# Envision > Financial Planning Site: https://envisionfinplan.com ## Pages - [Articles](https://envisionfinplan.com/articles/) - [Home](https://envisionfinplan.com/) ## Recent Posts - [Roth vs. Traditional IRA: Which is Better for Me?](https://envisionfinplan.com/roth-vs-traditional-ira-which-is-better-for-me/) - [The Economic Impact of Pandemics](https://envisionfinplan.com/the-economic-impact-of-pandemics/) - [COVID-19: You Can Now Take $100,000 From Your 401(k) or IRA, but Should You?](https://envisionfinplan.com/covid-19-you-can-now-take-100000-from-your-401k-or-ira-but-should-you/) - [Stimulus Checks Are Coming for Americans: Here's What You Need to Know](https://envisionfinplan.com/stimulus-checks-are-coming-for-americans-heres-what-you-need-to-know/) - [Mortgage Refinancing: How the Market Downturn Has Provided an Interesting Opportunity](https://envisionfinplan.com/mortgage-refinancing-how-the-market-downturn-has-provided-an-interesting-opportunity/) - [A Guide to Managing Your Money During the COVID-19 Pandemic](https://envisionfinplan.com/a-guide-to-managing-your-money-during-the-covid-19-pandemic/) - [Staying Strong: 8 Ways to Manage Your Mental Health During a Quarantine](https://envisionfinplan.com/staying-strong-8-ways-to-manage-your-mental-health-during-a-quarantine/) - [Thinking of Investing During the Market Downturn? Make These 5 Considerations First](https://envisionfinplan.com/thinking-of-investing-during-the-market-downturn-make-these-5-considerations-first/) - [An Overview of the Newly Passed $484 Billion COVID-19 Relief Package](https://envisionfinplan.com/an-overview-of-the-newly-passed-484-billion-covid-19-relief-package/) - [Economic Impact of COVID-19: 3 Next Steps For Those Struggling Financially](https://envisionfinplan.com/economic-impact-of-covid-19-3-next-steps-for-those-struggling-financially/) - [Should You Take Social Security Early in Light of a COVID-19 Related Layoff?](https://envisionfinplan.com/should-you-take-social-security-early-in-light-of-a-covid-19-related-layoff/) - [Top Cyber Security Tips to Utilize While Working From Home](https://envisionfinplan.com/top-cyber-security-tips-to-utilize-while-working-from-home/) - [Investments Keeping You Up at Night? Managing Stress During Market Volatility](https://envisionfinplan.com/investments-keeping-you-up-at-night-managing-stress-during-market-volatility/) - [4 Areas of Your Estate Plan to Review in Light of COVID-19](https://envisionfinplan.com/4-areas-of-your-estate-plan-to-review-in-light-of-covid-19/) - [How Could the Behavior Gap Affect Your Investments During This Time of Market Volatility?](https://envisionfinplan.com/how-could-the-behavior-gap-affect-your-investments-during-this-time-of-market-volatility/) - [Fall 2020: The Uncertainty Surrounding College Enrollment](https://envisionfinplan.com/fall-2020-the-uncertainty-surrounding-college-enrollment/) - [Roth Conversions: What You Need to Know](https://envisionfinplan.com/roth-conversions-what-you-need-to-know/) - [Dollar-Cost Averaging (DCA): What Is This Investment Strategy and Should You Use It?](https://envisionfinplan.com/dollar-cost-averaging-dca-what-is-this-investment-strategy-and-should-you-use-it/) - [The Stock Market and the Economy Are Not the Same: A Guide to Understanding the Difference](https://envisionfinplan.com/the-stock-market-and-the-economy-are-not-the-same-a-guide-to-understanding-the-difference/) - [The Pros & Cons of a Do-It-Yourself Will](https://envisionfinplan.com/the-pros-cons-of-a-do-it-yourself-will/) --- Generated by GrowRanko AI Search Optimizer (https://wordpress.org/plugins/growranko-ai-search-optimizer/) ## Full Content ### Roth vs. Traditional IRA: Which is Better for Me? Whether you’re a new college graduate or an established professional, it’s never too early to start saving for your retirement. As one might expect, the longer you live, the more resources you’ll need to sustain your lifestyle, so it’s always a good idea to start saving sooner rather than later. When saving money for your retirement, there are two common types of individual retirement accounts (IRA) that you can invest in: a Roth IRA and a traditional IRA. When reviewing some of their key differences, it’s important to ask yourself: “When is the most advantageous time to pay tax on my income?”  Key Differences Between a Roth IRA and a Traditional IRA You may think the term “Roth” is an acronym for a complex financial term, but that’s surprisingly not the case. The origin of “Roth” derived from a person, William Roth, who was a Delaware senator when the Roth IRA was established by the Taxpayer Relief Act in 1997. When beginning the decision-making process, it’s important to determine how you prefer your contributions to be made. Never deductible, the contributions you make to your Roth IRA use after-tax dollars, which in turn affects the amount of investment income you will make.  In regard to a Roth IRA’s tax implications, consider whether or not your tax rate during your retirement will be higher or lower than the current amount of taxes you’re paying each year. With a Roth IRA, you’re able to pay taxes sooner rather than later when compared to a traditional IRA, and you’ll receive distributions that are free of taxes once your income tax rate reaches a certain percentage.1 If you’re concerned about when you’ll be able to take money out of your individual retirement account, there are rules for required minimum distributions (RMD) that Roth IRAs are not subject to. This may make the Roth IRA more appealing to those who do not want to be required to distribute their retirement assets before they’re ready. However, not everyone is able to fund a Roth IRA. Depending on your income, a traditional IRA may be more suitable. Weighing Your Options While Roth IRAs and traditional IRAs share similarities, such as being a way to save and invest your money, one of the key differences between the two retirement vehicles surrounds eligibility. Unlike a Roth IRA, your ability to deduct contributions from your traditional IRA depends on detailed requirements that are important to explore and consider before making your decision. As long as you don’t contribute to a retirement plan offered by your employer (or even if you do, but your annual salary is less than $74,000), your traditional IRA is fully tax-deductible,2 while contributions to Roth IRAs aren’t. However, because you make contributions before paying any taxes, your distributions are treated as income, and could, therefore, lead to higher income taxes later on. For people who are eager to withdraw their contributions, it’s important to note that you may be subject to a penalty if you withdraw any money before you are 59½. Because you’re required to withdraw these funds the year after you’re 72 (if you have not already reached age 70½ by the end of 2019), you will need to steadily reduce your balance and list the distribution amount as part of your income during tax filing season.3 This could be a deal-breaker for those who would like to contribute to their savings plan with no limits or restrictions, especially since Roth IRAs do not have an age limit. Education is Key When it comes to choosing between a Roth IRA and a traditional IRA, there is no right answer. Everyone is going to have a different preference depending on when they want to pay their taxes, withdraw their distributions and more. However, it’s important to compare the pros and cons of each before making a decision if you want to make the optimal choice for you and your family.  Preparing for your retirement may seem like a daunting task, but deciding which retirement plan suits your needs the best is the first step to securing your assets, future and well-being for the coming years. Whichever decision you make, it’s important to understand that our needs are constantly changing, so be sure to not only think about your current preference but also what you might prefer in the years to come.  https://www.thebalance.com/individual-retirement-accounts-3193216 https://www.irs.gov/retirement-plans/2019-ira-deduction-limits-effect-of-modified-agi-on-deduction-if-you-are-covered-by-a-retirement-plan-at-work https://www.forbes.com/sites/jamiehopkins/2019/12/27/3-major-penalty-taxes-that-could-diminish-your-retirement-savings/#6f62b9033cd7 ### The Economic Impact of Pandemics Pandemics, as rare as they are, have made their mark in history - not only in numbers of lives claimed but in the economic impact felt around the globe. As we’re all facing the market downturn and recent financial volatility caused by the spread of COVID-19, it’s useful to look back at how the economy responded to pandemics in the past, giving us a glimpse of what we might expect to happen in the future. Previous Global Pandemics 101 years before the COVID-19 outbreak began in China, another pandemic swept the globe: the 1918 influenza. Nicknamed the "Spanish flu" because it was first mentioned in Spanish newspapers, this pandemic surpassed the death toll of World War I, taking the lives of nearly 50 million people during its two-year run.1 The Black Death is the only widespread illness in recorded history to take more lives than the Spanish flu, approximately 60 million people, in a similar timespan.2   For some further perspective on the severity of the 1918 influenza, we can look back 10 years ago, before the current outbreak of COVID-19, at the 2009 H1N1 flu, which spread rapidly across the globe and claimed the lives of up to 395,000 people.1  Because the Spanish flu was one of the deadliest and most widespread pandemics in recent history, researchers have often turned to it to gain potential insight into the costs and consequences of future global pandemics, such as COVID-19.  For example, based on what we've learned from past flu pandemics, the World Health Organization estimates that a future flu pandemic would cost the United States $60 billion per year. In comparison, the WHO predicts pandemic preparedness may cost only $4.5 billion per year.1   How Pandemics Affect the Economy Similar to what’s happening now in Europe and across America amidst the COVID-19 outbreak, large cities and populated areas essentially shut-down during the Spanish flu. Anything from sporting events and businesses to private events, including funerals, were discouraged or banned in an effort to reduce the spread of the virus.2  As a result of the widespread nature of this pandemic, countries experienced labor shortages and increased use of government social security systems.3 Because this outbreak happened in concurrence with the end of World War I, concrete figures regarding the exact economic impact of the flu are scarce. The long-term effects of a pandemic on the economy, however, are indisputable. When told to stay inside, people are unable to patronize local restaurants and stores. With no customers and government orders to close, businesses are unable to turn a profit and many may close for good. With businesses shutting down or downsizing their workforce, unemployment rates start to rise. And without a job, individuals don’t have the additional income to patronize the businesses that remain open and operating.  One person’s spending is another person’s income. That, in a single sentence, is what the $87 trillion global economy is. This relationship, between spending and income, consumption and production, is the core of how a capitalist economy functions. What is so deeply troubling about the potential economic ripple effects of the COVID-19 virus is that it requires this perpetual motion machine to come to a near-complete stop across large chunks of the global economy, and for how long, no one is sure. We’re watching this economic cycle happen firsthand. With manufacturing slowing down and profits dropping, investors and consumers are losing confidence in the market. A global pandemic of this magnitude acts, essentially, as a shock to the financial system.  With uncertainty surrounding the economic stability of our country, it’s okay to have fears and anxieties surrounding your own savings and investments. The most productive course of action from here is to reach out to us (or whoever your trusted advisor might be) and discuss your options. It is easy to have knee-jerk reactions when it feels like the bottom is falling out, but it is imperative to make decisions using research-backed data and a level head.  https://www.who.int/influenza/spotlight https://www.stlouisfed.org/~/media/files/pdfs/community-development/research-reports/pandemic_flu_report.pdf https://theconversation.com/coronavirus-and-spanish-flu-economic-lessons-to-learn-from-the-last-truly-global-pandemic-133176 ### COVID-19: You Can Now Take $100,000 From Your 401(k) or IRA, but Should You? On March 27, 2020, President Donald Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act (CARES) Act. Amidst the global COVID-19 pandemic, this act is designed to bring economic relief to individuals and businesses who’ve been affected by the resulting economic downturn. Section 2202 of the act, titled “Special Rules For Use of Retirement Funds,” now allows those affected by COVID-19 to withdraw up to $100,000 penalty-free from their 401(k) or IRA.1  What does it mean to be "impacted by COVID-19?" Congress defines this broadly to include those who: Have been diagnosed with COVID-19; Have a spouse or dependent who has been diagnosed with COVID-19; Experience adverse financial consequences as a result of being quarantined, furloughed, being laid off, or having work hours reduced because of the disease; Are unable to work because they lack childcare as a result of the disease; Own a business that has closed or operate under reduced hours because of the disease; or Meet some other reason that the IRS decides to say it is OK. This new option to withdraw from your 401(k) or IRA is on the table, but should you consider taking it? Below we’ll discuss what you need to know about this change and what to consider before making a decision. Penalty-Free Access to Retirement Savings Traditionally, there has been a 10 percent penalty for withdrawing funds from a 401(k) or IRA account before reaching the age of 59 ½. But through changes passed in the CARES Act, this penalty will be waived for individuals who choose to tap into their retirement savings accounts and withdraw up to $100,000 to cover financial burdens caused by the COVID-19 pandemic.1 If you choose to withdraw, you will have the option to spread the tax liability of this additional income over the next three years, and you will have three years to return savings (up to the full amount withdrawn) back into the account.1 Increase in 401(k) Loan Limits Aside from withdrawing altogether from your retirement savings account, some plan sponsors offer the option of taking out a loan on your 401(k) or IRA. In the past, there have been limits on how much you can withdraw. According to the IRS, the maximum amount was previously “(1) the greater of $10,000 or 50% of your vested account balance, or (2) $50,000, whichever is less.”2  In light of recent events, the CARES Act has adjusted this loan limit to a maximum amount of 100 percent of your vested account balance, or $100,000, whichever is less.1 This option will be available for individuals for 180 days after the CARES Act is enacted. Additionally, anyone owing a 401(k) loan repayment before December 31, 2020, can delay their repayment for up to one year.1 While the amount one can withdraw in a loan has doubled, it’s important to remember the IRS has not changed its rules on loan repayment. According to the IRS, “Repayment of the loan must occur within 5 years, and payments must be made in substantially equal payments that include principal and interest and that are paid at least quarterly.”2 That means that if you choose to take this option, you need to be prepared to pay the full amount back in substantial installments each year. Considerations About Withdrawing From Your Retirement Savings As is true for any other circumstance, the decision to withdraw from your retirement savings account early should never be taken lightly. Depending on your timeline toward retirement, $100,000 accruing compounding interest over the next couple of years could yield significant growth. In fact, the younger you are, the greater the dent you’re putting on your future retirement funds - if you choose to withdraw from your 401(k) or IRA without paying it back. As you address the need for money now, remember to consider your need for money in the future. Is creating a significant reduction in your future retirement income the best option for addressing your present financial hardships, or would it be better to pursue alternative options - such as a personal loan, HELOC or tapping into your emergency savings? Before making a big financial decision like this, it’s important to work together with your financial advisor. He or she can help you understand the long-term impact a decision like this can make on your financial future. https://www.congress.gov/bill/116th-congress/house-bill/748/text#toc-H7E8FA907EAE04884809A56325BD425E5 https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-loans#1 ### Stimulus Checks Are Coming for Americans: Here's What You Need to Know As COVID-19 continues to run rampant in the United States, individuals everywhere are experiencing emotional, physical and economical implications. In an effort to ease the pandemic’s detrimental effects, the federal government has recently passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Included in this act are hospital funds, extended unemployment insurance, extended lending for corporations and interest-free loans for small businesses. In addition, eligible individuals and families will receive stimulus checks with restrictions.1 To better understand how this component of the CARES Act works, below we give an overview of the stimulus checks, answer key questions and look back on the 2008 and 2009 stimulus checks.  The Rundown on Stimulus Checks: Your Questions Answered As part of the CARES Act, taxpayers who qualify will receive a direct deposit of up to $1,200, and couples will receive $2,400. In addition, families will receive $500 per child under the age of 17. The payment will begin to phase out for individuals with a 2018 or 2019 adjusted gross income of $75,000, couples with a $150,000 income, and single parents with a $112,500 income.1 Important to note is that the initial amount paid will be based on either a taxpayer’s 2018 or 2019 income tax return (whichever is the latest return that the IRS has on file), but it will ultimately be ‘trued up’ if a taxpayer is owed money based on their actual 2020 income. In other words, taxpayers will be given an estimated amount based on their 2018/2019 incomes, but could end up getting even more (albeit later) if their 2020 return shows they made less money than they made in the previous two years. How Does the Phase-Out Work? Individuals who make under $75,000 and couples who make under $150,000 are eligible for the full stimulus check.1 For taxpayers with higher income, the amount is reduced by $5 for each $100 above $75,000, or $150,000 for couples - up to $99,000 or $198,000. This means that individuals with an income higher than $99,000 are not eligible to receive a stimulus check and neither are joint filers with an income over $198,000.2 How Will I Receive My Payment? The IRS will use information from 2019 tax returns to calculate your payment amount and will send the payment to the bank account listed on the return. For taxpayers who have not yet filed their 2019 return, the payment will be based on their 2018 return and will be deposited to the account on file from the 2018 return.2  What if the IRS Does Not Have My Direct Deposit Information? The U.S. Department of Treasury is planning to create an online portal where individuals can update their bank information in order to receive a quicker direct deposit, rather than a mailed check.2 If I Usually Do Not File a Tax Return, How Can I Receive a Check?  Those who usually do not file a tax return, including low-income taxpayers, senior citizens and Social Security recipients, will need to file a simple tax return (but still will not owe tax) in order to receive their check.2 The IRS has created a special page dedicated to the Coronavirus and will be updating it with next steps on how to do this soon.  What Is the Difference Between a Stimulus Check and a Tax Credit? The stimulus check is the same as a tax credit, and it is specifically an advanced refundable tax credit, meaning it is a refund allotted to you and is also sent in advance of the 2020 tax return.3 A refundable tax credit differs from a nonrefundable credit, which only applies to the amount of taxes you owe and is not available as a refund to you otherwise.3 Is the Stimulus Check Taxable? Since the stimulus check is a tax credit, it is not income and therefore is not taxable.  A Look at 2008 and 2009 The American Recovery and Reinvestment Act of 2009  The last time the government provided stimulus checks was in 2009 as part of the ARRA in an effort to end the 2008 recession. The details of the ARRA, however, looked different than the stimulus portion of the CARES Act: Checks were only sent to recipients of Social Security, those who received Supplemental Security Income, veterans and railroad retirees. The one-time check was $250.  Individuals with earnings between $6,450 and $75,000, however, received tax credit of 6.2 percent on earned income up to $400 ($800 per couple) in 2009 and 2010 as part of the Making Work Pay (MWP) tax credit. 4 The Bush Economic Stimulus Package In response to the 2008 recession, the year prior to ARRA the George W. Bush administration also sent out stimulus checks. Highlights of this package include: Individuals and couples were eligible for tax rebates on the first $6,000 or $12,000 of income. Individual taxpayers received up to $600 and couples up to $1,200 with an extra $300 per child. Payments phased out with incomes over $75,000 for individuals and $150,000 for couples. 5 How Did the 2008 and 2009 Acts Do? The 2008 and 2009 efforts differed. While the Bush Administration checks went out between May and December 2008, ARRA checks went out quicker, between May and October 2009. Studies show that many individuals did not spend the 2008 checks, but instead either saved the money or used it to pay off debt.6 On the other hand, studies show a GDP and employment increase as a result of ARRA.7 Unlike the 2008 efforts, however, ARRA also issued tax rebates — but since this was not a check in the mail and instead was a tax cut, many Americans may not have realized or interpreted the cut as a “bonus.” As a result, it is speculated that the ARRA may not have had as robust an impact as it could have. The CARES Act appears to be taking a streamlined approach, with components like an online portal looking to speed up the process. As is the case with the COVID-19 pandemic, the full effects will only be seen in future weeks and months, but we can expect to see the full economical effect as government action unfolds — and individuals respond to the stimulus checks.  https://www.appropriations.senate.gov/imo/media/doc/FINAL%20FINAL%20CARES%20ACT.pdf https://www.irs.gov/newsroom/economic-impact-payments-what-you-need-to-know https://crsreports.congress.gov/product/pdf/IN/IN11247 https://www.congress.gov/bill/111th-congress/house-bill/1/text https://www.irs.gov/newsroom/economic-stimulus-payment-qas-eligibility https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3522430/ http://www.cbo.gov/sites/default/files/114th-congress-2015-2016/reports/49958-ARRA.pdf ### Mortgage Refinancing: How the Market Downturn Has Provided an Interesting Opportunity With coronavirus fears growing, millions of homeowners have been receiving surprisingly good news as mortgage rates continue to hit new record lows.  As of April 2, 2020, the national average rate for a 30-year mortgage has fallen to 3.33 percent, with an average of 0.7 points paid, according to data from Freddie Mac.1 Mortgage rates have plunged back to the lowest levels in decades, yet overall mortgage applications were down 17.9% in the week ending April 3, 2020 according to the Mortgage Bankers Association.  Why Are Mortgage Rates Falling? Since March, COVID-19 concerns have ignited volatility in the stock market. At the same time, bond markets have rallied as traders rush to purchase safe-haven assets such as U.S. Treasuries, which are backed by the United States government and a are considered safe havens even in tumultuous economic climates. Since investors are really competing to lend the government and other borrowers money, such bond prices rise, causing interest rates to fall.  Recently, yields on the 10-year Treasury note fell to a historic low of 0.676 percent, extending their break below 0.7 percent for the first time ever.2 While that means lower borrowing costs for the government, 10-year Treasury notes are the key benchmark for 30-year fixed mortgage rates, having a direct impact on their performance.  For the larger part of 2019, mortgage rates fell as U.S. economic growth waned and investors began to predict that the Federal Reserve would cut benchmark short-term interest rates. But, in the fourth quarter, rates rebounded slightly before sliding sharply again this January. As of March 6, 2020, the average 30-year rate fell to an all-time low of 3.29 percent and mortgage applications jumped 30 percent from the week prior, according to the Mortgage Bankers Association.3   But then, as March continued on and the COVID-19 pandemic worsened, demand for refinance loans dropped, reversing the previous weeks surge. What to Expect Moving Forward Because mortgage rates have been sliding, you may be considering whether to refinance your loan. In short, no one really knows how interest rates will react as we continue to face the COVID-19 pandemic and the future ahead, which can make it difficult to make such a weighted decision.  According to CME Group’s FedWatch, traders are suggesting a 100 percent chance of a rate cut at the Fed’s April meeting, but that doesn’t mean mortgage rates will continue to decline.4 In 2019, mortgage rates fell steadily throughout the spring as investors anticipated a rate cut. It wasn’t until early August that they actually rebounded slightly as banks acted on their interest rate policy.  It’s possible that Treasury rates could continue to fall further, especially as fears associated with slowing global economic growth increase. But while nothing is preventing mortgage rates from falling further, another notable decline would place them in truly uncharted territory. It’s important to keep in mind that things continue to change at a rapid pace. So if you are considering refinancing, crunching the numbers now is a good idea.  Should You Refinance Your Mortgage? Taking advantage of today’s low mortgage rates could save you thousands over time, but it may not make sense for every homeowner. According to real estate data and analytics firm Black Knight, it may only be worth the effort if you are able to replace your existing mortgage with one that is at a 0.75 percent lower rate.5 This is because the cost of refinancing can reach a few thousand dollars once you factor in fees for appraisals, title searches, etc.  Black Knight estimated that 14.5 million homeowners would be good candidates for refinancing if mortgage rates fell to 3.25 percent, those of which may be characterized as homeowners with 30-year mortgages who have 20 percent or higher equity in their homes.5 Because payments on a typical fixed-rate mortgage are focused on paying off interest rather than principal in the early years of the loan, it might take a few years to reach that equity threshold if your down payment was lower than 20 percent. In order to be considered a good candidate for refinancing, you should be current on your existing loan and have a solid credit score. Even when factoring in credit scores and equity considerations, the number of borrowers who would be good candidates for refinancing has jumped dramatically in a short period of time.  All in all, refinancing might make financial sense, even if you purchased a home fairly recently. Millions of homeowners nationwide are currently considered to be good refinance candidates.  http://www.freddiemac.com/pmms/ https://www.cnbc.com/2020/03/06/10-year-treasury-yield-falls-below-0point83percent-as-coronavirus-rocks-markets.html https://www.mba.org/news-research-and-resources/research-and-economics/chart-of-the-week https://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html https://cdn.blackknightinc.com/wp-content/uploads/2020/02/BKI_MM_Jan2020_Report.pdf ### A Guide to Managing Your Money During the COVID-19 Pandemic As COVID-19 continues to spread throughout the globe, individuals are adjusting to new lifestyles in an effort to curb the spread. While there are many factors of this pandemic we cannot control, practicing social distancing and creating new routines to remain physically and psychologically healthy are just a few of the actions we can take. Virtually every part of our lives has been affected by the pandemic, including the economy.  As each of us has more time to rethink our financial plans in light of the latest virus and economic developments, the best thing we do with this type of uncertainty is to not make any reflex changes to our financial plan. While we cannot control the fact that businesses are temporarily closed and the market is volatile, we can control our personal finances - adjusting spending or simply being more mindful during these unsteady times.  So, how should you manage your money during this pandemic and economic uncertainty? Here are five tips: Tip #1: Remain Objective & Focus on Your Personal Economy With the market in flux, it can feel tempting to make moves to “protect” your money by selling stocks or switching to different investments. However, if there is one fact that remains constant with regard to the market, it’s this: the market will go up, and it will go down. Remembering that your investment plan was setup to fulfill long-term goals, not short-term gains, can be helpful to avoid succumbing to an emotionally driven investment decision. If you’re feeling uncertain or anxious, it’s always a good idea to chat with your financial advisor to make sure any decisions are in line with your ultimate long-term well-being. Rather than overly focusing on the market at large — and on factors that we cannot control — try shifting your mindset to your own personal economy. This can include components of your financial life such as your budget and your savings, which we’ll discuss more below. Tip #2: Review Your Emergency Savings Fund An emergency fund is intended to help in the face of unexpected circumstances, such as an accident, loss of income, or a home repair. These savings can assist in both small and large unplanned expenses that come up and are not part of your usual bills and spending.1 Whether or not you are currently confronting a dire financial situation as a result of COVID-19, it’s a good idea to make sure you have adequate savings, or begin building a robust fund if you don’t already have one. In the context of a global emergency, especially one that has the capacity to affect every individual’s health or job status, the risk of the unexpected is higher than usual. Making sure you and your family would have enough in case of an emergency is one way to stay proactive and prepared. Tip #3: Be Aware of Scams Many scammers are attempting to capitalize on fears arising as a result of the coronavirus. Scams include vaccination offers, home test kits and other products to treat or prevent the virus. Other scams capitalize on the fact that so many individuals are now working from home, and try to push remote work schemes.2 Sophisticated scammers can disguise as notable organizations, such as the World Health Organization, in an attempt to steal money or sensitive information.3 These various scams can come from robocalls or online offers. The Federal Trade Commission suggests hanging up on robocalls, ignoring online attempts and fact-checking before sharing information related to COVID-19. 2 Tip #4: Review Your Budget Even if your job status has not changed and your income remains steady, consider reviewing your budget, cutting unnecessary costs and taking advantage of extra money leftover each month. The lack of restaurants, bars and stores to visit may mean you now have greater disposable income. You might consider increasing your retirement fund contributions or adding to your emergency savings fund. Additionally, if you have the means, consider exploring donation options to provide assistance and help others, such as food banks or groups supporting hospitals and health facilities. Tip #5: Stay Informed Regarding Available Resources In response to COVID-19, governments are passing packages to support families, individuals and businesses. In the United States, the CARES Act includes extended unemployment benefits, healthcare aid and one-time stimulus checks for individuals with adjusted gross incomes up to $75,000 (single), $150,000 (joint), or $112,500 (heads of household).4 In Canada, the economic response plan includes multiple checks for qualifying individuals, a zero interest rate for federal student loans and an extended tax filing deadline of July 15, which the United States is offering as well.5 In the case that you or someone you know qualifies for or is in need of assistance, stay up-to-date by reviewing your government’s official resources for information. As we collectively confront this global emergency, you can take steps to remain both physically healthy and financially prepared. If you have concerns about investments, building an emergency fund or government resources, reach out to your financial advisor, your workplace or a qualified professional to better understand your options and benefits. https://www.consumerfinance.gov/start-small-save-up/an-essential-guide-to-building-an-emergency-fund/#anchor_what-is-an-emergency-fund https://www.consumer.ftc.gov/features/coronavirus-scams-what-ftc-doing https://www.who.int/about/communications/cyber-security https://www.congress.gov/bill/116th-congress/house-bill/748/text https://www.canada.ca/en/department-finance/economic-response-plan.html#increasing_canada_child_benefit ### Staying Strong: 8 Ways to Manage Your Mental Health During a Quarantine Remaining in quarantine for an extended amount of time is a challenge. Everyone reacts differently to stressful situations, but there are things we can all do to remain mentally strong. Below we’re offering eight tips to help anyone better manage their mental health while social distancing at home.   Tip #1: Take Breaks from the News and Social Media While you want to stay informed, taking in too much information can be upsetting and stressful. Find a balance that allows you to stay informed without overwhelming yourself.  Try  changing your routine for the foreseeable future, reading the headlines for a broad view of the overnight updates and a later afternoon recap of the days events. Tip #2: Remember to Exercise Most of us want to stay on top of our physical health during this time, but exercise can be just as important for your mental health as it is for you physically. There's plenty of option for online classes in yoga, cardio. There are listings for Covid-19 friendly county parks that allow hiking while obeying social distancing rules. It's a perfect time of year to  go for a walk and enjoy the beauty of nature.  Tip #3: Practice Meditation Even if you’ve never done it before, mediation is an effective form of self-care. Through patience and practice, regular meditation can help anyone become more mindful and at ease. It can increase calmness and physical relaxation, improving psychological balance and enhance overall health and mental stability. Tip #4: Make Sure You Are Connecting with Others While we're unable to physically be present with friends and family, it's still possible to keep in touch. Set up a virtual meeting  with your friends or catch up over the phone. It's a perfect time to reach out to people you've been thinking about to ask they how they are doing. I'm sure they will appreciate the thought and brighten someone's day. They might create that same sense of gratitude for someone else.pass that goodness on to others. Some people quarantined at home have even started sending letters or notes to one another, like penpals. Get creative and think of ways you can connect and brighten someone’s day, because chances are your loved ones are feeling anxious as well.  Tip #5: Try a New Hobby With more time on your hands than ever, now’s the time to try something new. Whether it’s painting, knitting, photography or whatever else you’ve always had an interest in trying, it’s a great way to do something fun while clearing your head. If you are at home with children, you could also do age-appropriate crafts and activities as a whole family, as this provides fun for everyone involved. If you haven’t picked up a board game in a while, maybe now’s the right time to start a weekly family game night.  Tip #6: Help Others There are plenty of ways to stay compliant with social distancing regulations while still taking the time to feel good by helping others. Some ideas include:  Offer to get groceries for at-risk neighbors and family members Donate to local food banks  Provide meals to local hospital workers Tip #7: Get Plenty of Sleep Sleep is a time to recharge your batteries, unwind from the day and prepare for tomorrow. Getting the recommended seven to nine hours of sleep will help you to work better, feel better and stay healthy.3 Tip #8: Eat a Balanced and Healthy Diet We may be stuck inside more, but that isn’t an excuse to forego our healthy eating habits. While it’s perfectly fine to enjoy some treats in moderation, make sure that you are still eating meals packed with protein, fruits and vegetables. Eating a healthy, balanced diet will help everyone in your household feel better both mentally and physically over the coming weeks.  We hope that everyone stays healthy and safe while doing their best to support themselves and their communities during this time. As we all endure the emotional and mental stress of the coming weeks, it’s comforting to know there are things we can do to make it better.  ### Thinking of Investing During the Market Downturn? Make These 5 Considerations First With the onset of COVID-19 in America, investors saw the 11-year run of our bull market come to an end on March 11, 2020. As we entered a bear market, the Dow Jones Industrial Average experienced a more than 20 percent drop in March from its recent high on February 12, 2020.1  While many investors are losing confidence in their investments due to the recent market volatility, there are those out there who may find this an opportune time to pad their portfolio. If you’re wondering if now’s a good time to invest, start by taking these considerations into account. Then, if you’re still interested, get in touch with your financial planner to review your options.  Why Invest During a Recession? Choosing to invest during a market downturn can make a lot of sense - asset prices have fallen hard, meaning those willing to invest now can likely get bonds, stocks, real estate and more for a fraction of what those assets are normally worth. Those who were looking to cash out this quarter are in a difficult place with the market drop. But those who are still years, or even decades, away from cashing out what’s in their portfolio may be the ones who can really benefit from this downturn in the market (this is often the case for young investors just starting to build and diversify their portfolio). They have the time needed to watch the market recover and their bargain-priced assets slowly regain their value. Consideration #1: Is My Emergency Fund Fully Stocked? With the uncertainty this global pandemic has brought on in America, many people are preparing for the worst - job loss, medical bills, or even the unexpected loss of a loved one. And as we continue to weather this bear market, we are already seeing record numbers of Americans filing for unemployment.  We are still early days into this crisis, but if we look back at the 2007-2009 recession, unemployment rose to five percent at the end of 2007 and up to nine and a half percent in June 2009. Unemployment actually didn't peak until after the recession ended, at 10 percent in October 2009.2  Even if you’re certain your job is secure and stable, it doesn’t mean you’re immune to loss of income during this market downturn. The number of cases of COVID-19 is growing every day, meaning it’s entirely possible that you may need to care for a sick loved one in the near future. Depending on your job’s policy on leave and your eligibility for the recently passed Families First Coronavirus Response Act, this could mean going for an extended period of time without a paycheck or having to quit your job altogether.  You’ll find different people recommending different amounts, but a general rule of thumb is to have three to six months of salary available in a savings account as an emergency fund. As you consider putting your additional income towards investments, take a look at your savings first. You should feel comfortable with what you’ve already accrued and ready to live off of your savings if you had to. Once that’s taken care of, then you may be ready to turn your focus toward investments. Consideration #2: Would It Be Better to Pay off My Debts? In the fourth quarter of 2019, the New York Federal Reserve reported that American household debt rose to $14.15 trillion.3 While the majority of this debt covers things such as housing, auto loans and student loan payments, this still leaves $46 billion in credit card debt.3 If you find yourself in the position of choosing between paying down your debt or investing, there are plenty of factors to consider, and this would be something to consult with your financial advisor about. Working together, you may find that paying off debt will serve you better over increasing your investments.  Consideration #3: Am I Rushing Into This? While it feels like the market turned overnight, it’s important to remember that recessions and downturns tend to stick around for a while. Our last recession, for example, lasted 18 months.4 What does this mean for an investor eager to jump in? It means you have time. You can speak with your financial advisor and discuss the pros and cons of investing during a market downturn. There’s no need to make a hasty, emotionally driven decision by tomorrow. While the markets will continue to fluctuate, they’re not recovering overnight. Consideration #4: Am I Emotionally Prepared to Watch My Money Drop? If you choose to buy while the market is in a downturn, there’s always a chance that you will buy when it has yet to reach “rock bottom.” This means that you, as an investor, should be prepared for the rollercoaster your investments will likely continue on. While investments are always fluctuating, during an especially volatile period, there’s a good chance you’ll be watching your stocks rise and fall on a downward trend for months to come.  We all have a personal attachment to our money, and it’s important to consider the emotional toll watching your assets drop in value will have on you as an investor. If it’s unbearable to watch these fluctuations, then the potential gains may not be worth the emotional toll you have to endure. It’s important to express your concerns about this to your financial advisor before deciding to invest during a market downturn. Consideration #5: Am I Still Following My Normal Investment Procedures? Don’t treat the tempting prices of investment opportunities as a chance to forego your investment strategy or plan. This is a time in which you’ll want to be precise and logistical about the next investment decisions you make. It’s possible, for example, that your advisor may want to still invest in the companies and stocks you’re familiar with, not just those with the biggest drops in price.  In addition, you’ll want to work in tandem with your advisor to be sure you’re maintaining diversity and taking on an appropriate amount of risk. Together, you can be sure that these changes in your portfolio are still reflective of your greater long-term financial goals. Americans in 2020 are facing a future of uncertainty, between the global pandemic of COVID-19 and the economic instability of a recent market downturn. If you’re in a position to do so, investing now could prove to be a beneficial move for your portfolio, but it is important to consider your decision carefully and thoroughly. Now more than ever, be sure to keep your advisor in the loop and consider your next financial decisions carefully as you navigate through these upcoming months.   https://www.economist.com/finance-and-economics/2020/03/14/entering-a-bear-market https://www.bls.gov/spotlight/2012/recession/pdf/recession_bls_spotlight.pdf https://www.newyorkfed.org/microeconomics/hhdc.html http://www.nber.org/cycles/ ### An Overview of the Newly Passed $484 Billion COVID-19 Relief Package On Friday, April 24, 2020, President Donald Trump signed the Paycheck Protection Program and Health Care Enhancement Act amidst the continuing COVID-19 pandemic. This $484 billion relief package comes less than a month after the historic $2 trillion Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, which offered relief funds for businesses, families, unemployed individuals and others affected by the current pandemic. This new legislation is more narrowed in scope, focusing primarily on replenishing funds for the Paycheck Protection Program and offering more financial relief for hospitals and healthcare workers across the country. Below we’re discussing the specifics of this relief package and how it may pertain to you, your business and your local healthcare facilities. Hospitals, Health Systems & Care Providers This bill is allocating an additional $75 billion to go toward hospitals, health care providers and systems across the United States. As a part of the “Public Health and Social Services Emergency Fund,” this money is meant to reimburse providers for related expenses or revenue lost as a direct result of COVID-19.1 This money can not be used, however, in cases where reimbursements have already been received through other means.    Providers within the United States and its territories who provide diagnoses, treatment or care for individuals with possible or actual cases of COVID-19 are eligible to access these funds.  Such healthcare providers include: Public hospitals Medicare and Medicaid enrolled suppliers or providers For-profit hospitals and healthcare providers Not-for-profit hospitals and healthcare providers1 Research and Testing For COVID-19 In addition to the above, the “Public Health and Social Services Emergency Fund,” will receive $25 billion “to prevent, prepare for, and respond to coronavirus” in the form of research, development, manufacturing, purchasing, administering and testing individuals who may be currently infected or previously exposed to the virus.1 In addition, this fund is meant to help healthcare providers procure additional protective equipment necessary to administer tests safely.  Here’s how the $25 billion will be split amongst healthcare facilities and researchers: $11 billion for states, localities, territories, tribes, tribal organizations, urban Indian health organizations or health service providers to tribes. $4.25 billion for states, localities and territories to be divided formulaically based on the relative number of COVID-19 cases . $2 billion to states, localities and territories in accordance with the Public Health Emergency Preparedness agreement.  $1.8 billion for the National Institutes of Health - Office of the Director. $1 billion for the Centers for Disease Control and Prevention (CDC). $1 billion to assist healthcare providers testing uninsured patients. $1 billion for the Biomedical Advanced Research and Development Authority. $750 million for tribes, tribal organizations, urban Indian health organizations or health service providers to tribes, in accordance with the Director of the Indian Health Service. $600 million in grants through the Health Resources and Services Administration - Primary Health Care. $500 million for the National Institutes of Health - National Institute of Biomedical Imaging and Bioengineering. $306 million for the National Institutes of Health - National Cancer Institute. $225 million for rural healthcare clinics looking to expand their COVID-19 testing capabilities. $22 million for the “Department of Health and Human Services - Food and Drug Administration - Salaries and Expenses.”1 Additionally, the Department of Health and Human Services Secretary will be required to issue a report every 30 days that includes the number of cases, hospitalizations and deaths as a result of COVID-19. In this report, the Secretary will be required to provide distinguishing demographic characteristics such as race, sex, age, ethnicity, etc. These reports will be mandatory until the health emergency has ended.1   The Paycheck Protection Program Amending the previous amounts available to small businesses through the CARES Act’s Paycheck Protection Program, this new legislation will make an additional $320 billion available to businesses affected by the COVID-19 pandemic. As a reminder, the Paycheck Protection Program is designed to assist small businesses with 500 or fewer employees. Qualifying businesses may receive up to $10 million in loans administered by banks or other lenders, and the interest rate would not exceed one percent.2  The Paycheck Protection Program offers qualified employers the potential to receive loan forgiveness if at least 75 percent of the money received is used to maintain payroll through June of 2020. Additional uses for the loan may include interest on mortgages, rent and utilities, according to the U.S. Small Business Administration.2 In order to be eligible for loan forgiveness, the business must maintain the same number of employees (equivalents) in the eight weeks following the date of origination of the loan as it did from either February 15, 2019 through June 30, 2019, or from January 1, 2020 through February 29, 2020.3  Small Business Administration $62.1 billion will be granted to the Small Business Administration to assist small businesses who have been hit hard by the current pandemic.1  This amount will be broken down by: $2.1 billion in salaries and expenses $50 billion for the “Disaster Loans Program Account” to cover the cost of direct loans authorized by the SBA $10 billion for emergency EIDL grants1    The newly passed Paycheck Protection Program and Health Care Enhancement Act is designed to assist those who have been hit hard by this global pandemic - small businesses forced to cease or reduce operations and healthcare providers on the frontlines. If you’re a small business owner hoping to take advantage of these available funds, refer to official government sites, such as the SBA’s Guidance & Loan Resources for further assistance. https://www.congress.gov/bill/116th-congress/house-bill/266/text https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program#section-header-4 https://www.congress.gov/bill/116th-congress/house-bill/748/text ### Economic Impact of COVID-19: 3 Next Steps For Those Struggling Financially The coronavirus has had an immense impact on our physical well-being, as well as the economic health of individuals and families across the globe. Businesses are being forced to cease operation, leaving people worldwide jobless at record rates. Roughly 22 million Americans filed unemployment claims over a four-week period starting March 14 - marking a record-breaking high for the U.S. Department of Labor.1 These unprecedented numbers serve as a sign of the times, as everyone everywhere struggles to make ends meet amidst this global pandemic.     For those struggling financially, the immediate question becomes - What should we be doing now to begin recovering from this? We have three critical next steps for those impacted by the first-hand economic effects of the COVID-19 pandemic.  Step #1: Reevaluate Your Spending  Whether you’ve experienced a sudden stop in income altogether, a decrease in your paycheck or you’re now reliant on financial assistance from the government, any change in your normal cash flow is cause for a reevaluation of your spending. While it may sound like an obvious step to take, it’s one that should be done immediately and with care. If you already have a weekly or monthly budget in place, look it over and determine what non-essential costs you could eliminate. As you’re doing this, it’s important to remember: businesses you typically frequent are likely not operating anyway. If you normally budget for a night at the movies every month, weekly dinners out, etc., consider reallocating this “fun money” to cover more essential expenses. Or, you could use it to start or contribute to an emergency fund. Step #2: Acknowledge the Change This is an unprecedented time, and it’s affected the lives of nearly everyone across the globe. People in a wide variety of industries - hospitality, retail, food, travel and more - have been left jobless for the foreseeable future. On top of this immense stressor, we’re all fighting the spread of a deadly virus. If this has made you stressed, angry, sad, devastated - it’s okay. You’re human, and your reaction is justified. But when it comes to standing tall and moving forward financially, the sooner you can recognize the emotional toll these global events have had and come to terms with the “new normal,” the sooner you can begin planning ahead.  An important part of this acceptance is recognizing any bad habits you might have, specifically financial spending habits triggered by stress. Maybe you’re someone who likes “taking the edge off” with online shopping or use eating out as a way to cheer yourself up. Whatever it may be, now’s the time to practice restraint and remember that these are emotional responses to what’s happening around you. That money may be better spent elsewhere (or tucked away in a savings account). Step #3: Be Aware of Changing Policies Governing bodies and private companies alike are working to accommodate out-of-work citizens. Both the United States and Canada have passed legislation in an effort to amp up benefits for unemployed individuals, and even local governments are attempting to offer relief as well. For example, some local governments have made it illegal for power and utilities to be shut off due to a missed payment during the pandemic. Others have urged landlords to halt rent payments temporarily. Even some insurance agencies and gyms have paused memberships or reduced rates in an effort to accommodate out-of-work individuals. Write down every monthly bill you owe, and begin contacting those companies or agencies immediately. They may not have a forgiveness policy listed on their website, but they may be willing to assist you if you explain your situation - especially since so many people are in a similar spot. Feeling uncertain about the future ahead has become the new normal amidst the COVID-19 pandemic. And if you’re struggling financially, you aren’t alone. There are resources available to you now, such as stimulus checks and unemployment insurance, to help make this time a little easier. If you’re still worried about what comes next, speak to your financial planner immediately. Together, you can work on developing a solid plan for moving forward. https://www.dol.gov/sites/dolgov/files/OPA/newsreleases/ui-claims/20200632.pdf ### Should You Take Social Security Early in Light of a COVID-19 Related Layoff? Just entering the workforce or winding down toward retirement - it doesn’t matter where you are in your career, it’s likely COVID-19 has made its mark on your professional and financial life. But for those between the ages of 62 and 70, you have the opportunity to begin claiming your Social Security benefits, whether you were planning to or not. This “safety net” of sorts could be an appealing opportunity to replace the income you may have lost due to the current pandemic, but this is a decision that shouldn’t be taken lightly. Review the considerations below, and talk to your financial planner to determine which may be the right option for you as you navigate these uncertain times.  Considerations to Make Before Taking Social Security During COVID-19 If you weren’t already planning on claiming your Social Security benefits soon, then take the time to review your other options first. While you’re eligible to begin receiving benefits at age 62, every year you wait until age 70, your benefits will increase. While it’s tempting to take the money now, you could be missing out on thousands of dollars in future Social Security benefits. Is There Other Income I Can Use? If you’ve been saving diligently for retirement, you may already have the funds tucked away to get you through the foreseeable future. Review your 401(k) and IRA accounts, and remember to account for income through any pension plans you may have through work. After taking stock of these accounts and any emergency funds you have saved away, you may determine that claiming Social Security benefits early is not necessary. Even putting off claiming your benefits by six months or a year could make a considerable difference in your future benefits. It’s also important to consider that if you’re earning less now than you were in previous years, you’ll likely be in a lower tax bracket come tax season 2020. This would make now an advantageous time to tap into your retirement savings accounts, as your tax obligation on this income may be lower than if you had worked full-time in a normal year otherwise.  Have I Applied for Unemployment? The CARES Act was passed at the end of March in response to the detrimental financial impact COVID-19 has had on Americans. As a part of this legislation, the government boosted unemployment benefits, offering eligible unemployed individuals an additional $600 per week for four months on top of their normal benefit amounts. In addition, this bill allows unemployed individuals to receive benefits for an extended period of 13 weeks.1    If you were laid off or furloughed as a result of COVID-19 and have yet to look into receiving unemployment benefits, you may want to do so immediately. This income may be sufficient in covering your expenses until you’re able to work again. What if My Other Options Are Limited? It may be necessary to begin claiming Social Security benefits early if you’ve exhausted other resources, or you don’t have much savings to begin with. For example, your primary alternative may be to remove funds from your portfolio. But with the onset of COVID-19, markets are volatile and values have dropped significantly. If at all possible, it may be better to leave your assets where they are as long as possible in an effort to recoup recent losses. Either way, this is a decision you’ll want to make with your financial advisor first. In another instance, if your only other alternative is to rack up high-interest debt, taking the Social Security benefits early is almost always going to be the preferred choice. Falling into a deep hole of debt is not an easy position to overcome, and it’s not an ideal way to start your retirement.  Important Notes About Taking Social Security Early If you do choose to take Social Security early to help ease the financial burden of losing your job, there are a few important things to remember.  The Impact of Working While Receiving Social Security What happens if you begin claiming Social Security, but you get your job back? If you begin working again or find a new job, you may be subject to having a portion of your benefits withheld. This would be based on how much you are making above the SSA’s exempt limit. The SSA uses a retirement earnings test to help determine this amount.2  Withdrawing Your Application to Receive Social Security Benefits You could choose to withdraw your application for benefits within 12 months of becoming entitled to retirement benefits. For example, say you’ve chosen to take benefits now in the midst of COVID-19 because you were furloughed or laid off. A few months from now, your financial situation has turned around and you’re earning again. With some careful consideration, you could choose to withdraw your application. This would mean you’d stop receiving Social Security payments, and it’d essentially “reset” them. Any future date you choose to begin receiving them again, that would be the date that determines how much you receive. If you choose this route, however, it’s important to note that you would be required to pay back any benefits you had already received.3    While claiming Social Security benefits now to address your sudden loss of income may be tempting, it’s important to take some time and consider all of your options. It may be the best move for some, but others could be robbing their future retirement without a need to. If you find yourself in this difficult position, work with your financial planner to find the right option for you and your spouse.  https://www.congress.gov/bill/116th-congress/senate-bill/3548/text https://www.ssa.gov/OACT/COLA/rtea.html https://www.ssa.gov/planners/retire/withdrawal.html ### Top Cyber Security Tips to Utilize While Working From Home As millions around the globe continue to work from home, it’s important to remain vigilant when it comes to staying safe online. Here are eight cybersecurity tips that you can start utilizing today.  Tip #1: Encrypt Sensitive Data in Your Emails  If your position at work requires you to send sensitive information regularly, it’s important to encrypt data that’s been attached to your emails.1 In the event that a third-party is able to intercept an email, encrypted information is much less likely to be compromised.  Tip #2: Use Public Wi-Fi With Caution While most of us have been keeping our distance, there’s a chance that coffee shops and coworking spaces will be opening up again soon. If you decide to relocate your virtual office to a public space, it’s crucial that you still utilize a secure internet connection. Public wi-fi, especially that which is not password protected, is not secure and can easily be infiltrated.  Some options when using wi-fi outside of your home or office include: Activating a personal hotspot from your phone or personal computer. Use a VPN (Virtual Private Network), which provides a secure connection to different services (web pages, email, a SQL server, etc.). Establish encrypted remote connections to a remote desktop or other individual servers. Tip #3: Keep Work Data on Your Work Computer It may not seem like a big deal if you do some work on your personal computer, but in some cases, it can be. If your company has a dedicated IT person or team, it’s likely they’re sending important updates to your computer, regularly running antivirus scans and blocking malicious sites. In other words, your work computer may have the preventative work and maintenance done on it to help keep you safe and protected online. Unless you’re diligently doing the same at home, your personal computer may not be as well protected. If antivirus scans and software are not running regularly in the background, then what you’re doing online could be intercepted by a third-party. Depending on what you’re doing, access work documents or backend sites on your home computer could be putting your company and its network at risk. Tip #4: Avoid Email Scams and Phishing Especially during the COVID-19 pandemic, remain vigilant of potential scam emails, either by unknown addresses or by scammers posing as people/businesses you know. Once a scammer gains your trust or injects an undetected virus, they may try to steal important information such as passwords, account numbers or your Social Security number.2 Tip #5: Don’t Leave Your Laptop Unattended It may be tempting to do so, but never leave your laptop out in the open when working somewhere other than home. This could include keeping it in the car, on a table or anywhere unattended. You never know who may be watching and waiting to take your belongings when you walk away.  Tip #6: Be Selective When Using USB Flash Drives You may have various thumb drives sitting around the house that you’ve acquired over the years. If you can’t remember where it came from, think twice before using it. Do not continue to use one if you have plugged it into a system for whose safety you can’t vouch for.  Tip #7: Use a USB Data Blocker When Charging at a Public Station The time for people to begin working at shared working spaces again is drawing nearer. If you find yourself somewhere where you have access to a public charger, consider using a USB Data Blocker to prevent data exchange and guard against malware. Tip #8: Keep your Passwords Safe Make sure that you keep your computer, email and important documents safe and secure. In order to do so, you may want to consider using a password-saving tool, such as LastPass or Dashlane. These third-party tools allow you to safely store passwords you typically use online, saving you the headache of having to remember multiple passwords across various sites. In regards to password creation and maintenance, there are few tips you can follow to help keep your accounts secure. These include: Don’t use real words Don’t use personal information Create long passwords Change passwords regularly Don’t type them on public devices3 As states start to reopen in phases, many people will be heading back to work or their favorite virtual office spot. Whether you’re at-home, in a coffee shop or visiting a coworking space, continue to utilize these cybersecurity tips to keep yourself and your company’s information safe. https://ci.security/resources/news/article/8-best-practices-for-working-remotely https://www.consumer.ftc.gov/articles/how-recognize-and-avoid-phishing-scams https://us.norton.com/internetsecurity-how-to-how-to-secure-your-passwords.html ### Investments Keeping You Up at Night? Managing Stress During Market Volatility For millions, the pandemic has served as a source of financial distress and worry. This rings true, in particular, for investors of all kinds. Market volatility is the highest it’s been since Black Monday, over 30 years ago - not to mention the fact that this is the largest volatility spike linked to a disease outbreak in history.1  Living through COVID-19 is stressful enough. Feeling hopeless about an unpredictable stock market certainly isn’t any help. If you’re one of many worrying about their investments, these are some dependable ways to reduce stress and make a plan moving forward.  Prioritizing Your Mental Health  Psychological professionals have long acknowledged the detrimental effects of stress. It impacts sleep, cognition and overall physical health.2 In times of financial as well as social uncertainty, it’s important to first regulate your mental wellbeing; high stress levels actually change human perception, increasing the likelihood of impulsive decision-making.3 Due to this, it’s wise to consider certain stress-managing lifestyle changes before making any big investment-related decisions.  Reducing Stress Without Changing Your Finances  Stress makes us feel as if we’re losing control. This is why it’s vital to take control of your lifestyle, independent of finances, wherever you can. The following suggestions have been proven to have positive effects:4  Focus on wellness. They’re timeworn suggestions, but they work: exercise regularly, get enough sleep, eat well and practice mindfulness. Allocate time to engage in recreational activities that make you happy, or explore a new hobby.  Don’t use unhealthy coping mechanisms. These can be harder to recognize than one might expect. Don’t smoke or drink in excess to cope with stress, but also be wary of overworking yourself or unnecessary risk-taking. Stay socially connected. Social support increases resilience to stress.5 Experiencing the combined effects of financial stress and social distancing measures from coronavirus makes people susceptible to feelings of isolation. Lean into your support system and connect with others to avoid feeling consumed by anxious thoughts. Approaching the Volatile Market  While all of the aforementioned actions can help you handle stress, it’s impossible to truly do so without addressing the stressor: the worry you have about your investments.  The first step is to accept what’s happening economically. The optimistic bull run of the past 11 years took a swift downturn, and we’re now in a period of inconsistency.6 That doesn’t mean investors have to live in a constant state of stock-induced anxiety, although it can be difficult not to. In how you approach the stock market, keep these guidelines in mind.  Take a Break  Over-checking your portfolio is ill-advised in general and even more so during market downturns. For most, investing is a long-term proposition. Constantly checking your investments is not only unnecessary but often a source of aggravated stress - the same goes for overconsuming news about the stock market. This can increase the chance of making hasty, emotionally-driven decisions. It may be in your best interest to momentarily step away from your investments in order to gain perspective. Assess Your Investing Goals  While you should avoid over-checking it, seasons of volatility are a great time to reassess your portfolio and remind yourself of your long-term goals. Why is your portfolio made up of these specific investments? Why are you investing in the first place?  Despite a dynamic stock market, it’s probable that investors’ long-term goals remain unchanged. Keeping yourself conscious of these long-term returns is crucial; remember that your investment plans will outlast a period of market volatility.  Making Investment Decisions  If you have a financial planner, talk to them about your concerns. If you don’t have an advisor and think it’s time to work with one, now’s an opportune time. No matter your circumstances, the fundamental piece of advice is to avoid making an uninformed decision.  When you work with a financial planner, they will  assess your financial objectives to develop an investment plan which will allow you to feel secure with your investment portfolio through these volatile times. With a solid investment plan documented, you are psychologically better prepared to ‘stay the course’ during  times of market turbulence.  Remember that, historically, the stock market has recovered.7 Bear markets are a normal part of investing. It’s hard to see an upside as anxiety spreads amongst investors. It’s understandably stressful when you feel the security of your investments is threatened - but don’t allow a volatile market to cause you too much distress. Long-term returns will outweigh the short-term losses. Until then, focus on your mental wellbeing and solidify your financial plans.  https://insight.kellogg.northwestern.edu/article/what-explains-the-unprecedented-stock-market-reaction-to-covid-19 https://www.stress.org/stress-effects https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5201132/ https://www.apa.org/topics/manage-stress https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2921311/ https://crsreports.congress.gov/product/pdf/IN/IN11309 https://www.statista.com/chart/21144/s-p-500-recession-recovery/ ### 4 Areas of Your Estate Plan to Review in Light of COVID-19 Although COVID-19 related restrictions are beginning to ease, many people continue to help slow the spread by staying home and self-isolating. There are still unknowns related to the pandemic and how it will play out, undoubtedly keeping us all on edge. Over the past few months, we’ve been forced to face fears of falling ill, losing a job, spending time alone, etc. With these anxieties weighing on your mind, it may feel as though there’s a sudden need to get your affairs in order, just in case.  It never hurts to be prepared in the event that, for instance, you may need to be hospitalized for coronavirus or any other sickness. Thinking about falling ill or not being able to make decisions for yourself can be frightening, but having an estate plan in place can help ease your concerns.  Many people are taking this time at home to update their estate plans, and if you don’t have one in place, there’s no better time to put it together.  Estate Plan Documents That Should Be Reviewed & Updated If Neccessary Individuals over the age of 18 should have some level of estate planning in place. You may be surprised to learn that wills and trusts aren’t the only documents to prioritize. A strong estate plan will include several important documents, such as a living trust, financial powers of attorney, health care powers of attorney and more.1  In light of the current pandemic, two of the most important documents to have up-to-date and on-hand are your medical and financial powers of attorney. For instance, if you’re quarantined in your home, admitted to the hospital or become incapacitated, you’ll need someone to handle your finances or make medical decisions on your behalf. With those in place, it’s a good idea to continue organizing a comprehensive estate plan that includes the following documents.  1. Power of Attorney and Health Care Proxy A financial power of attorney grants authority to carry on a person’s financial affairs and protect their property by acting on their behalf. This includes the ability to write checks, pay bills, make deposits, purchase or sell assets or sign any tax returns.1  Similarly, a health care power of attorney grants the authority to make health care decisions on your behalf should you become incompetent or incapacitated. If you are over the age of 18 and do not have a health care power of attorney in place, your family members will need to request that the court appoint a guardian to take on these responsibilities.1  Ensuring that you have named trustworthy and reliable individuals as your powers of attorney is key as you update your estate plan. If your current documents are outdated, implementing new ones should be on the top of your list. 2. Your Will A last will and testament is a legal document that allows you to direct distributions of your property at the time of your death. A will also allows you to appoint an executor who oversees the distribution of your assets.2 This person will attend to your affairs after you pass, probate your will if necessary and file income and estate tax returns on your behalf. If you have children who are minors, you should also name a guardian for them in the will.  Everyone has assets that must transfer after a person’s death, and without a will, there is no direction as to how and to whom those assets will pass. Distribution of your assets will be handled by the state and the court will decide on the best person to oversee the administration. This is similar to an appointed guardian in that if you don’t appoint one, a court will decide on the best person to fulfill this role.2 3. Living Trust In general, your trust benefits you while you are alive and may also be beneficial to others, such as your spouse or children. Identifying who will receive assets upon your death may be a detail that needs updating based on your lifestyle and changes that have taken place. Additionally, you’ll want to outline whether your beneficiaries receive your assets outright or perhaps you’ll want to provide them with an income stream instead. If your beneficiaries are young, you may want to consider holding assets for them in a trust until they are old and responsible enough to handle finances themselves.  Appointing a trustee will identify who will step in to manage your affairs without the involvement of the court, avoiding extra time and money associated with probate.3 A trust also affords you privacy regarding the details of your estate since it eliminates the need for probate, which is a public process.  4. Beneficiaries  Another important update you should make to your estate plan is to review beneficiary designations on your life insurance policies, retirement accounts, etc.2 Keep in mind that if you have a joint asset such as a bank account, that will pass to the surviving joint owner. Be sure to name someone you trust to act in your best interest should the time come for them to be responsible for your assets.  Due to stay-at-home orders and social distancing practices, it may be more difficult to meet with your attorney or notary in-person to prepare or update your documents. There are template websites online that allow you to create documents from scratch, and some states have even suspended various statutes to let people appear before a notary public via videoconference.4 While some documents can be finalized virtually, wills need to be signed in front of witnesses, which means this step to finalizing your documents may need to be done in person.  While you have the time, you should start reviewing your estate plan and making any adjustments  needed.  Your financial planner can guide you through this process and advise you on the necessary documents which will benefit your family.  Making these necessary and important changes now will likely benefit you and your family in the future.  https://www.americanbar.org/groups/real_property_trust_estate/resources/estate_planning/ https://www.americanbar.org/groups/real_property_trust_estate/resources/estate_planning/an_introduction_to_wills/ https://www.consumerreports.org/cro/2013/11/how-to-create-a-bulletproof-estate-plan/index.htm https://www.americanbar.org/groups/law_aging/resources/coronavirus-update-and-the-elder-law-community/notarization-in-the-age-of-covid-19--the-status-of-states/ ### How Could the Behavior Gap Affect Your Investments During This Time of Market Volatility? “It turns out my job was not to find great investments, but to help create great investors,” writes Carl Richards, author of “The Behavior Gap.”1 From increasing our budget mindfulness to taking a steadier approach to investing, Richards has drawn attention to the way our unexamined behaviors and emotions can be our detriment when it comes to living a happy and financially sound life.  In many cases, we make poor financial decisions when experiencing panic or anxiety as a result of personal or widespread events. In the past few weeks, the Coronavirus is one such event that has affected nearly every industry and home as people and governments take action to keep themselves and their community safe. The virus continues to evoke fear and panic as the number of affected individuals rises. The stock market volatility of 2020 began on Monday, March 9, with history’s largest point plunge for the Dow Jones Industrial Average. On March 16, 2020, the Dow hit a new record. It lost 2,997.10 points to close at 20,188.52, demonstrating the financial effect of this health crisis.2 Whether facing a devastating event or an exciting advancement, people frequently make money decisions as a response. Below we discuss the common financial behaviors driven by such circumstances. The Behavior Gap Explained  Coined by Richards, “the behavior gap” refers to the difference between a smart financial decision versus what we actually decide to do. Many people miss out on higher returns because of emotionally driven decisions, creating a gap —  “the behavior gap” — between their lower returns and what they could have earned. 4 Common Emotions that Can Create a Behavior Gap  #1: Excitement When Stocks Are High  Whether in a bull market or witnessing the hype from a product release, many investors may feel tempted to increase their risks or attempt to gain from emerging investments when stocks are high. This can lead to investors constantly readjusting their portfolios as the market itself experiences upswings. An investor who follows such patterns is likely to do the same with declines and may end up trying to time the market time and again amidst its inevitable, unpredictable movement. #2: Fear When Stocks Are Low As a response to the Coronavirus, the market has seen losses as many investors feel the need to choose more secure investments and avoid uncertain or seemingly unsafe investments.2 When stocks are low, a common response may be to sell and effectively miss out on potential long-term gains.  #3: Engagement in the Search for Alpha People yearn to make money and take action to do so. Throughout our lives, this emotional desire is likely a constant one. As such, many seek the help of a financial advisor to procure above-average returns, otherwise known as “alpha.”1 However, in this search for “alpha,” our humanness — our emotions and our behaviors — may lead us astray. Ironically, studies done by DALBAR have calculated the “average investment return” as compared to investor returns and have shown that investor returns are lower.1 The underlying emotional desire and pursuit of money is exactly the recipe for unwise behaviors in response to emotions — but only if left unchecked.  #4: Short-Term Anxiety and Focus As humans, viewing aspects of our lives through the lenses of current circumstances is normal. One emotional response to any event, however, is letting the moment consume us, especially if faced with grave consequences —  from our personal health being compromised to the loss of loved ones. Many may find it difficult in these times to both think long-term and to remember logic. However, making a rash decision can inhibit the long-term benefit that comes from maintaining a balanced perspective without reactionary behavior.  How to Lessen the Behavior Gap for Your Financial Health  At any given point, the market can go up, down or it can remain the same. While many aspects of the virus are out of our control, one thing we can control right now is how we handle our financial strategy.  In the past, the market has recovered in response to epidemics with an average of 17.17 percent over time.3 While no two situations are alike, remembering the likelihood of recovery over time — and the market’s nearly inevitable up-and-down movement — can provide a more logical angle to calm the nerves.  If you’re experiencing financial anxiety in response to the coronavirus, take a breath and also remember the potential for long-term gains. Of course, you can and should always reach out to your financial planner for further clarification and direction.  https://behaviorgap.com/outperform-99-of-your-neighbors/ https://www.nytimes.com/2020/03/16/business/stock-market-today-coronavirus.html https://www.marketwatch.com/story/heres-how-the-stock-market-has-performed-during-past-viral-outbreaks-as-chinas-coronavirus-spreads-2020-01-22 ### Fall 2020: The Uncertainty Surrounding College Enrollment The COVID-19 pandemic is changing our world, and there’s no answer for when we’ll be able to resume life as we knew it before. One major change in question is the future of universities and how students, especially incoming freshmen, can expect to receive higher education. This year, colleges across America transitioned to remote learning in early March, meaning many left campus for Spring Break and never returned. Since then, college students around the world have not stepped foot on campus, and there’s much uncertainty regarding how this coming fall semester will look as well. Amidst all these changes, incoming college students are faced with an important question, “Should I consider taking a gap semester?” We’ll discuss what universities are currently doing, and what students may want to think about before embarking on their fall semester. Our Current Situation Incoming freshmen have already missed out on senior year highlights, including prom and graduation. And by now, many have already determined where they will attend college. But amid global uncertainty, the new question of whether they should even begin taking classes in the fall has arisen. The trajectory of coronavirus in America has proven unpredictable, which is why most universities do not yet know what the fall semester will look like. Many colleges around the country have expressed their intent in returning to in-person instruction in the fall. Others are publicly debating whether or not to keep students off-campus until 2021. Either way, it’s become evident that things will likely not return 100 percent back to normal by the time August rolls around. But to what degree social distancing will still need to be enforced is up in the air. This means that in all likelihood, incoming freshmen will be facing a different reality during their first semester as college students than they originally would have expected.  Online vs. In-Person Education College is a place to network, develop bonds and work closely with world-class faculty. Online learning, while effective to a degree, can deprive students of these in-person interactions typically experienced throughout one’s on-campus college career. A new survey conducted by Simpson Scarborough explored how current college students and high school seniors felt about the transition to online classes. Of the nearly 1,100 participants, 50 percent said it was “worse” and 13 percent said “a lot worse” than in-person instruction.1 Many colleges have extended the deadline for students to accept college acceptance offers, and amidst all this chaos, the decision is truly a hard one. In addition, incoming freshmen have had the added disadvantage of missing out on campus tours and in-person interviews.  Financial Implications If universities don’t open back up for in-person instruction, students and their families must face the reality of deciding if it's worth paying tuition and enrolling for the fall semester. The pandemic has already taken an enormous toll on families worldwide, and if incoming college students don’t get the in-person instruction and experience they are supposed to receive, they might consider a gap year. In that Scarborough survey, when the high school students were asked how likely it was that they will go to college in the fall as they had planned, a fifth of respondents said it was likely or highly likely that they would not attend because of the pandemic.1 Not only is this worrisome for incoming freshmen, but it's also concerning to the universities as well. Colleges, like so many businesses and individuals, will face financial hardship as a direct result of the current pandemic.  Students across America are hoping to return to campus in the fall, but the reality of this decision is still unknown. Whether you’re an incoming freshman or the parent of one, it’s important to sit down with your family and decide what you’re all comfortable with doing. If the colleges you applied to have offered an extension on committing, take that extra time to see if the coming weeks or months will provide a clearer vision of what this fall may look like. https://info.simpsonscarborough.com/april-replication-national-student-survey-download ### Roth Conversions: What You Need to Know When opening a retirement savings account, you’re typically presented with the option of choosing between a traditional or Roth IRA. While you may have stuck with a traditional IRA for the initial tax savings, it’s possible you could change your mind and opt for tax-free retirement income instead. Making this switch is called a Roth conversion. Should you consider taking advantage of this opportunity, or are you better off sticking to your current savings strategy? We’re discussing what you need to know below.  What Is a Roth Conversion? A Roth conversion refers to the act of converting a traditional IRA account into a Roth IRA account. A traditional IRA account is created using pre-tax dollars, meaning the distributions you take from a traditional IRA account in retirement is taxable income. A Roth IRA is created using after-tax dollars, meaning the distributions you take from a Roth IRA account in retirement is tax-free (because tax has already been paid).   Additionally, a Roth IRA can be an appealing option for some because it does not include a required minimum distribution age. This means that you can continue to save and grow tax-free dollars for the remainder of your life.  Considerations to Make Before Doing a Roth Conversion While a Roth conversion could be a great option for some, it could be a costly mistake for others. That’s why we’ve outlined four important considerations to make before converting your traditional IRA into a Roth account. Consideration #1: Your Timeline to Retirement If you’re retiring within the next few years, you may want to forego a Roth conversion. Why? Because the money you convert into a Roth IRA must stay there for a five-year holding period. If withdraws are made before the five years is up, you could be hit with a 10 percent penalty and/or additional income taxes.  Consideration #2: Tax Obligations When considering a Roth conversion, you simply can’t ignore the tax implications associated with this move. While your aim may be tax-free income in retirement, you will have to pay taxes on that income at some point. You need to be prepared to pay the taxes on this additional income, which could very well push you up into a higher tax bracket. While it’s possible to cover the difference using a portion of the distribution itself, this is typically not advised for two reasons: you’d be robbing your future retirement of income and you may be subject to a 10 percent penalty for taking the funds.  Consideration #3: Your Future Tax Bracket One of the main reasons an individual chooses to do a Roth conversion is for the advantage of tax-free withdrawals in retirement. With that in mind, you’ll want to take into consideration whether your tax bracket will be higher or lower in the future when you anticipate withdrawing the funds. If you believe you’ll be in a lower tax bracket come retirement, it may be worth waiting to withdraw the funds then. On the other hand, if you’ve experienced a year of interrupted or lowered income (lost a job, missed out on a bonus, etc.), you may be in a lower tax bracket now than you would when entering retirement. Consideration #4: How Much to Convert and When If you’re on the cusp of a higher tax bracket, but still want to do a Roth conversion, you do have the option to convert a portion at a time. By spreading the conversion across several years (as opposed to one lump sum), you can lower your yearly tax obligation.  How to Make a Roth Conversion The IRS offers three possible ways for an individual to convert funds from a traditional IRA into a Roth IRA account. These methods include:  Rollover: You are given the funds and must put the funds into a Roth IRA account within 60 days.  Trustee-to-trustee transfer: The institution currently housing your traditional IRA transfers the distribution to a different institution where it'll be held in a Roth IRA.  Same trustee transfer: The institution currently housing your traditional IRA is able to also house your Roth IRA, and they roll the account over for you.1 Being able to withdraw income tax-free in retirement is an appealing option for many. And it’s good to know that while you may have chosen to open a traditional IRA years ago that you have the option to convert it at any time. Before making any moves to your retirement savings account, make sure to speak with your financial advisor first. Together, you can go over these important considerations in regards to your unique financial situation.  https://www.irs.gov/retirement-plans/retirement-plans-faqs-regarding-iras-rollovers-and-roth-conversions ### Dollar-Cost Averaging (DCA): What Is This Investment Strategy and Should You Use It? One of the biggest fears of any new or seasoned investor is losing money. This fear can actually inhibit some people from ever investing at all, and it might also lead to selling preemptively or opting for the lower risk investment option time and again. To minimize the fear of losing money, investors sometimes choose to go with a risk-reduction strategy, such as Dollar Cost Averaging (DCA).  Despite the fact that the majority of academic research has shown that dollar cost averaging may help to manage risk, but that on average it just reduces returns (and therefore is inferior to lump-sum investing), the popularity of DCA remains high among practitioners and the investing public. However, given that research has shown that the pain of losses is more severe than the joy of gains for investors1, risk-averse investors may prefer to dollar cost average simply to minimize the potential regret of not doing so and seeing markets decline shortly thereafter. What is DCA? DCA is an investment tactic in which a fixed amount of money is invested at regular intervals. The intended goal of DCA is to provide the investor with a lower average cost of shares over time. Since the investment amount will be the same at each interval, the idea is that more shares will be purchased when the price is low, while fewer will be purchased when the price is more expensive.  Those who support the use of DCA claim that it can provide a lower average purchase price for a risky asset, proposing that purchases of assets (that are higher risk) with DCA when prices are declining will provide better returns than lump-sum investing. What are the Proposed Benefits of DCA? Risk Mitigation By only investing a portion of your lump sum, price drops will not impact your portfolio as heavily had you invested a larger portion or your entire sum. Dollar-cost averaging is meant to mitigate the risks involved in lump-sum investing through which an investor could face major losses if the market crashes or prices fall drastically. Risk-aversive individuals may, therefore, prefer to use DCA.2 Managing Emotions Market fluctuations and losses can greatly affect an individual’s emotional well-being. Further, emotional responses to these ebbs and flows, such as overconfidence or panic, can affect future investment decisions.3  Since only part of a sum is exposed to the market, losses may not be as drastic. Therefore, many individuals may experience a duller emotional reaction than if all of their sums were to be affected, decreasing the likelihood of their making emotionally-driven investment decisions in the future.4 As such, DCA may be good option for those looking to minimize the impact of emotion on their investment choices. What are the Critiques of DCA? Missing Out On Gains When employing dollar-cost averaging, portions of your money sit uninvested. The main argument against DCA is that these portions are not given the chance to accumulate any return at all. As a result, some investors and financial professionals may prefer another strategy such as lump-sum investing, which exposes a larger portion of your funds to the market.  Lump-Sum Investing vs. DCA In lump-sum investing, a larger portion of your money is given the chance to make gains sooner rather than later. However, investing a significant portion of your money also means that you may experience more pronounced losses in a vacuum. Over time, however, you can make up for these losses. This long-term thinking also supports the idea behind dollar-cost averaging. Ultimately, the decision to use either tactic will depend on your unique situation.  When to Consider Using DCA  Investors might choose to employ dollar-cost averaging for a variety of different reasons, including for investments that are historically more volatile. DCA is also a way to potentially regulate emotional responses. Dollar-cost averaging might be used in the following circumstances: Volatile investments Other long-term investments, such as 401(k)’s or IRA’s A time in life where any volatility is not feasible and may cause immediate ramifications (i.e. nearing retirement) Individuals who are risk-aversive  Individuals who do not have the funds for a lump-sum investment  The alleged benefit of dollar-cost averaging is that it encompasses the unpredictability of the market yet intends to lower the cost of your shares as a result. When choosing how to invest, it is wise to seek the counsel of a financial advisor, who can help you make the best choice for your circumstances and future goals.  https://www.apa.org/science/about/psa/2015/01/gains-losses https://www.onefpa.org/journal/Pages/OCT15-Dollar-Cost-Averaging-The-Trade-Off-Between-Risk-and-Return.aspx https://www.aeaweb.org/articles?id=10.1257/jep.29.4.61 https://www.onefpa.org/journal/Pages/FEB18-Using-a-Behavioral-Approach-to-Mitigate-Panic-and-Improve-Investor-Outcomes.aspx ### The Stock Market and the Economy Are Not the Same: A Guide to Understanding the Difference When we think of financial health, a few things might come to mind. We may think of our own financial status, our investments, the Dow Jones Industrial Average performance, the stock market as a whole, the economy, the country’s employment status and so on. While some aspects may be interrelated on some level, they are not all one and the same, nor do they all indicate the status of one another.  The various ways we can characterize financial well-being speaks to why so many people think of the stock market and the economy’s health as a gauge for each other. However, the stock market does not define economic health as a whole. As we’ve seen with COVID-19, stocks are back on the rise, but many individuals - and the country as a whole - are still facing the effects of business closures, record-breaking unemployment rates and more. So why is this? Below, we outline the major differences between the stock market and the economy and why one can progress while the other tells a different story.  What Is the Economy? The economy can be defined as “the wealth and resources of a country or region, especially in terms of the production and consumption of goods and services.”1 More specifically, one way we can understand economic activity is through real GDP (gross domestic product), which measures the value of goods and services while factoring inflation into the equation. As a result, understanding the health of the economy can be thought of in terms of the growth rate of real GDP, meaning whether or not the production of goods and services is increasing or decreasing.2 Economic Health in Terms of GDP and Employment  Naturally, employment may rise as production and consumption increase. To produce more goods, companies and factories might hire more employees to complete such production. With more individuals employed and gathering paychecks, more people have money to spend on such goods - increasing overall consumption. Sometimes, however, GDP can grow but not quick enough to create more jobs for those who are unemployed. 2 What Is the Stock Market?  The stock market can be defined simply as “a stock exchange.”3 It is the buying and selling of ownership shares in a corporation.4 The stock market is comprised, therefore, of the buyers and sellers (with some buyers and sellers holding more “stock” than others) and is not necessarily indicative of every business, worker and family.  Some of the main indexes used to understand how the market is performing are the Dow Jones Industrial Average (tracking of 30 leading companies), the S&P 500 Index (500 stocks across all industries), and the Nasdaq Composite Index (a dynamic mix of 3,000 stocks across the technology, biotechnology and pharmaceutical sectors).5 The Stock Market vs. The Economy in the Context of COVID-19  The stock market and the economy can display very different pictures of “progress.” One such example is with COVID-19. In regards to the stock market, the major indexes including the S&P, the DJIA and the Nasdaq Composite index all have surged since the market downturn in March.6 On the other hand, GDP decreased by five percent in 2020’s first quarter, and as of June 2020, the number of unemployed individuals rose to 12 million since February. 7,8 Why is there such a disconnect? A few reasons below. Reason #1 When considering the make-up of the S&P, the DJIA and the Nasdaq Composite index, the stock market isn’t representative of all who make up the U.S. economy. It is largely made up of companies that are different than small businesses, workers and cities in the U.S. - with different profits, greater access to bond markets and global positioning.  Reason #2 The stock market’s performance as a whole only represents a portion of the U.S. employment market. A study conducted by the National Bureau of Economic Research showed that the wealthiest 10 percent of households in the United States were in control of 84 percent of the total value of stock shares, bonds, trusts and business equity and over 80 percent of non-home real estate. This was true despite the fact that half of all households owned a portion through mutual funds, trusts or various pension accounts. Therefore, the stock market may not display an equal distribution between those who make up the economy as a whole.9 Reason #3 It’s long been understood that at times, investors may be driven by emotional or reaction decision-making. As a result, their behavior may not be mimicking the economy’s current state nor affairs happening in real-time.  While the stock market may reflect some changes in the economy and vice versa, the status of one does not show the entire portrait of the other. At times, they can tell entirely different stories, as is the case with COVID-19. Considering other factors such as unemployment can provide a fuller depiction of the state of the economy and the financial well-being of its residents.  https://www.lexico.com/en/definition/economy https://www.imf.org/external/pubs/ft/fandd/basics/gdp.htm https://www.lexico.com/en/definition/stock_market https://www.econlib.org/library/Columns/y2010/Murphystockmarket.html https://www.investopedia.com/ask/answers/032415/what-are-most-common-market-indicators-follow-us-stock-market-and-economy.asp https://www.marketwatch.com/story/its-been-100-days-since-coronavirus-sent-the-stock-market-to-rock-bottom-heres-what-comes-next-after-its-best-rally-over-that-period-in-80-years-2020-07-01 https://www.bea.gov/data/gdp/gross-domestic-product https://www.bls.gov/news.release/pdf/empsit.pdf https://www.nber.org/papers/w24085.pdf ### The Pros & Cons of a Do-It-Yourself Will We all know we need a will so that our affairs will be in order and our last wishes carried out once we have passed on. But did you know you have options when it comes to creating a will? You may have heard that you can actually do-it-yourself when it comes to creating a will, and it is fairly easy to accomplish online.There are a few considerations to make, however, before going this route.  What Is a Do-It-Yourself Will? Just as it sounds, a do-it-yourself will (or DIY will) is a last will that you create yourself, without the help of an attorney. In most cases, you utilize an online tool to download and print forms. Fill out the forms, upload your information and the online service will create your will. Pros of a Do-It-Yourself Will Pro #1: Avoids Lawyer Fees There are, of course, costs associated with having an attorney help draw up your will. Some lawyers will charge a flat fee for creating wills, which can vary greatly - from a couple hundred dollars to a thousand or even more. Others may charge hourly. If this is the case, you can expect hourly rates of typically $150/hour and up. While you may still have to pay a fee to use online resources, taking a do-it-yourself approach is almost always initially a more cost-effective option. Pro #2: Saves Time Creating a will using an online service can be a huge time saver upfront. If you have all the information ready, it can take a matter of minutes or an hour or two. You’re able to complete the entire process from the comfort of your home, and there’s no need to make an appointment, commute to an office and meet with an attorney face-to-face. Cons of a Do-It-Yourself Will Con #1: Could Cost Your Heirs Time & Money Wills can be complicated - and you want to know that yours will stand up to scrutiny. When it comes to ensuring your estate is cared for and passed on in a way you’re comfortable with, having an airtight will is key. Any mistakes, misinformation or improper execution can end up costing your heirs time and money later down the line. If your estate must be probated because your will was improperly executed, this again could cost your heirs time and money before they’ll be able to receive or access their inheritance. Con #2: State Laws Aren’t Always Considered If you’re using an online site to complete your DIY will, it’s likely the site will not take into consideration any state-specific regulations regarding the validity of a will. For example, some states may require that your will be signed by multiple witnesses, while others require the seal of a public notary. Before thinking that simply printing your will is the final step, do some research into what your state requires. Con #3: DIY Wills May Be Too Simple If you’re particularly concerned about the tax burden your heirs will face upon your death, a DIY will may not offer the more sophisticated tax solutions needed. Additionally, a DIY will may not provide enough direction or specification regarding the future care of any minors currently dependent on you.  Who May Benefit Most From a DIY Will? Taking a do-it-yourself approach to your will means you will have no assistance from a licensed professional. If your estate is fairly large or complex, you may need the expertise of an attorney. Additionally, if you have dependents who are minors (like children or grandchildren), you need to know that your will depicts exactly how they should be cared for after your passing. If that’s the case, having an attorney involved can help make sure you’ve put the proper measures in place. If you don’t have any dependents, and your estate is fairly small, taking a DIY approach may be sufficient. If you’re currently working with a trusted financial advisor, ask him or her to help you determine whether or not a DIY will might work for you.