Even as careers progress and wealth accumulates, investing can still feel like a foreign language for many women. Considering financial literacy and investing are rarely taught in school, it’s not hard to see why many people (not just women) struggle to find their financial footing later in life. Basic financial strategies and concepts are often even gatekept from women (particularly if they grew up in more traditional households), or framed in confusing terms that just don’t resonate.

But investing isn’t just for Wall Street insiders or finance buffs. It’s a tool that’s accessible to everyone, and when paired with patience and strategy, it can be used to support your values, goals, and long-term vision.

Let’s talk a bit more about investing and financial know-how, and what you can do to feel more confident in your decision-making moving forward.

Demystifying the Investment Landscape

It feels like the investment world prides itself on being overly complex. Acronyms fly fast- ETFs, REITs, RMDs- and the sheer amount of jargon feels like it’s intentionally meant to keep outsiders at bay. But if we pull back the curtains and start with the basics, investing can be a simple and rewarding process designed to help you build wealth over time.

Speaking of keeping it simple, you don’t need to become an expert in every market cycle or memorize the intricacies of bond yields. Rather, establish your long-term goals, consider how much risk you’re comfortable taking on, and work with a trusted advisor who can manage the rest.

You and your advisor can work together to drown out the day-to-day noise of the market movements, while focusing on the long-term growth potential of your portfolio. They can help you build a well-balanced set of investments that may include stocks for growth, bonds for stability, and cash or cash equivalents for liquidity.

From there, your job is relatively simple:

• Contribute regularly
• Ignore the urge to make impulsive decisions (including buying or selling during periods of volatility)
• Reassess the performance and balance of your portfolio at regular intervals (say quarterly or annually)

Once you’ve got the basics down, you and your advisor can continue building on your knowledge and comfort levels to explore other opportunities that might align with your interests, values, and goals.

Investing That Reflects Your Career and Life Trajectory

Your wealth wasn’t built overnight. Your investment strategy shouldn’t be either. A thoughtful portfolio will reflect not just your appetite for risk, but also your life experience, evolving goals, anticipated timeline towards retirement, and the trajectory of your career.

For example, if you’ve been a business owner or executive, your income may have come in waves- perhaps through equity compensation, performance bonuses, or proceeds from a business sale. That irregularity should be acknowledged in how you approach certain aspects of your wealth and investments, including your access to cash (liquidity), diversification, and tax strategy.

Or, if you’re nearing retirement after decades of wealth building, your focus may shift from accumulation to preservation and income generation.

A well-aligned portfolio can help ensure your wealth continues to support your needs, whether you’re planning an upcoming sabbatical, giving charitably, or establishing a second act career that’s less about profit and more about pursuing your passion or purpose.

Understanding the Emotional Side of Money

Even the most capable women can carry hidden fears about investing. Perhaps you’ve seen others make costly mistakes, or you’ve been told, explicitly or implicitly, that investing is “too risky,” “too confusing,” or “not your strength.” 

Investment confidence doesn’t mean never feeling nervous. It means knowing you’ve built a framework that supports you through market ups and downs, and anchoring your decisions in a long-term plan- rather than reacting to headlines or short-term volatility.

For many women, confidence grows not from watching the markets, but from watching their own progress and simply learning by doing. When you can clearly see how your portfolio supports your personal and professional life goals, investing can feel less scary- and more like a normal part of everyday life.

How the Right Advisor Can Help Improve Financial Confidence in Women

If investing still feels like unfamiliar territory, that’s okay. What matters most is not where you’re starting, but how you move forward. The financial industry hasn’t always done a great job of meeting women where they are- but we’re happy to say that’s starting to change.

Today, more advisors are embracing a collaborative approach to planning, which prioritizes education and goal-setting. They’re tailoring strategies to better reflect real-world needs and changes, as opposed to relying too heavily on outdated hypothetical models. More advisors are also creating space for conversations that go beyond charts and benchmarks to focus more heavily on your priorities, opportunities, and vision for the future.

If you’re ready to take the next step, you don’t have to go it alone. With the right support, you can gain the literacy, clarity, and confidence to build a portfolio that reflects the life you’ve worked so hard to create. Don’t hesitate to send us a message, let us know what’s on your mind, and schedule time to talk with our team.

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What is Equal Justice Initiative?

EJI is a private, 501(c)(3) nonprofit organization that provides legal representation to people who have been illegally convicted, unfairly sentenced, or abused in state jails and prisons. They challenge the death penalty and excessive punishment and provide reentry assistance to formerly incarcerated people.

EJI was founded in 1989 by Bryan Stevenson, public interest attorney, author of the book Just Mercy, and Professor of Law at New York University School of Law. The organization he founded is focused on helping the poor, incarcerated, and condemned. As a parent, I find the work they are doing to help children in adult prisons truly sobering.  Before EJI launched a litigation campaign in 2006 to challenge death-in-prison sentences imposed on children, 3000 people were sentenced to life imprisonment without parole for offenses they committed when they were 17 or younger, some as young as 13.  EJI argued before the Supreme Court to have children considered differently in sentencing, and they were successful in this challenge.

Another area where EJI has made a difference is in the area of wrongful convictions.  Since 1989 they have helped exonerate 367 people through DNA evidence, each one of these people having spent more than 8 years in prison for crimes they did not commit.  The stories of the lives that have been altered by wrongful convictions are impactful.  This one of a young woman wrongly convicted for her mother’s death was especially heart-rending.

At WealthChoice we believe in giving back and choose to support organizations that effect change-from empowering women executives to supporting less fortunate members of our society.  This year we are pleased to add Equal Justice Initiative to our roster of those organizations we support who are making a difference.

The post Meet the Equal Justice Initiative appeared first on WealthChoice.

 “The highest form of wealth is the ability to wake up every morning and say ‘I can do whatever I want today’.”

In essence, true wealth is control of your time.  Time to spend with your family, friends, in a career you love, a hobby you enjoy.  Whatever is most important to you, but your choice.

Does that resonate with you?

Most of my clients long to have the ability to choose to work so that they could instead spend their time doing something they consider more meaningful, more fulfilling. Which pretty much underscores the fact that what they are doing now is not what they’d choose to if they truly had a choice.  In fact, control of our time has become more elusive now than for past generations. This lack of control over time has led to less happiness even though we are richer now than in the past.

So how do you create the financial wealth that allows you to have this control of time-to do what you want, with whom you want, when you want?

Focus on what you can control.

Personal savings, frugality, and your behavior are three critical things you can control and can be as effective in the future as they are now. Investment returns? Anyone’s guess what they’ll be. Is investing important? Absolutely! But can you predict your returns? No, no one can. Believe it or not, 40% of all companies successful enough to go public effectively lost all of their trading value over time. 40%! Trying to guess which investments will outperform is a fools’ errand, and cannot be controlled, but by focusing on these three areas you personally can control true wealth, control of your precious time, is within reach.

Savings

This part is really quite straight forward. As planners we encourage folks to save for goals that are important to them. But you can save without a specific goal and you can save more than you need for a specific goal. You can save just to save because life is uncertain and because saving more than you need gives you more options. If your goal is to contribute the maximum to your 401k every year, challenge yourself here by saving more than that. Open a non- retirement investment account and establish a monthly recurring contribution.

What can you do?  Make savings intentional and automatic, and you’ll wind up with more options, that can lead to more control of your life and time.

Frugality

We all know the saying “It’s not what you spend, it’s what you save.” Nothing could be more true. Living below your means is within our power and affords us the extra money we can put towards savings. I am not advocating here that you sacrifice lifestyle now for an uncertain future, but there is a balance.

Several years ago a story hit the media about an elderly gentleman in rural Vermont who lived a simple life and worked as a janitor. Nothing was terribly remarkable about his life, but when he died it turned out his net worth was more than $8 million. People who knew him were floored. How could someone with a modest income have so much money? This man, Ronald Read, lived below his means. He saved and invested, and held his investments over time. If we want true wealth we should aspire to be a little more like Ronald Reed.

What can you do?  Take a look at your monthly income and spending and decide on an amount you are willing to save, automatically, into an investment account.

Behavior

Doing well with money has little to do with how smart you are and a lot to do with how you behave. Ronald Reed exemplified this. In fact, how you behave may be more important than what you know.

If you think back to the beginning of the pandemic and March 2020, the market took a steep turn for the worst. Anxiety and uncertainty ruled. How you behaved under these circumstances made a significant difference to your financial situation just a few months later. As Housel shares, “your success as an investor will be determined by how you respond to punctuated moments of terror, not the years you spend on cruise control.”

What can you do?  Having an investment plan, sticking with it, keeping emotions at bay in times of anxiety and unrest can help you achieve that true wealth.

If your goal is to have more choices of how you live your life, financial freedom is the key. These three simple steps-savings, frugality, behavior-are all within your control. It’s truly why we named our firm WealthChoice. Smart choices can provide us with true wealth, and they are often simpler than we think.

The post 3 Steps to True Wealth appeared first on WealthChoice.

But owning a pet isn’t cheap. In addition to the basic costs such as food, toys and grooming, pet owners can spend more than $27.8 billion on veterinary bills every year, according to the American Veterinary Medical Association.

So when a client of mine recently asked me my opinion on pet insurance, my answer wasn’t clear cut. As a single woman, her only “child” is her dog. Understandably she wanted to know if it would make financial sense for her to spend on pet insurance.

Pet insurance may seem like an extra bill you’d prefer to avoid, but it’s important to factor in your personal situation. Can you afford not to have the financial fallback the insurance provides? How would you cope if your pet needed life-saving treatment that couldn’t be paid for?

Why Do People Get Pet Insurance?

Just as with my client, for many Americans, pets are their children. No expense is spared when it comes to the health of their pets. Since this can be quite expensive, pet insurance may help to defray major medical expenses.

Pet insurance is there to cover a risk that you cannot potentially afford, and as a sort of “forced savings” in the event of a claim. If your beloved pet required $20,000 for surgery, would you be able to pay it? Would you have cash in an emergency fund you could tap to pay the bill?

Essentially, by having pet insurance you are building that emergency fund via an external third party; the insurance company collects the money you might otherwise be setting aside for a potential major medical vet claim.

How to Look for Pet Insurance

One resource shared with us that Healthy Paws and FIGO seem to trade off as best value. Many insurance plans also include vet visits and other such foreseeable expenses. These drive up the cost of the policy for no reason, and can easily be budgeted for in addition to your monthly insurance payments, so be sure to look for pet insurance that only covers what you really need.

If you aim for true insurance for unplanned expenses, pet insurance may make sense. It offers financial reassurance, and helps avoid the heartbreak of having to decide whether or not you can afford to save your pet’s life.

Don’t Forget to Account for Pre-Existing Conditions

Be mindful of “pre-existing conditions” with your pets. Pre-existing conditions, breeding and cosmetic surgery aren’t typically covered, and accident and illness coverage can vary by provider, so it’s worth checking on what a policy will and will not cover.

Some pet insurance companies will deny claims for rescue pets due to potential pre-existing conditions,” so check to make sure that a company will cover your rescue pup.

Decide What Feels Right for You and Your Family

In our opinion, there is really no right way to go here. If you are inclined to pay for chemotherapy and other very large expenses that could potentially happen down the line, (and you don’t have a rescue), you might want to consider pet insurance.

If having pet insurance will give you peace of mind, there is a value in that, too. However, you could also consider saving monthly into your emergency fund an amount, say $100, that you would allocate to pet care.

If you’ve had an experience with pet insurance we’d love to hear it. And for more valuable information on all things financial, check out our book where you’ll find many of the trusted resources we use for smart financial moves.

The post Pet Insurance: Do You Need It and Is It Worth Having? appeared first on WealthChoice.

What you as an attorney, and your law firm, do in the second half of 2020 will either make or break your year.

Why does this matter from a financial planning perspective? Because your job, your career, is the source of the income that you need to live the life you want-to fund the goals that are important to you. A lot is at stake now, and how you manage your career moving through 2020 will have great impact on your financial future.

What is the number one skill needed for navigating times like these and for break-out growth?

It’s a growth mindset.

A growth mindset embraces the belief that growth is limitless. A fixed mindset is a limiting belief-a belief that there is only so much growth. Rather than play to win, attorneys with a fixed mindset play not to lose.

We spoke with GrowthPlay Managing Director, Debra Baker, on how attorneys can position themselves to end 2020 successfully and start 2021 on the right path. Debra and her firm help drive law firm growth in revenue and expand client relationships. She shared that now is a great time to reevaluate what you want out of your law career, and it’s a great time to reinvent yourself.

Moreover, having a growth mindset is essential for women and minorities.

Debra shared that in times of economic crisis, women and minorities in law firms suffer most from the effects of a fixed mindset. So, it is especially important to embrace a growth mindset if you are an employee of a firm with a fixed mindset, or find yourself with this limiting belief.

The financial crisis of 2008 was brutal for attorneys and for law firms. And yet, some firms came out of that crisis stronger and better off financially. Debra saw firms like Sidley Austin LLP embrace a growth mindset during that crisis, which led to a stronger, more profitable firm. But many more firms and attorneys had a fixed mindset. They hunkered down to ride out the storm, rather than focus on opportunities for growth. When you have a fixed mindset you believe that there is only so much growth, and that when times are tough, you slash, burn, and contract. You take profits, cut employees, cut salaries, cut marketing and business development. This fixed mindset is focused on survival, but not on thriving. Just reading the headlines from the Layoff Report of Above the Law makes it painfully clear how many law firms have a fixed mindset.

Fast forward to today, where we find ourselves in another economic crisis. The steps lawyers and law firms take now will make all the difference to their year, and their financial future. Rather than focusing on “just making it through” the storm, time of disruption is the perfect time to invest in yourself and your firm.

Debra shared with us the three steps of a growth process she walks through with the attorneys and law firms she advises-

• Take a growth assessment. Know where you are, what your risk factors are. We will forward you an assessment from GrowthPlay that you can take yourself-please reply to this email and we’ll email it to you.
• Do a growth audit. What is your process for growth, for business development? What are your strengths? The playbook for business development has been thrown out, so now is a time to pivot.
• Prioritize what has to happen and when.

Once you have decided to choose a growth mindset, and have audited where you are, growth will come down to bringing in business. Law firms are all about generating revenue. Most firms have a small number of attorneys responsible for generating revenue (Debra calls them “Sellers”). These are the attorneys most valued by their firms, and most successful. Those attorneys who are junior or not responsible for bringing in business are called “Doers.” You may be a Doer because you can’t stomach sales. Countless conversations with attorneys over the past decade have made it clear to me that most attorneys aren’t fans of business development. It’s not why you pursued law. But, sales is freedom. Having a valuable professional network and professional alliances that serves as a funnel for new business gives you freedom and more choices. It leads to greater compensation and control over your career and your ability to live the life you want.

How to become a “Seller” when you really don’t like sales? The most successful “Sellers” are those who are givers. They are generous with others, suspend self-interest, and have authentic relationships within their professional network. This is not pitching, not selling as most people might think. It is approaching business development as a way for you to help others. And, it can be done virtually, which allows you to continue to grow in our evolving pandemic.

There are three ways Debra suggests you “give” to those folks in your professional network-

• Make introductions. These could be personal or professional introductions.
• Invite folks in your network to events that are valuable to them. There are countless webinars now on myriad topics that you can share with your professional alliances.
• Share information or insights that your network would find valuable. This might be a legal update, job position, even something personal.

People are especially hungry for information now and sharing that with your network will keep you top of mind and help you create a deeper, more authentic relationship with them. This in turn leads to business opportunities.

We are halfway through 2020. It is a great time to take stock of where you are now in your business and where you’d like to be when this year wraps up. Embracing a growth mindset can help you end 2020 with a thriving practice and begin 2021 on the right financial path.

If you’d like to learn more about how we at WealthChoice help female lawyers live the life they want, contact us.

The post Having a Growth Mindset Will Make Your 2020 a Financial Success appeared first on WealthChoice.

We recently had Clinical Nutritionist Tara Coleman facilitate a webinar for us on Diet Skills to Help You Manage COVID Weight Gain. Tara shared that while many people are struggling with their diets during lockdown, she is seeing success with a number of her clients in three distinct areas. We detail those steps below-

1. Maintain Meal Planning

This doesn’t mean you have to plan out a complicated menu of meals you have to cook. This is having a food plan, having a plan for food for breakfast lunch and dinner. Rather than having no plan around a meal, which can lead to impulsive choices, knowing where your meals will come from is helping folks keep the eating on track. This might mean planning to get take-out for dinner on Tuesday and Thursday, cook dinner Monday and Wednesday. It might mean adding in a meal-kit meal for other meals. It’s knowing where you are ordering from, what meals you are cooking, just having a plan of action.

Tara suggested meal planning doesn’t have to be all or none, and it doesn’t have to mean Michelin starred meals. It doesn’t even have to involve cooking. It does require some level of planning. Perhaps you decide to meal plan for breakfast and lunch one week only. You can add in dinners incrementally. The success here is from having a game plan so that better decisions are made around the food you eat.

You can check out eatingwell.com for ideas on meal planning, and for customized meal planning you can reach out to Tara for a 30 day meal plan here.

2. Focus on Behaviors

For many people, their diet and their behavior around food pre-COVID was different. Tara suggested looking at the big picture here, rather than focusing on small details. What worked for you in the past? Why? When did healthy eating feel easier to you? You did something differently in the past around food and diet and that has shifted during COVID. If you think back on your diet behavior pre-COVID, reinstituting some of those successful behaviors will help.

3. Maintain a Support System

Our lack of connection during the pandemic has been one of the most frustrating parts of COVID for many. Isolation and loneliness have contributed to many of the diet challenges. What Tara has seen is something she refers to as “unhealthy habit stacking.” Habit stacking is when you take a behavior you already have and add a new behavior to it. For example, in the past you may have connected with friends over cocktails at a bar. Now, people are connecting for virtual happy hours over Zoom. Tara suggests instead you stack healthy habits here-skip the Rose and grab a mocktail or a glass of mineral water for the virtual happy hour. Choose to stack healthy habits rather than the unhealthy choices that are torpedoing our diets.

Tara also noted that having an accountability partner can really help here. This could be a friend, colleague, even a Habit Tracker-some way to help yourself stay on track and to celebrate the wins.
You can find more great diet information on Tara’s blog. And, if you are finding lack of sleep and poor diet are leading to cravings during COVID, check out Tara’s steps to conquer cravings at taracoleman.com/cravings.

At WealthChoice we believe wealth is nothing without your health and we are committed to sharing valuable resources like Tara Coleman who can truly make a difference to your quality of life.  If you’d like to learn more about how we help our clients live the life they want, you can contact us.

The post Three Places People are Having Success Navigating Diet During COVID appeared first on WealthChoice.

These are clearly challenging times with everything we once knew shifting rapidly. The way we live, the way we work, the education system, how we travel, almost everything.

In times like this, we may have a tendency to be feel stuck and frustrated and that is normal. Sometimes we need to be there until we are called to get unstuck.

In that stuck place, it is a great time to reevaluate all areas of your life and ask yourself these questions:

• Am I doing what I love?
• Is the path that I have been on with my career and business still working for me?
• Am I feeling called to make a difference and if so, what is the difference I want to make?
  • When you look around your community and the world – are there problems that you want to help solve?
  • Is there something that you have struggled with that you have overcome that you could help others who are struggling with the same thing you struggled with?
• What is important to me in all areas of my life and am I living my life in a way that feel fulfilling?
  • How are my relationships with those closest to me?
  • Am I taking the best care of my health?
  • What are my goals financially and am I meeting them?
  • What have I been putting off doing that I want to put into motion?

After being on the front lines of the last economic downturn, I supported 100’s of people turn that challenging time into an opportunity to uncover and live their passion and purpose. While it was tough at first, they began to see that there was something better on the other side of this and then they began to live that better.

What’s next for you?

If you are in the need of more support, feel free to visit my website at www.careerswithwings.com for more support and you can reach me at marcy@careerswithwings.com.

We interviewed Marcy on this topic and you hear her speak about how to live your passion and purpose in the short video below-

The post Using Challenging Times to Uncover and Live Your Passion and Purpose appeared first on WealthChoice.

Rockstar Lawyers lose their jobs too. I’ve lately talked to multiple talented young lawyers ejected (or soon to be) from their jobs at major firms and in-house alike. If you’re worried about losing yours, or already did, you’re likely embarrassed and uncertain what to do. Here’s some things you can do RIGHT NOW:

• Up your LinkedIn presence. Make sure your profile is up to date and reflects the skills and experiences you want potential employers to know about you. Then start commenting on the posts of your network. Don’t know what to say? Congratulate people on promotions or wins or awards.
• Re-connect with your network. People lose touch with most of their professional contacts for the simple reason that they don’t bother. You’ve been busy with work, life, family, and such. And now you need those professional contacts. So reach out. Send an email or text wishing them well or Happy Hamburger Day (it’s a thing, really). This will mean more if you’ve been doing it longer, so get to it.
• Ask for help. You’re hurt and humiliated, so it’s hard. But people care about you. So ask, not for a job but advice. And follow up to let folks know how it went.

A long career awaits you. It will be better and more fulfilling the stronger you build your relationships with others in the field.

If you have questions about how we at WealthChoice help women attorneys navigate through times like these, please contact us.  You can also find helpful blogs on our website that address the financial and career steps women attorneys can take now that can help them succeed despite these challenging times.

The post Downsized by Your Law Firm? Do These Things Now appeared first on WealthChoice.

Recovery Rebates-
These are the checks everyone has been hearing about. They are essentially credits against 2020 taxes, and will be received as a check. Who is eligible, and the amount for which you are eligible depends on tax filing status and income. Income is based on the 2019 tax year, or if not yet filed, based on 2018.

Single filer with maximum income of $75k receives $1200 Married filing jointly maximum income of $150 receives $2400 Head of Household maximum income of $112k receives $1200 Each child under the age of 17 receives $500

If you earned over these amounts there are Phase Outs that decrease the amount you will receive.

Action step-If you have not yet filed your tax return for 2019 and it was a low-income year that would qualify you for a Recovery Rebate check, we suggest you file your return as soon as possible. If your 2020 income will be less than 2019 and will qualify you, you will receive the benefit when you file your 2020 taxes.

TAX AND RETIREMENT PROVISIONS

Changes have been made to retirement account withdrawals, Required Minimum Distributions, and taxes that may provide financial support to you.

Retirement account withdrawals-
You can now take a withdrawal of up to $100k from an IRA/employer retirement plan, or combination of both. The withdrawal must be taken in 2020 and must meet the following criteria-

• You, your spouse, or a dependent was diagnosed with COVID-19
• You have suffered adverse financial consequences as a result of COVID-19 (for example, no access to childcare)
• You have suffered from reduced business hours, or your place of employment has been forced to close

This provision waives the 10% penalty from early withdrawal, waives mandatory withholding typically required from employer retirement plans, and allows you to spread tax payments from the withdrawal over 3 years.

Action step-If you meet the specified criteria and need to take a withdrawal from a retirement account, let’s talk first. That said, the process is that you call the plan administrator and tell them you have been a victim of the virus and your withdrawal qualifies as a COVID-19 related distribution. It might be in your best interest to pay the taxes due in 2020 if your income has dropped substantially.

Loans from Employer retirement plans-
The maximum you can now take is $100k. You can also take a withdrawal of 100% of your vested balance, and any payments due on the loan will be delayed one year.

Changes to Required Minimum Distributions (RMDs)–
RMDs required for 2020 have now been suspended. This applies to not only IRAs, but Inherited IRAs.

If you have taken an RMD within the past 60 days, you can roll it back in an IRA. Any RMDs taken earlier in the year cannot be rolled back.

Unemployment Compensation Relief-
Changes have been made to provide for unemployment compensation for self employed persons and 1099s who were previously not eligible for unemployment.

There is no waiting period, and coverage starts the first week of unemployment.  Essentially, this benefit provides an additional $600/week to the unemployment benefit for four months.  Be careful here, and consider having taxes withheld from unemployment.  Otherwise, you may have a rude awakening when taxes are due next year.

BUSINESS RELIEF PROVISIONS

There are two separate programs that apply to small businesses affected by the COVID-19 pandemic. We have attached a separate brochure from the US Chamber of Commerce further detailing out what you need to know about these loans. In a nutshell, they are-

1. Economic Injury Disaster Loans (EIDL)-These are available now by applying directly to the SBA at sba.gov
2. Paycheck Protection Program (PPP)– These will not be available until late April, but you can apply for EIDL now, and convert it to a PPP loan later. You’ll also apply for these through SBA.

Economic Injury Disaster Loans-

• Available to small businesses and non profits that have suffered working capital losses from the disaster. Must have no more than 500 employees.
• Loans of up to $2million that can be used to pay fixed debts, payroll, accounts payable and other bills that cannot be paid because of the disaster.
• You can request an advance of up to $10,000
• Maximum interest rate is 4% for businesses, 2.75% for non profits
• Up to 30 year loan repayment
• No collateral required for loans below $25,000, but lack of collateral will not lead to a loan declination
• These loans will not be forgiven

Paycheck Protection Program-

• Must have 500 employees or less
• Maximum loan amount is $10million or 2.5 times the average monthly payroll cost of the prior year and excluded employee compensation greater than $100k.
• Must be used to pay Payroll, salary, rent, mortgage, utilities, gas, water, electric, transportation, phone, internet, group health plans, business expenses incurred before 2/15/2020
• Loan must be used within 8 weeks of receipt for the above expenses.
• Must have the same number of employees from 2/15-6/30 as you did during the period of 1/1- 2/15/2020 and you cannot cut employee compensation by more than 25% if it is under $100k.
• These loans are forgiven if criteria are met.

Action step-You’ll want to contact your local SBA office to get this process started asap. You can also apply online at sba.gov.

Employee Retention Credit-

This is a credit equal to 50% of wages paid to each employee with a maximum of $10k per person to cover payroll taxes. The credit continues to end of 2020 or when revenue is greater than 80% of the same quarter in 2019.

Eligibility-

• Business must be suspended either partially or fully
• Revenue has decreased by 50% from same quarter in 2019

Deferral of Payroll Taxes-

For any employers, this provision provides for deferring the employers portion of Social Security payroll tax until 1/1/2021 with half due by 12/31/21 and the second 50% due 12/31/22

OTHER RELIEF PROVISIONS 

Student Loan Deferrals-

All Federal student loan payments can be deferred until 9/30/2020. Loans will NOT accrue interest during this period.

Action step-Payments will automatically be stopped, so there are no steps you need to do here.

H.S.A./FSA changes-

Over the counter medicines will now qualify for H.S.A/FSA payment

There are quite a few financial relief resources here that you might consider taking advantage of.  For employers, we suggest speaking with your CPA regarding the PPP or EIDL loans, and with respect to anything tax related.  We would also suggest speaking to your financial planner before making moves around your RMDs or taking funds from retirement accounts.  You can also reach out to us with any questions on navigating the CARES Act.

The post CARES Act: Financial Relief Available to You appeared first on WealthChoice.

Check in on your financial plan to see if you are still on track, or if you need to make some changes

Each client we work with has different life and financial goals, some of which may be happening in the not too distant future. Now is the time to take stock of where you are given the market decline, to see if you are still on track, and if not, to determine the impact of recent events and steps you can take. You will want to re-run your plan so you know what you are dealing with and can determine any options you have if there are gaps that need to be addressed.

Revisit your budget to find places to cut

If your plan is not on track, you will want to revisit where money is currently being spent to see where you have options to cut. Spend a few minutes penciling out your expenses so you know what you must pay for versus what you’d like to spend money on. The must haves are your fixed expenses, and everything else is considered discretionary expenses you truly don’t need. For most of us our discretionary spending has been cut back with the elimination of big expenses like travel, but online shopping and take-out can be a financial drain.

The CARES Act that was enacted last week to provide financial support allows for the deferral of Federal Student loan payments through 9/30/20, as well as mortgage forbearance. Many credit card companies are also offering relief. You will need to speak to the lender for deferral on payments here, but these actions can free up much needed cash.

This may also be the time when you cut back on retirement contributions temporarily, if it makes the difference between covering living expenses or not.

Find capital to replace lost income

If your income is impacted as a result of events, once you’ve revisited your budget and know how much you need to cover costs, you will want to look to replace the lost income. First, we suggest using that emergency fund that you have saved for over time. Ideally you will have the equivalent of 3-6 months fixed expenses in a savings account for just this purpose. If that isn’t the case, or if you have depleted your savings, look to what is most people’s biggest asset for cash-your house. Rates have been bouncing around quite a bit, but if they drop again, you might consider refinancing.

Another option to tap into your house is a Home Equity Loan (HELOC). While you may not need to draw on it, having access to a HELOC could help bridge the temporary income gap.

If needed, you could consider withdrawing money from your taxable brokerage account but know that you’ll have to pay capital gains taxes on any gains from the account.

Lastly, The CARES Act provides for exceptions to rules for taking withdrawals and loans from retirement accounts before the age of 59 ½. The Act allows for a maximum of $100,000 loan from employer retirement plans, as well as a withdrawal of up to 100% of your vested balance. Payments to the loan will be delayed one year. Keep in mind, though, that you are still required to pay taxes on any withdrawals, but no penalties are charged. You can also take a withdrawal of up to $100,000 from an IRA, employer plan, or combination of both. This withdrawal must take place in 2020, and taxes paid over a 3-year period.

Apply for an Economic Injury Disaster Loan (EIDL) or the Payroll Protection Program (PPP)

These are two separate programs created by CARES Act that apply to small businesses affected by the COVID-19 pandemic. Both are available to businesses with 500 or fewer employees, though the PPP is forgivable. EIDL is a low interest rate loan specific to payroll and other business expenses with up to a 30-year repayment period. PPP is financial relief that is forgivable if it is used on qualified expenses within 8 weeks of receipt.

You may want to speak with your bookkeeper or CPA for guidance here. Both applications are now live and you can learn more by going to sba.gov.

Rebalance your portfolio

With the big decline in the market your investment accounts may no longer be in line with your appetite for risk. Typically, when stocks decline, bonds increase in value. With the market pull back, your accounts may have less stock value relative to bonds than you would ideally like. This is a good time to review what your allocation is, and to rebalance back to where your ideal risk tolerance is.

Many 401k plans allow you to choose frequency of rebalancing. Now would be the time to choose to rebalance given the big swings in investments to get your portfolio back on target.
We strongly suggest you resist the temptation to move your accounts to cash. We have been here in the market before and we have always recovered. Locking in losses does not get you closer to your financial goals. Avoid the media and stay with your strategy. Get your portfolio back on track with rebalancing, and let it not only recover, but grow over time.

These are challenging times and we know there is a lot on everyone’s mind. By taking a few minutes to get your arms around your current financial situation, and by acting, you can weather this storm and be okay now, and in the future.

If you’d like our feedback on whether you are still on track financially, please reach out to us.

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