Your Financial Future

The Coronavirus Pandemic has created many challenges. We went from the lowest unemployment rate in fifty years to the highest in a matter of weeks. Many people did not have enough emergency funds available to hold them over until they received stimulus checks or unemployment benefits. Today, we are going to discuss some opportunities that are available for those who want to put their families in a better financial position after the pandemic ends.

Reviewing your budget would be a good place to start. Maybe you had gym memberships, subscription services or other monthly expenses that you have not been using. Evaluate whether you are getting your money’s worth out of them. Many people spend a lot on cable television or cell phones. Is there less expensive option available?

Reducing these costs may allow you to build up some emergency funds. Most financial advisors suggest at least six months’ worth of living expenses. It is a good time to look at your debt obligations. If you have a good credit rating, interest rates are at record lows. Refinancing may loosen some cash flow.

If you have good work skills, it might be a good time to find a new job after the pandemic ends. There has been a lot of disruption in the job market. You might be able to find a job with higher income or more advancement options.

It is a good time to review your future tax obligations. We already had a large US budget deficit and the Trump tax cut was due to expire on January 1, 2026. All of the government spending to deal with the health crisis are sure to make a tax increase more likely. Depending on what happens in Washington this November, things could happen sooner. It might make sense to consider a Roth conversion. Account values have been reduced because of the market crash and tax rates will probably never be lower. If you believe the stock market is going to recover, why not make the growth non-taxable?

It is a good time to review your asset allocation. Be sure you do so with a tax perspective. This can make a big difference in your tax liability. Many people were taking too much stock market risk. Maybe you should create some indestructible income? Your pay checks would arrive no matter what is happening in the stock market.

If you are considering retiring sooner than you expected, make smart choices concerning Social Security. These decisions can affect you and your spouse for decades to come. Hundreds of thousands of dollars could be at stake.

It might be a good time to review your estate plans. Many people put off creating these plans because death is not fun to consider. The pandemic shows us how things sometimes happen much sooner than we imagined. Also some people put in their health care directives that they did not want to go on a respirator. We saw some people during the Covid-19 outbreak survive by being put on one.

Create a holistic written financial plan. It needs to be updated for the new laws, the SECURE Act and the CARES Act. Take advantage of the opportunities that are available during these trying times.

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