Carol Trzcinski
Recent Posts
In March 2020, Congress passed the $2 trillion relief package “Coronavirus Aid, Relief, and Economic Security Act” (CARES Act) to provide emergency assistance for individuals, families, and businesses affected by the coronavirus pandemic. Among other provisions, the CARES Act made accessing a retirement saver’s qualified plan balances easier and less costly.
Through December 2020, individuals can take a coronavirus-related distribution (CRD) from their 401(k) account of 100% of their account balances (up to $100,000) without incurring the usual 10% penalty. Not only that, the CARES Act has allowed individuals up to three years to pay the taxes owed on the withdrawal, softening what otherwise could be a major tax blow. The act also permits repayment of the withdrawal to the plan (if the plan allows it) or an IRA to avoid taxes.
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The Coronavirus pandemic overtook our daily lives and thriving economy like a violent storm. Almost as quickly, Congress reacted with legislation to lessen its impact on American workers by passing the Coronavirus Aid, Relief and Economic Security (CARES) Act. Providing nearly $2 trillion in economic relief, the Act included temporary provisions to help employees access their retirement funds if they’d been impacted directly by COVID-19. One of the benefits offered is an unmitigated win for those 70½ years old and older:
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On May 23rd, in a blue moon, bi-partisan, super-majority effort,
the House passed a bill intended to encourage retirement savings. It appeared
to be that simple. Even elementary. Given the passage of the bill by a vote of
417 to 3, the Setting Every Community Up for
Retirement Enhancement (SECURE) Act, seemed a
sure thing for quick approval in the Senate.
But…Not. So. Fast. The bill has been suspended in the Senate due
to “holds” placed by several Republican senators which have stalled its
expedited passage under “unanimous consent” and, instead, re-routed it through
committee consideration and a more typical schedule of floor debates and votes.
And why would Senator Ted Kruz (among others) object to the bill?
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The Complicated Relationship between Women and Money
Research shows that when you ask a woman about her relationship to money and investments, she’ll likely say, “It’s complicated.” It sure is.
In the 1980s, a woman-empowered commercial for perfume said that women could “bring home the bacon, and fry it up in a pan…and never let you forget you’re a man” To that we say, you have come a long way, baby.
A few decades later, women are not only bringing home some bacon, almost 4 in 10 are the primary breadwinners for the family.
And there’s more:
51% of women report they are CFO of the household, making daily spending decisions and managing family budgets and cash flow.[1]
53% have responsibility for managing the household’s long-term saving and investments.[2]
Women control the majority of private wealth in the U.S. (at 51% of the total, or $14 trillion) and that share is expected to grow to $22 trillion by 2020.[3]
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On every path to retirement security, there should be a blinking sign that reads: “Annuities This Way: Proceed at Your Own Risk.” Which is an entirely appropriate retirement planning thought.
What’s your appetite for investment risk? If you’re risk averse, it would appear that annuities are an iron-clad, guaranteed, safe investment option. They may be. They may also rope the plan participant into needlessly long investment commitments for which investors pay excessive fees. But not always.
That’s the problem with annuity contracts: too few investors know exactly what they’re buying. And that makes the annuities route to retirement a difficult one to navigate.
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