We read this week that humans “are pattern-seeking, story-telling animals.” As a rule, we don’t like uncertainty. This makes it easy to adopt absolute views on the challenges we face. We want to identify the best way to handle the balance between the disease and the economy, and it is very tempting to adopt a strict view about what must be done. But it isn’t that simple.
As you digest statistical models and prognostications of what all of this means for the economy, remember that these are based on assumptions that are changing on a daily basis.
The most useful thing that we can do is focus on what is within our circle of influence, explained simply by Stephen Covey many years ago in his Seven Habits as “
Be Proactive
.” In that spirit, this week we are sharing a few important items related to easing the pain from COVID-19.
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- We learned: about Jitsi, a videoconferencing alternative to Zoom. A security-conscious client shared it with us, as an alternative for those concerned about some of the security issues that have been in the news. It works very well for smaller meetings like ours and we have started using it for our weekly Monday Morning Meeting.
- We think: early withdrawals from retirement plans should be avoided whenever possible. Occasionally, unusual circumstances like the pandemic put enough financial strain on a household that a withdrawal may be the only or best option.
In 2020, the 10% early withdrawal penalty will be waived for anyone who takes a distribution and is
- Diagnosed with SARS-CoV-2 or COVID-19, or has a spouse who has been diagnosed.
- Experiences adverse financial consequences due the disease.
There are other important provisions, including larger-than-normal 401k loan amounts, and these are discussed in greater depth
here
and
here
. Please contact us with any questions
- We've been: fans of journaling for a long time. Sometimes we don’t have a lot to say, so a writing prompt can be helpful. We like this one, borrowed from a Tim Ferriss blog post:
Write a letter to your younger self. Thank them, praise them, scold them, comfort them—engage in whatever way you feel led with one or many versions of your younger self. Whatever comes to mind.
Now, let’s shift to exploring your older self. What would you want to say? To ask? To request? Tell your older self what you are doing now in service of them. Tell them what the ideal situation might look like when you finally meet—where might you be living, what type of work might you be doing, who you might be spending time and space with.
Taking a moment each day for mindfulness (prayer, meditation, journaling) is one way to proactively handle these challenges.
- We recommend: reconsidering IRA or 401(k) Required Distributions for 2020. They have been waived for all individuals during this tax year. If you do not need the funds, reducing taxable income and allowing time for retirement funds to recover will be wise for many investors..
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Q:
My business is doing okay so far, but what do you suggest if my cashflow is reduced?
A:
There are a few good places to start preparing for reduced income:
- Take advantage of the programs noted in this helpful guide to the many COVID-related programs enacted through the CARES Act. This includes special small-business tax provisions available under the Act
- Contact lenders to identify options for deferral or forbearance. In the meantime, reduce debt payments to minimum levels.
- Identify essential expenses so you have a clear idea of your “burn rate.”
- Call us so we can schedule a time to discuss your options.
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Advisory Services offered through Lowry Financial Advisors, Inc., a Registered Investment Adviser. Securities and additional advisory services offered through Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser. Advisory services offered through Lowry Financial Advisors, Inc, are separate and unrelated to Commonwealth. Lowry Financial Advisors, Inc. is located at 12921 SW 1st Rd, Suite 215, Tioga, FL 32669. 352-333-7990
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Lowry Financial Advisors is the only advisory firm that helps its clients reach their goals through
The
Achieving Simplicity® Experience™,
providing clarity and confidence in their personal and financial lives.
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