Welcome to 2020! We hope that you and your family had an enjoyable holiday season. Each New Year symbolically offers the opportunity to make a fresh start for everyone.
Once again, our primary goal this year is to continue our tradition of helping clients work toward achieving their personal financial goals. To make that process more efficient, we send our clients the attached convenient 2020 CHECKLIST so they can identify any items they anticipate needing our help with this year.
We take pride in our ability to understand and effectively respond to our clients’ needs and concerns and enjoy providing timely information and holistic service to our clients. One of our company’s main objectives is to always offer our clients a first-class experience.
We are always available to provide the proper attention that our clients and their finances deserve by offering a strong and frequent line of service, commitment and communication.
We would like the opportunity to help you in 2020. After reviewing the checklist, if you see any items you’d like to discuss or receive a second opinion, we would like to extend to you a complimentary financial check-up. We would appreciate the opportunity to review your tax plan, estate plan, investment plan, retirement plan and protection plan to make sure they are all coordinated in your best interest.
Looking Ahead to 2020
2019 was another strong year for investors, but the daily headlines kept investors on the edge of their seats. Trade wars, recession fears, geopolitical unrest, interest rate concerns and U.S political division all kept us wondering how each one would affect equity markets. The year also included its share of volatility in the U.S. equity markets which left many investors nervous. Despite a backdrop of concern, during the year, many indexes continued to set new highs. For 2020, investors should consider the mantra of “proceed with caution.”
In our second year of The Tax Cuts and Jobs Act, taxpayers are still adjusting to new tax forms. The direction of interest rates, stock market volatility, a Presidential election and the continuation of potential trade wars could provide disruption for investors in 2020. Having a solid foundation, design and strategy is critical to the outcome of your financial plans. Keeping your plan up to date is always wise and will be especially integral. We are staying updated on the issues that may affect your personal situation. Our prime mission is to provide our clients with guidance and support on the road to their financial goals.
This is a good time to review and discuss your plans with us. We can help you determine if you’re still on track to meet your long-term objectives, confirm your time horizons and your risk tolerance. If you have any questions or concerns, please call our offices and we’d be happy to assist you.
Specific Areas to Watch in 2020
Interest Rate Changes
In 2019, the Fed lowered interest rates for the first time in a decade. In July, September and October, the Federal Reserve lowered its key interest rate by 0.25% (0.75% total). Fed Chair Powell, said that the October decision to lower rates was intended to, “provide some insurance against ongoing risks.” At the December 2019 meeting, the Fed signaled that it was likely to hold rates steady in 2020. Low interest rates can make equities look attractive for investors seeking returns. For 2020, we will continue to keep a close eye on interest rate changes.
Trade War Fears
In December, China and the U.S. agreed to work towards a trade agreement. The uncertainty around the trade relationship between the U.S. and China has dampened global growth, according to Paul Gruenwald, Chief Economist at S&P Global Ratings. This trade war, which has lasted for almost two years, has weighed heavily on global economic growth, according to the International Monetary Fund. Analysts worry that tariffs could result in higher prices on goods and therefore affect consumer spending, which accounts for about two-thirds of the U.S. economy. In 2020, investors need to stay watchful on U.S. and China trade negotiations.
Stock Market Valuations
Analysts theorize that valuations are one of the key predictors of equity returns. For the last decade, equities have climbed higher. Investors who need access to their money in the next 10 years should understand that current valuations could lead to a period of lower returns and therefore need to plan accordingly. Risk is a part of investing and investors need to balance current conditions with their personal tolerance for risk. Although equity prices can continue to rise, we must understand that its near impossible to accurately predict short term moves and we need to continue to carefully monitor equity markets.
Your Personal Situation
Your personal situation is our highest concern. We make it a priority to keep our clients informed throughout the year. If you’d like to schedule a complimentary consultation, please call our office and we will be glad to schedule time with you. Please keep in mind that each individual or household situation is different and we want to help you with your personal financial goals in 2020. Contact us
Here is a checklist of events and information that can help us advise you in 2020.
Please help us identify which items you would like us to address with you this year.
Do you anticipate changes to your investment goals?
Has your risk tolerance changed?
Have your 2020 income or savings needs changed?
Do you plan on retiring or changing jobs?
Will there be a change in your marital status?
Do you plan on moving, refinancing or selling/transferring a major asset such as a home or business?
Did you recently receive or anticipate receiving a gift or inheritance?
Will you have any changes in your income needs +/- (i.e. vacation, assisted living needs, selling home, child/grandchild assistance)?
Do you expect any additional family members or dependents?
Do you anticipate any additional dependents such as an elderly parent or other family member? Will they require assisted living?
Do you have a child/grandchild you will be assisting with their educational cost needs through a 529 plan?
Do you anticipate any major transfer of wealth?
Do you plan on gifting to heirs or donating money to charity?
Do you need to adjust your estate plan?
Do you maximize your ability to use retirement plans?
Do you want to explore converting a traditional IRA to a Roth IRA?
Do you or a dependent family member have a severe illness?
Do you anticipate any life, financial, or employment (retiring) changes that may require you to make adjustments to your life and health insurance policies?
Did you contribute to an IRA? If not, would you like to discuss contributing to an IRA before April’s tax deadline?
Is there anything else we should know to help you plan for 2020?
50 — Allows for catch-up contributions to IRAs and qualified retirements plans.
55 — If you are retired, allows you to take distributions from your 401(k) without the 10% penalty
59½ — Allows you to take distributions from an IRA, annuity, or other retirement plan without penalty
60 — Allows for start of widow/ widower benefits from Social Security
62 — Allows for starting early Social Security benefits
65 — Allows for enrollment in Medicare and the government drug plan
65-67 — Allows for full retirement benefits from Social Security
70 — Start date for enhanced Social Security benefits if you deferred claiming benefits previously.
72 — Mandatory required minimum distribution from retirement accounts must be taken no later than April 1st of the year after the year you turn 72.
If you have an important birthday in 2020, please let us know!
Registered Representative offering securities and advisory services through Independent Financial Group, LLC (IFG), a registered broker dealer and a registered investment adviser. Member FINRA/SIPC. Financial 1 Wealth Management Group and IFG are unaffiliated entities. The views expressed are not necessarily the opinion of Independent Financial Group and should not be construed, directly or indirectly, as an offer to buy or sell securities mentioned herein. All indexes are unmanaged and cannot be invested into directly. Unmanaged index returns do not reflect fees, expenses, or sales charges. Index performance is not indicative of the performance of any investment. This article is for informational purposes only. Economic forecasts set forth may not develop as predicted and there can be no guarantee that strategies promoted will be successful. This information is not intended to be a substitute for specific individualized tax, legal or investment planning advice as individual situations will vary. For specific advice about your situation, please consult with a lawyer or financial professional. Past performance is no guarantee of future results. Sources: cnbc.com/2019/11/25. The information in this article provided by The Academy of Preferred Financial Advisors, Inc.