CARES Act Signed into Law –Brings Relief to Millions of Americans

Sunday, 29 March 2020

CARES Act Signed into Law –Brings Relief to Millions of Americans

On March 27 the President signed into law the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to address the unprecedented public health and economic crisis related to COVID-19.

This $2 trillion bill is meant to impact both individuals and businesses and contains significant tax-savings measures. It could affect prior tax years while also creating immediate cash-flow.

Impact on Individuals

Stimulus Checks

Perhaps the most impactful provision for American citizens is the CARES Act’s promise of cash payments of up to $1,200 per single individual and $2,400 for a married couple. Parents will also receive an additional $500 per qualifying child. Payments are phased-out for individuals with incomes greater than $75,000 and for married couples filing jointly with income greater than $150,000.

Provisions are such that payments will be based on 2018 tax returns, though, like the Affordable Care Act’s tax premium credit, there is a true-up related to the amount for which you are eligible on your 2020 tax return. Nonresident aliens, dependents and estates and trusts are not eligible for a stimulus check.

Retirement Plan Rules

Since this bill aims to generate more access to cash, it loosens retirement fund rules. In particular, it waives the 10 percent early withdrawal penalty for distributions up to $100,000 for coronavirus-related use. It also allows for the federal income tax on such distributions to be paid over a three-year term. Finally, these distributions can be contributed back into the retirement fund within three years with no impact on that year’s contribution limit.

The CARES Act also adds flexibility regarding loans from certain retirement accounts when used for coronavirus-related needs. The loan maximum is now the lesser of $100,000 or 100 percent of the accrued benefit. Repayment is also now delayed.

New Awakenings in America

Friday, 27 March 2020

New Awakenings in America

As I sit here in my home office looking out at so many beautiful plants just beginning their gorgeous annual blooming ritual, I am reminded of the new awakening we Americans are experiencing. Americans have a long history of pulling together when needed, from 9/11 to numerous world military conflicts and now to the global COVID-19 virus pandemic. Amid the drumbeat of constant bad news these days there are also many good things happening--one just has to look around a little.

Tax News: IRS Announces Extended Filing and Payment Deadline for 2019 Tax Returns

Americans Can Defer Filing & Payments for 90 Days
Friday, 20 March 2020

Tax News: IRS Announces Extended Filing and Payment Deadline for 2019 Tax Returns

As we continue to face uncertain times, the IRS has made a welcome announcement.

Treasury Secretary Steven Mnuchin has announced that the IRS has decided to extend the filing and payment deadline for 2019 tax returns, allowing taxpayers to defer until July 15. Mnuchin indicated this move will put $300 billion into the economy during a time of great economic concern over the consequences of the COVID-19 pandemic.

The payment deferment is subject to certain caps, however. Individuals may defer tax payments of up to $1 million, while corporations may defer up to $10 million. The limits were purposefully selected to benefit small businesses that report income through S corporations, partnerships or other pass-through entities.

How to Remain Hopeful and Keep Perspective During the COVID-19 Outbreak

Tuesday, 17 March 2020

We are facing something we have never faced before in our lifetimes. That is a fact and, in a time, when the news of the pandemic is spreading and the recommendations on social distancing are getting broader by the day, it can be hard to feel certain or safe about anything. 

As troubling as it is to watch the unprecedented market decline and as hard it is to tune out the fact that you know you are losing a lot on your investments, we need to maintain our health and the health and safety of our family, friends and neighbors as the number one priority. Covid-19 which emerged late in 2019 in China has spread rapidly worldwide since then and is a global pandemic. The measures taken by leaders around the globe have been drastic leaving most children without a classroom to go to, parents working from home or without a job altogether and investors panicking about what is to come. 

This disruption to daily life and to our psyches is substantial and it’s terrible. The coming weeks will not be easy, but these measures are practical and prudent.

Do not Equate Sudden Panic with an Ongoing Market Trend

Yesterday – March 9 – was the eleventh anniversary of the crescendo of global panic that marked the bottom of the bear market of 2007-09.
Tuesday, 10 March 2020

It is, to me, a thing of the most irony that the world elected to celebrate this iconic anniversary with – you guessed it – another epic global panic attack.

At yesterday’s closing level of 2,747, the S&P 500 is down over 18% from its all-time high, recorded on February 19. Declines of that magnitude are common occurrences – indeed the average annual drawdown from a peak to a trough since 1980 is close to 14%*. But such a decline in barely a month is noteworthy, not for its depth but for its suddenness.

As we all know by now, the precipitants of this decline have been (a) the outbreak of a new strain of virus, the extent of which can’t be predicted, (b) the economic impact of that outbreak, which is equally unknown, and (c) most recently, the onset of a price war in oil. (That last one is surely a problem for everyone involved in the production of oil, but it’s a boon to those of us who consume it.)

The common thread here is unknowability: we simply don’t know where, when or how these phenomena will play out. And in my experience, the thing in this world that markets hate and fear the most is uncertainty. We have no control over the uncertainty; we can and should, however, have perfect control over how we respond to it.

Coronavirus: What the Viral Epidemic Means for Investors

Volatile Markets and the Ongoing Spread of the Virus are Causing Economic Uncertainty
Monday, 09 March 2020

Beginning last week and continuing into yesterday we saw the worst week on Wall Street since 2008, as the Dow fell into correction due to the outbreak and spread of COVID-19 (and other factors), commonly called novel coronavirus. A market correction is a nerve-wracking event for investors, but the current uneasiness in the markets is no cause for panic.

Market Impact

While the spread of COVID-19 is atypical, market corrections are not. In fact, it’s an entirely normal process, especially after experiencing such strong performance in recent years.  There have been 22 market corrections since 1974, and they are aptly named because the market usually “corrects” itself and returns prices to their longer-term trends. While the coronavirus is likely to cause economic impact into at least the second quarter of 2020, historically, including in the recent past, Wall Street’s reaction to these types of epidemics has been short-lived.

Eight Steps to Master Saving for Retirement with Your Spouse

It Pays to Be Financially Prepared
Wednesday, 04 March 2020

Eight Steps to Master Saving for Retirement with Your Spouse

Are you worried you and your spouse aren’t saving enough for retirement? It’s a growing concern among many Americans, and rightly so. With new medical advances, retirees are living longer than ever before – meaning their retirement savings need to stretch further.

According to the 2017 Lincoln Retirement Power® Participant Study by Lincoln Financial Group, most Americans will need to save a minimum of 10 percent of their income each year – more if they plan to work for fewer than forty years. However, only 4 in 10 workers are currently meeting that savings goal.

Luckily, it’s possible to build a secure financial future, even if you feel behind. Follow the eight steps below to master your savings plan and set yourself up for retirement success.

The Healthcare Hurdle: Is It Truly Possible to Achieve Financial Independence?

Rising Health Costs Remain a Barrier for Many Americans
Wednesday, 19 February 2020

The Healthcare Hurdle: Is It Truly Possible to Achieve Financial Independence?

Do you dream of the day when work becomes an option, rather than a necessity? If so, you’re not alone. Many Americans in their thirties, forties, and fifties are working hard to save and invest with the hope of achieving financial independence and leaving the working world behind. This is no small feat, what with concerns like boomerang children, inflation, college costs and caring for aging parents. It’s health care costs, however, that act as the biggest hurdle.

Early Retirement: Pros, Cons, and Alternatives

Learn Whether Retiring Early is the Right Move for You
Wednesday, 05 February 2020

Early Retirement: Pros, Cons, and Alternatives

The dream of early retirement is a common one, but is it really all it’s cracked up to be? Like anything else, there are pros and cons to this major life decision, as well as alternatives that may be worth considering. So, before you set your sites on saying sayonara to the working world, read on.

A note on the Coronavirus & the Markets

Monday, 03 February 2020

A note on the Coronavirus & the Markets

We at TriCapital take seriously the high degree of trust placed in us by our valued clients and I thought it would be appropriate for me to take a minute to address the current global viral epidemic that is impacting the markets.

On Friday, January 17 – after a spectacular 40% runup that started the day after Christmas 2018 – the Standard & Poor’s 500-Stock Index closed at 3,329.62.

Two weeks later to the day – last Friday, January 31 – the Index closed a little over three percent lower, at 3,225.52. (Indeed, more than half that damage was done on Friday.)

As a result, we have been invited by financial media to suspect that the blended value of 500 of the largest, best-financed, most profitable businesses in America, and indeed the world, has “lost” three percent – with more “losses” to come – due to the outbreak in China of a new strain of coronavirus.

Please permit me to doubt this, and to suggest that you – as goal-focused long-term investors – join me in doubting it.  

Improve Your Finances in 2020 With These Financial Fitness Resolutions

Resolve to Set Yourself Up for Financial Success in the New Year
Wednesday, 29 January 2020

Improve Your Finances in 2020 With These Financial Fitness Resolutions

Making New Year’s resolutions is common but sticking to them isn’t easy. If you’re interested in tackling your financial fitness in 2020, read on for five suggested resolutions to tackle throughout the year.

  1. Create Your Budget Roadmap

From a big picture standpoint, finances are all about how much money is coming in and how much is flowing back out. Creating a personalized budget roadmap can help you visualize your long-term goals and assess whether you’re making progress year to year. Here’s how to get started:

Understanding the SECURE Act and How it Could Affect Your Retirement

Learn More About the Sweeping Legislation Designed to Fight America’s Retirement Savings Crisis
Wednesday, 08 January 2020

Understanding the SECURE Act and How it Could Affect Your Retirement

In May 2019, the U.S. House of Representatives passed the Setting Every Community Up for Retirement Enhancement Act, commonly called the SECURE Act. Designed to help tackle our country’s growing retirement savings crisis, the far-reaching legislation spent months tied up in the Senate. On December 19, 2019, it passed the Senate with a 71 to 23 majority.

Let’s take a look at a few standout provisions of the legislation and discuss what they could mean for you.


Financial Planning Strategies for those Caring for Children and Aging Parents

Practical Tips for the ‘Sandwich Generation’
Thursday, 26 December 2019

Financial Planning Strategies for those Caring for Children and Aging Parents

A growing group of Americans in their 30s, 40s, and 50s find themselves caring for both growing children and aging parents at the same time. Labeled the “Sandwich Generation,” these caregivers have unique financial planning needs – and they face unique financial stress, too.

Aging parents often have health-related expenses, while minors and college-age children require substantial financial resources as well. At the same time, these caregivers caught in the middle need to be saving for retirement and they may still be paying off debts of their own.

Should You Pass an Inheritance on to Your Children?

Learn More About a Valuable Measure of Your Financial Health
Tuesday, 03 December 2019

Should You Pass an Inheritance on to Your Children?

Choosing to leave an inheritance to your children will greatly impact your retirement planning. You will need to adjust the amount you save, which retirement plans you choose and how you’ll take your distributions from them. However, the decision to leave wealth to your heirs requires careful consideration of other factors, too.

1.    Your Income Needs

One of the most damaging errors you can make is to give away retirement savings that you’ll actually need for your own income in retirement. While it’s admirable to want to share your nest egg with your children, you need to consider how much personal income you’ll need to live the retirement life you desire. If you’re unsure how to determine this amount, try a retirement calculator like this one from Bankrate. It can help you determine how much to save and how much to withdraw annually once you retire. 

What the Permanence of the Qualified Charitable Distribution Rules Means for You

How the PATH Act of 2015 Removed the Guessing Game and Created More Flexibility for Retirees
Wednesday, 13 November 2019

What the Permanence of the Qualified Charitable Distribution Rules Means for You

An Introduction to the Qualified Charitable Distribution

For years, the rules surrounding the ability to utilize a tax-free Qualified Charitable Distribution (QCD) directly from your IRA to a non-profit were on-again, off-again. The rules would lapse frequently, then be reinstated by Congress – but only for two years at a time. Finally, with the passage of the Protecting Americans from Tax Hikes (PATH) Act of 2015, the rules allowing for the QCD were made permanent in tax law.

Consequentially, it is now much easier to take proactive steps in your charitable giving strategy so that you can minimize the tax implications of your IRA’s Required Minimum Distribution (RMD). However, you must follow very strict requirements if you want to receive the tax benefits associated with gifting a QCD to a registered charitable organization. These requirements include age limitations, maximum dollar amount limitations, and regulations on the particular types of charities that are eligible.


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