interview that, “no one thinks we’re going to have stimulus until after the election,” and that, “we know that the markets do not like unpredictability.” He said that there was “100% probability” that stimulus won’t happen until after November 3rd, and possibly not until after the inauguration.9

Some recent data on mutual fund flows may provide insight into how investors feel about the financial markets. Through October 21, equity funds (including mutual funds and ETFs) saw net outflows for 11 consecutive weeks. That means more money flowed out of these funds than flowed into them.10
 
On the other side, taxable fixed-income ETFs have seen four straight weeks of net inflows. That may mean that investors are leaving equities for fixed income securities, even with interest rates near zero.10

On a positive note, GDP surged by 33.1% in the third quarter, beating analyst expectations of 32%. The third quarter number is the largest quarterly GDP gain on record, easily beating the previous high of 16.7% in the third quarter of 1950.11
 
Of course, the third quarter surge comes after a 31.4% decline in GDP in the second quarter. Even with the increase in the third quarter, the economy is still projected to contract by 3.5% in 2020.11
 
The markets and the economy have rebounded, but the future is still uncertain. This may be a good time to explore options that can protect your assets from market volatility. Contact us today at Judy Financial Group. We can help you explore these options and implement a strategy to protect your financial future. Let’s connect today and start the conversation.
 
 
1https://www.cnbc.com/2020/10/29/5-things-to-know-before-the-stock-market-opens-october-29-2020.html
2https://www.google.com/finance/quote/.INX:INDEXSP
3https://www.google.com/finance/quote/.DJI:INDEXDJX
4https://www.google.com/finance/quote/.IXIC:INDEXNASDAQ
5https://www.cnbc.com/2020/10/28/covid-cases-hospitalizations-continue-to-surge-as-us-reaches-critical-point-in-pandemic.html
6https://www.cnn.com/2020/10/28/health/us-coronavirus-wednesday/index.html
7https://www.cnbc.com/2020/10/28/5-things-to-know-before-the-stock-market-opens-october-28-2020.html
8https://nypost.com/2020/09/17/majority-of-covid-19-business-closures-are-permanent-report/
9https://finance.yahoo.com/news/stimulus-donald-trump-gary-cohn-markets-100-percent-probability-deal-wont-pass-before-the-election-214720697.html
10https://lipperalpha.refinitiv.com/2020/10/u-s-weekly-fundflows-insight-report-etf-and-fund-investors-focus-on-fixed-income-during-the-fund-flows-week/
11https://www.cnbc.com/2020/10/29/us-gdp-report-third-quarter-2020.html
 
 
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency. 20420 - 2020/9/18

​It’s the scariest time of the year. Halloween is here. It’s time for trick-or-treaters, haunted houses, spooky home decorations, and more.
 
This may be the scariest time of the year, but it only lasts a month. The truth is there could be gaps in your investment strategy that could come back to haunt you for years or even decades. Below are a few common retirement planning mistakes that can have frightening long-term consequences. If any of these sound familiar, it may be time to meet with a financial professional.

​Asset allocation is an important part of any retirement strategy. Your allocation influences your risk exposure and your potential return. Generally, risk and return go hand-in-hand. Assets that offer greater potential return usually also have higher levels of risk. You can use asset allocation to find the right mix of assets for your goals and risk tolerance.
 
Having the wrong allocation can be problematic. For example, many people have less tolerance for risk as they approach retirement. As you get closer to retirement, you have less time to recover from a loss and thus less tolerance for risk. However, if you don’t adjust your allocation, you could have more risk exposure than is appropriate. A downturn could substantially impact your nest egg.
 
How can you make sure your allocation aligns with your risk tolerance? A consultation with a financial professional is a good first step. They can analyze your risk tolerance and your portfolio and then suggest action that can eliminate gaps and minimize risk.

​Asset allocation is one way to reduce risk, but it’s not the only way. You could also use tools that offer growth potential with limited downside exposure. For example, certain types of annuities offer potential growth with downside protection. You can participate in returns linked to the market without experiencing volatility and risk. Annuities aren’t right for everyone, however. Be sure to talk to a financial professional about whether they make sense for your strategy.

It’s natural to feel stress and anxiety when the market turns downward. Take the first quarter of 2020 for example. When the COVID pandemic began in late February, the S&P 500 declined by 33.93% in a month. You may have felt tempted to sell your investments and move to “safer” assets. However, had you done so, you may have missed out on the market’s bounce back. Since March 23, the S&P 500 has climbed 49.35%.1
 
The problem with impulsive decisions to move to safety is that they can often suppress your returns over time. From 1995 through 2015, the S&P 500 averaged a return of 9.85% per year. Over that same period, the average equity investor averaged a return of only 5.19%.2
 
Why the discrepancy in returns? Investors often make decisions based on emotion rather than a long-term strategy. While those decisions may feel right in the moment, they could lead to lost opportunity as the investor misses out on a market recovery. A financial professional can help you focus on the long-term and avoid decisions that may do more harm than good.

When’s the last time you reviewed your investment strategy with a financial professional? If it’s been a while, now may be the time to do so. A lot can change in a few months or even a year. Your goals and needs may change. Your tolerance for risk could change. Your contributions to your retirement accounts may change. This is especially true during the COVID pandemic, when economic news seems to vary on a monthly basis.
 
Let’s schedule a review today and find the monsters hiding in your investment strategy. Contact us today at Bales Financial Group. We welcome the opportunity to consult with you and help you implement the right strategy for your needs and goals. Let’s connect today and start the conversation.
 
1https://www.google.com/search?q=INDEXSP:.INX&tbm=fin&stick=H4sIAAAAAAAAAONgecRowi3w8sc9YSntSWtOXmNU5eIKzsgvd80rySypFBLnYoOyeKW4uTj1c_UNDM0qi4t5FrHyePq5uEYEB1jpefpFAAAU6wGESAAAAA#scso=_QQBhX8b3K5K-tQbo56XwCw7:0
2https://www.thebalance.com/why-average-investors-earn-below-average-market-returns-2388519
 
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency. 20420 - 2020/9/18

On Wednesday, September 16, Federal Reserve Chairman Jerome Powell offered his assessment of the economic recovery. The press conference offered some positive news, but also a sobering prediction that a full economic recovery will take years.1
 
The good news is that the Fed has cut its 2020 median unemployment rate projection to 7.6%, down from a 9.3% forecast in June. The Fed also adjusted its projected 2020 GDP reduction to 3.7%, down from a 6.5% decline that was projected in June. GDP, which stands for gross domestic product, is a broad measure of economic growth. A decline in GDP means the economy is contracting rather than expanding.1
 
Powell also said that the Fed had shifted its focus to employment growth rather than inflation control. That means the Fed expects to keep interest rates at or near zero until the economy is near maximum employment and inflation is projected to exceed 2%. He added that it will likely take years before the economy has reached those thresholds.1
 
While low interest rates may be good for borrowers and investors, Powell’s comments indicate that the Fed believes the economy is years away from a full recovery. He indicated that unemployment is still four times higher than the pre-pandemic level.1
 
“That just tells you that the labor market has improved, but it’s a long way from maximum employment,” Powell said.1

The investment markets continue their recovery from the downturn that hit in March of this year. Through September 16, the indexes have the following year-to-date returns:
 
S&P 500: 3.39%2
DJIA: -2.90%3
NASDAQ: 20.19%4
 
While the markets have mostly recovered from their losses earlier in the year, volatility can strike at any time. That’s especially true should the COVID pandemic worsen or if the economy suffers continued damage. There also may be increasing uncertainty as the election approaches.
 
If you're concerned about risk, let’s talk about it. There are a wide range of strategies and tools we can implement to minimize risk and protect your retirement income  . Let’s connect today and discuss your needs, goals and concerns. At Bales Financial Group, we welcome the opportunity to help you implement a strategy based on your objectives.
 
 
1https://www.cnn.com/2020/09/16/economy/federal-reserve-september-meeting/index.html
2https://www.google.com/search?q=INDEXSP:.INX&tbm=fin&stick=H4sIAAAAAAAAAONgecRowi3w8sc9YSntSWtOXmNU5eIKzsgvd80rySypFBLnYoOyeKW4uTj1c_UNDM0qi4t5FrHyePq5uEYEB1jpefpFAAAU6wGESAAAAA#scso=_nHNjX8_WMNLKtQbPmoKICQ7:0,_BHtjX7uKPNqttQbohYywCQ7:0
3https://www.google.com/search?q=INDEXDJX:.DJI&tbm=fin&stick=H4sIAAAAAAAAAONgecRozC3w8sc9YSmtSWtOXmNU4eIKzsgvd80rySypFBLjYoOyeKS4uDj0c_UNkgsry3kWsfJ6-rm4Rrh4RVjpuXh5AgAzsV5OSAAAAA#scso=_hH9jX4eyE5m1tAbHirPABA7:0
https://www.google.com/search?q=INDEXNASDAQ:.IXIC&tbm=fin&stick=H4sIAAAAAAAAAONgecRoyi3w8sc9YSmdSWtOXmNU4-IKzsgvd80rySypFJLgYoOy-KR4uLj0c_UNjCxMjYtyeBaxCnr6ubhG-DkGuzgGWul5Rng6AwDeg85uTgAAAA#scso=_139jX-TyCIy3tAbe4bnYBg7:0
 
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency. 20415 - 2020/9/17

The first half of 2020 has been a rollercoaster ride. The COVID-19 pandemic completely altered our way of life and threw the economy into a tailspin. Most states have started the reopening process, but there is still significant uncertainty about the long-term impact of coronavirus and how long the pandemic will continue.
 
Federal Reserve Chairman Jerome Powell recently said the economy faces a “long road” to recovery, and predicted the process may take through 2022.1 While the recovery may be a long-term journey, there have been some signs of hope in recent months:

The stock market had been enjoying the longest bull market in history before the coronavirus pandemic hit.2 The bull market came to an abrupt end starting in late February. On February 20, the S&P hit a high of 3373. From that point through March 23, the S&P fell to 2237, a decline of 33.7%.3
 
However, since that time, the market has increased to 3115 through June 18. That’s an increase of 39.25%. The S&P is nearly back to its pre-COVID levels.3
 
Of course, it’s impossible to predict the future direction of the markets. Just because the market has been on an upswing doesn’t mean it will continue. A spike in cases or a second round of shutdowns could send the markets back into a decline.

The pandemic has driven unemployment to record-high levels. Through mid-June, the country had 13 consecutive weeks with more than 1 million new jobless claims. Prior to the coronavirus pandemic, the record for a single week was 695,000 in May 1982.4
 
The good news is that jobless claims have been declining. At the beginning of the pandemic, weekly jobless claims exceeded 6 million. In fact, up until late-May, they exceeded 2 million. So while jobless claims remain at record highs, they are on the decline. The amount of continuing claims has also dropped from 25 million in early May to just over 20 million in early June.4

Consumer spending was impacted significantly by the COVID-19 pandemic. That’s not surprising, given most states were effectively shut down for two months. In April, consumer spending dropped by 16.4%, a record monthly decline.5
 
In May, consumer spending set another record—this time for biggest monthly increase. The figure rose by 17.7%, driven by large increases in clothing (188%), furniture (+90%), sporting goods (+88%), and electronics (+55).5
 
Consumer spending by itself doesn’t mean the economy is on the path to recovery. There are still plenty of uncertainties in the economy. However, it is a good sign that consumer spending is nearly back to its pre-pandemic levels.
 
This is uncharted territory for all of us. The situation and data changes so fast that it’s impossible to project where the economy may be headed. A comprehensive strategy that aligns with your goals and risk-tolerance can keep you on track to meet your long-term objectives.
 
Let’s connect today and talk about your concerns, questions and challenges. At Bales Financial Group, we can help you develop and implement a strategy. Contact us today and let’s start the conversation.
 
 
1https://www.marketwatch.com/story/fed-sees-rates-near-zero-through-2022-says-asset-purchases-will-continue-2020-06-10
2https://www.cnn.com/2020/03/11/investing/bear-market-stocks-recession/index.html
3https://www.google.com/search?q=INDEXSP:.INX&tbm=fin&stick=H4sIAAAAAAAAAONgecRowi3w8sc9YSntSWtOXmNU5eIKzsgvd80rySypFBLnYoOyeKW4uTj1c_UNDM0qi4t5FrHyePq5uEYEB1jpefpFAAAU6wGESAAAAA#scso=_hL3sXpOQHsnWtAal04OQCA1:0
4https://www.cnbc.com/2020/06/18/weekly-jobless-claims.html
5https://finance.yahoo.com/news/consumer-spending-comes-back-with-a-vengeance-in-may-morning-brief-100600715.html
 
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency. 20195 - 2020/6/22

​It’s hard to find good news in today’s economic environment. COVID-19 single-handedly brought an end to the longest bull market in history and ushered in record-setting unemployment.
 
If you’re like millions of others in the country, you’ve lost income or possibly even your job. You also may have lost savings due to market volatility. Given that the coronavirus pandemic is still ongoing, there’s no telling how the economy or the financial markets may respond through the rest of the year.
 
Even in down years, there are still opportunities to improve your financial future. Below are three such moves to consider in your strategy:

In 2020, you can contribute up to $6,000 to a Roth IRA, or up to $7,000 if you are 50 or older.1 A Roth can be helpful because you can take tax-free withdrawals from it after age 59 ½, assuming you’ve held the account for at least five years.
 
Not everyone can use a Roth. If you’re a married couple making more than $206,000 or a single person making more than $139,000, you can’t contribute to a Roth IRA.2  However, if a pay cut has pushed you below the income limits, you could use this time to open a Roth.

​Another option is a Roth conversion. This is a process that converts a traditional IRA into a Roth. You pay taxes on your IRA balance and then the net amount is deposited into a new Roth IRA. You face a current tax liability, but you get potentially tax-free income in retirement.
 
It may make sense to do a Roth conversion during a down year, when your income is reduced. You may be in a lower tax bracket and will thus face a lower tax bill on the conversion. A financial professional can help you explore this option.

Dollar-cost averaging is a strategy that can be helpful at all times, but especially during volatile periods. You contribute the same amount of money at regular intervals, like once per month. That money is then invested in a predetermined strategy.
 
The benefit of this is that you buy more shares when prices are low and fewer shares when prices are high. This reduces your overall cost, which increases your potential for growth. Again, a financial professional can help you implement a dollar-cost averaging strategy.
 
We can help you determine the right strategy in this volatile time. Contact us today at Bales Financial Group, so we can help you develop a plan. Let’s connect soon and start the conversation.
 
 
1https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-ira-contribution-limits#:~:text=For%202020%2C%20your%20total%20contributions,less%20than%20this%20dollar%20limit.
2https://www.irs.gov/retirement-plans/plan-participant-employee/amount-of-roth-ira-contributions-that-you-can-make-for-2020
 
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency. 20199 - 2020/6/22

Are you one of the millions who has lost their job during the COVID pandemic? More than 36 million Americans have filed for unemployment since the beginning of March. That, by far, is the largest surge in unemployment in the country’s history.1 The more than 20 million lost jobs in April were the single-largest monthly total since the country began tracking the statistic in 1939.2
 
Losing a job is always difficult, but it may be even more trying during this time. There’s so much uncertainty in the world right now. Many companies don’t know what the future holds or how their business may be impacted. The financial fallout from the pandemic could last for an extended period of time, making it difficult to restart your career or find a new position.
 
The good news is there are steps you can take to regain control of the situation. Below are a few tips to consider:

Your 401(k) at your former employer may be one of your biggest retirement assets. After you leave your employer you have a few options on what to do with it. First, you can cash it out and take a distribution. However, as mentioned above, that may not be the wisest course of action.
 
Another option is to roll your 401(k) into an individual retirement account (IRA). Very often, an IRA will offer a larger selection of investment options than a 401(k) plan, so you can implement the right strategy for your needs. You can also transfer outside IRAs to one location to consolidate your savings. That could help you develop a cohesive strategy across all your investments.
 
My team and I are happy to help you with this process. We assist individuals just like you who are in the middle of a career transition but want to take control of their financial future.

​Resist the urge to panic. This is a good time to take a deep breath and assess your situation. Anxiety and fear often come from uncertainty. However, if you can gain some insight into your situation and your financial stability, you may find that things aren’t as bad as they seem.
 
Start by making a list of your expenses. Look for opportunities to cut spending on non-essential items. Also, consider contacting your lenders to see if you can get a deferral or temporary forbearance on payments. Many mortgage lenders are allowing borrowers to suspend payments for a few months if they have been impacted by COVID. A pause on large bills could give you some breathing room.

Try to drill down an estimated amount you need to live each month. Once you have that number, you can start exploring ways to bridge the gap.

You may be tempted to withdraw your retirement savings. The IRS has made it easier than ever to do so, especially if you’re under age 59 ½. As part of the recent CARES Act, you can now withdraw up to $100,000 of 401(k) and IRA funds without paying the 10% early distribution penalty if you have been impacted by COVID.6
 
There are some reasons why you should think twice before doing this. One is that you still have to pay income taxes on the distribution. It may be penalty-free, but it’s not tax-free. Also, you will lose your ability to grow that money in the future, which could limit that amount you accumulate for retirement. You’re essentially taking money from your future self to cover today’s expenses.

Assuming you’re eligible, your state’s unemployment office should be one of your first phone calls. It’s important to file as soon as you possibly can. Many unemployment offices are overwhelmed by the volume of applicants, so they’re not processing claims quickly. In fact, one study found that 44% of applicants still haven’t received their benefits.3
 
If possible, consider filing online. If that’s not an option, be prepared to wait on the phone to file your claim. Many states have expanded their hours, so think about calling at a time that may not be popular, like first thing in the morning or on the weekend to get faster service. In Ohio, for example, residents have found that the wait time on the weekend is less than half of the wait time on weekdays.4

​A strong network is always an asset when you’re looking for a job. Use this time to reconnect with old friends and colleagues. You may find that many of them are in the same position. Or you may discover your next position. Social media platforms like LinkedIn and even Facebook make it easy to send a quick message and reconnect.

​At this point in your career, you probably don’t want to take an hourly job. However, that may be the best option to maintain yourself financially. There are businesses that are hiring right now. It may not be the type of work that you prefer, but it could help you cover your expenses until you find the type of job better fits your skill set. You could also look into flexible gigs, like delivery services or driving for a ride sharing service.
 
Of course, be sure to check out part-time work may affect your unemployment. If the work would limit your ability to collect benefits, you may want to reconsider.

Mental health is always an important issue, but it may be worsened by this pandemic. In a recent study, 40% of Americans said the coronavirus pandemic had negatively impacted their mental health.5
 
Focus on your health and wellbeing so you can come through this stronger than ever. You may want to find something to provide some direction and purpose in your day. Perhaps pick up a hobby or volunteer. You could further your skills by taking a course online. Keep moving forward so you’re ready to jump in with both feet when your next opportunity presents itself.
 
We know this is a difficult time. We’re here to help you explore all your options and make the best decision for your needs. Let’s connect today and start the conversation. Contact us at Bales Financial Group. You can schedule a virtual or in-person meeting here.
 
 
1https://www.cnbc.com/2020/05/15/44percent-of-us-unemployment-applicants-have-been-denied-or-are-waiting.html
2https://www.cnn.com/2020/05/08/economy/april-jobs-report-2020-coronavirus/index.html
3https://www.cnbc.com/2020/05/15/44percent-of-us-unemployment-applicants-have-been-denied-or-are-waiting.html
4https://www.wcpo.com/rebound/stuck-on-hold-with-unemployment-heres-tips-and-tricks-from-people-who-are-right-there-with-you
5https://thehill.com/policy/healthcare/500217-us-ill-prepared-for-coronavirus-fueled-mental-health-crisis
6https://www.irs.gov/newsroom/coronavirus-related-relief-for-retirement-plans-and-iras-questions-and-answers
 
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency. 20131 - 2020/6/3

The stock market crash of 1987. The tech bubble in the early-2000s. The financial crisis of 2008. And now, the coronavirus pandemic.
 
What do all of these things have in common? They all involve sharp market downturns that end a bull market and trigger a bear market. For many investors, these events create anxiety and worry about the long-term ramifications.

These events all share something else in common. They offer potential opportunities.

In a difficult time like this, it can be hard to see opportunities, but they do exist. Of course, not all opportunities are right for everyone. Your strategy and decisions should be based on your specific needs, goals, and risks.

However, it’s possible that you could take action today to improve your financial future. Below are three examples of potential opportunities. A financial professional can help you determine the right course of action for your long-term strategy.

Tax-Loss Harvesting

If you have seen your portfolio suffer since late February, you are not alone. As recently as early February, we were still enjoying a strong economy. Between Friday, February 21, and Tuesday, March 16, the Dow Jones Industrial Average (DJIA) dropped by 35.87%. Since that low point, the market has recovered somewhat. However, the DJIA is still down 16.4% year-to-date.¹ 

If you are considering a change in strategy, you also may be able to take advantage of a potential tax deduction. A change in allocation may require you to sell assets that have declined in value. While realizing a loss is never a good outcome, you could qualify for a tax-loss deduction.

Of course, this doesn’t mean you should realize losses simply for the tax deduction. Your decision should be guided by your long-term goals. A financial professional can help you determine how best to move forward.

Roth IRA Conversion

Do you hold a significant amount of retirement assets in a traditional IRA? One of the benefits of a traditional IRA is that you realize an upfront deduction for contributions. However, that also means that your future distributions are taxable as income.
 
You may prefer to use a Roth IRA, which allows you to take tax-free withdrawals in retirement, assuming you are 59 ½ or older, and the account is at least five years old. You can convert your traditional IRA into a Roth, and now could be the time to do so.
 
When you convert a traditional IRA to a Roth, you pay income taxes on the converted amount. If you have seen a decline in your IRA over the past couple of months, you now have a reduced balance. That means the tax exposure from conversion would be lower today than it was two months ago.
 
It’s also possible that, like millions of Americans, you have been laid off, furloughed, or that you have accepted a pay cut. It’s possible that your income for 2020 will be lower than it has been in years past, which means you may be in a lower tax rate. Again, this could reduce your tax exposure in a Roth conversion.

Roth conversions aren’t right for everyone. However, if you have been considering one, this may be the right time.

Investing at Discounted Prices

It’s never a good idea to try and predict the market’s direction, especially in the short-term. Investment decisions should always be guided by long-term strategy and specific goals and needs.
​
However, there is no denying the fact that many assets are currently trading at prices substantially reduced from two months ago. If you have cash available to invest and have the risk tolerance to withstand potential volatility, this could be a good time to revisit your strategy.
It’s always wise to hold six to twelve months in liquid, risk-free emergency reserves, even if those accounts pay very little in interest. However, if you have other funds that aren’t needed for emergency reserves, you may want to consider how best to use them in the long-term. Investing at discounted prices may allow you to more fully participate in a future recovery.

As always, your decisions should be based on your unique needs, not generalized advice. Let’s talk about it and implement the right strategy for your goals. Contact us today at Bales Financial Group. You can schedule a virtual or in-person meeting here.


What is your retirement outlook for 2020? Fill out this form here. We can help you analyze your needs and goals and find the right opportunities. Let’s connect soon and start the conversation.



1https://www.google.com/search?safe=off&tbm=fin&sxsrf=ALeKk006ktaTHRuJ1MB-WYLuWkeqF7PpWw:1588177817109&q=INDEXSP:+.INX&stick=H4sIAAAAAAAAAONgecRowi3w8sc9YSntSWtOXmNU5eIKzsgvd80rySypFBLnYoOyeKW4uTj1c_UNDM0qi4t5FrHyevq5uEYEB1gp6Hn6RQAAItD1MEkAAAA&sa=X&ved=2ahUKEwjPyP-0h47pAhXIWM0KHR3mBUQQlq4CMAB6BAgBEAE&biw=1536&bih=754&dpr=1.25#scso=_N6ypXpKOEYu2tAbp-I-oAQ1:0
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency. 20050 - 2020/4/29

Are you one of the more than 58 million Americans who use a 401(k) plan to save for retirement? As of the end of 2019, 401(k) plans held more than $6.2 trillion, which accounts for nearly 20% of all retirement assets in the United States.1
 
A 401(k) can be an effective savings vehicle for a few reasons. First, all growth is tax deferred. You don’t pay taxes on your gains until you start taking distributions from the account. You also may receive employer contributions, which could significantly increase your savings.
 
While a 401(k) can be an effective savings vehicle, you may need other options in your strategy. In 2020, you can contribute up to $19,500 to a 401(k). That number is increased to $26,000 if you’re age 50 or older.2 If you hit the contribution limit and still want to contribute more money for retirement, you may need to find another vehicle to do so.
 
Below are three savings vehicles that could be good options if you hit the max on your 401(k) this year:
​
Individual Retirement Accounts (IRA) 

In addition to your 401(k), you can also contribute up to $6,000 to an IRA in 2020. If you are 50 or older, you can contribute an additional $1,000 to an IRA, bringing your total potential contribution to $7,000.3.
 
There are a few different types of IRAs, but the two most popular are the traditional and the Roth. In a traditional IRA, you make upfront contributions that are potentially tax-deductible. Your assets can then grow on a tax-deferred basis, just as they would in a 401(k). All future withdrawals are taxed as income.
 
In a Roth, your contributions aren’t deductible, but your withdrawals in the future are potentially tax-free. Unfortunately, not everyone can contribute to a Roth IRA. If you are single and your income is more than $139,000 or a joint-filing couple with income of more than $206,000, you cannot contribute to a Roth IRA.3
 
A financial professional can help you determine which type of IRA is right for you.
 
Brokerage Account 

Another option is to simply open a taxable brokerage account. With these, you don’t get tax-deferred growth, deductible contributions, or any of the other tax benefits you might find with an IRA or a 401(k).
 
However, you do get a great deal of flexibility. In most qualified accounts, you can’t take a withdrawal before age 59 ½ without facing an early-distribution penalty. That’s not the case with a brokerage account. You can take withdrawals anytime you like, which could come in handy if you’re forced to retire early or have a costly emergency.
 
Again, a financial professional can help you determine if this is the right path for you and help you implement an investment strategy.

Insurance-Based Vehicles 

Insurance may not be the first thing that comes to mind when you think about saving for retirement. However, there are insurance-based vehicles that can make effective retirement savings tools.
 
Annuities are insurance-based products that allow you the opportunity for growth while also benefiting from some risk-protection features. Some annuities offer guaranteed* minimum values, so you won’t lose money due to market declines. Others offer guarantees* of future income, so you can protect your cash flow in retirement.
 
Ready to compliment your 401(k) with other savings vehicles? Let’s talk about it. Contact us today at Bales Financial Group. You can schedule a virtual or in-person meeting here.

What is your retirement outlook for 2020? Fill out this form here. We can help you develop and implement a strategy. Let’s connect soon and start the conversation.

 
1https://www.ici.org/faqs/faq/401k/faqs_401k
2https://www.irs.gov/newsroom/401k-contribution-limit-increases-to-19500-for-2020-catch-up-limit-rises-to-6500
3https://www.irs.gov/newsroom/401k-contribution-limit-increases-to-19500-for-2020-catch-up-limit-rises-to-6500
 
*Guarantees provided by annuities are subject to the financial strength of the issuing insurance company; not guaranteed by any bank or the FDIC. Guaranteed lifetime income available through annuitization or the purchase of an optional lifetime income rider, a benefit for which an annual premium is charged.   The information contained herein is based on our understanding of current tax law. The tax and legislative information may be subject to change and different interpretations. We recommend that you seek professional legal advice for applicability to your personal situation.
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency. 20040 - 2020/4/28

​The coronavirus pandemic has launched the country, and the world, into uncharted territory. In much of the world, society is essentially shut down. Schools and large events are closed. People are staying in their homes. Businesses have effectively closed across the country.
 
The economy has felt the impact of the pandemic. Stocks have declined significantly, and unemployment has surged. On March 3, the Federal Reserve took action by cutting the fed funds rate to 0%. The Fed expects to maintain this rate until “it is confident that the economy has weathered recent events.”1
 
Given the unpredictability of the current pandemic, it’s hard to say how long rates might be at zero or how the economy may change in the future. However, changes to the fed’s benchmark rate often have ripple effects throughout the economy. Below are some things you may want to consider as we navigate a zero-rate environment for the near future:
 
Debt 

Many common types of debt are tied to the prime rate. For instance, if you have a credit card with a variable interest rate, it could fall soon. If so, this may be a good time to get that balance paid off. You also may see lower rates on things like car loans and mortgages. This could be a good time to rate shop, especially if you have good credit. Even if you don’t want to transfer a credit card balance or refinance a home, the prospect of doing so could be enough to convince your lender to reduce your rate.
 
Student loan rates could also be impacted. Rates for new federal student loans are adjusted every year. The rate for 2019-20 is already set, but the rate for next year could drop significantly if rates stay low for some time. Private student loan rates could be fixed or variable. It depends on the terms of your loan agreement.

Savings 

Savers have unfortunately been used to low-interest rates for some time. Interest rates on savings accounts had started to climb, but after the Fed’s cut, the average FDIC rate is now down to 0.09%. While CDs may offer higher rates, they also come with less liquidity.
 
It’s always advisable to have liquid savings available to cover emergencies and unexpected costs. However, it may be difficult to find interest-bearing accounts for those savings at this time. We can help you explore all your options and develop a liquidity strategy that’s right for your needs and goals.

Investments 

There’s a misconception that a Federal Reserve rate cut always leads to gains in the stock market. One need looks no further than the most recent cut to see that it’s not true. When the Fed cut rates on March 3, the Dow Jones Industrial Average fell nearly 800 points.2
 
These are unprecedented times and it’s impossible to predict when the pandemic will end or how it will fully impact investors. While interest rates are a factor, there are many others to consider. Your retirement income strategy should be based on your unique needs and goals.
 
Now could be the right time to review your strategy and make adjustments. A change in allocation could be appropriate. You also may want to take advantage of financial vehicles that limit your exposure to risk. A financial professional can help you find the right strategy for your needs.
 
Ready to review your retirement income strategy? Let’s talk about it. Contact us today at Bales Financial Group. We can set up a virtual consultation, so you don’t have to leave the comfort and safety of your home. Let’s connect today and start the conversation.
 
1https://www.usatoday.com/story/money/2020/03/03/coronavirus-dow-jones-stocks-react-after-fed-cuts-interest-rates/4938447002/
2https://www.usatoday.com/story/money/2020/03/03/coronavirus-dow-jones-stocks-react-after-fed-cuts-interest-rates/4938447002/
 
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency. 19959 - 2020/3/31