CARES ACT
July 15th
What is the new tax filing deadline for 2019?
July 15th 2020
What is the deadline to make an IRA contribution for 2019?
$350k or $100k
What is the minimum initial investment for a Fixed Income and Equity SMA?
Cost, Relationship, Simplicity, and Holistic Planning
What are the reasons to Consolidate assets to Fidelity?
$1,200
The CARES Act includes a provision to send most Americans direct payments of $1,200, or $2,400 for joint filers, plus $500 for each child.
The amount of the payments will be reduced for those with higher incomes. For individuals filing taxes as singles, the reduced amount begins at an adjusted gross income (AGI) of $75,000 per year and is completely phased out at $99,000. For joint filers, the reduced amount begins at $150,000 and payment is eliminated at $198,000.
Your AGI will be determined by your 2019 tax filing (or 2018, if 2019 is unavailable).
WAIVED in 2020
Required minimum distributions (RMDs) for 2020 are suspended for certain defined contribution plans and IRAs to help retirement accounts try to recover from stock market losses. This includes the first RMD, which individuals may have delayed from 2019 until April 1, 2020.
~600 bps
Total return portfolios are ~600 bps underweight the model
Asset Allocation
Economy/Business Cycle
Maintenance
What are the Principles of investing
2 weeks (or 80 hours)
Paid leave is required for more employees by the Families First Coronavirus Response Act. These provisions apply to businesses of 500 employees or less. Businesses with 50 employees or less may be exempt from the paid leave provisions.
Eligible employees must be allowed up to 2 weeks (or 80 hours) of paid sick time:
The CARES Act caps these payments at $200 or $511 per day or an aggregate payment of $2,000 or $5,110, depending on the reason for leave.
Family leave was expanded under the Families First Coronavirus Response Act. Affected employees are entitled to up to 10 additional weeks of leave with job protection to recover from illness, at two-thirds their regular rate of pay, or to care for school-age children whose school has been closed.
The CARES Act capped family leave payments at $200 per day and $10,000 in aggregate
up to $100,000 from all retirement accounts
Affected, eligible participants in workplace retirement plans and IRA owners can take an aggregate distribution in 2020 of up to $100,000 from all retirement accounts without incurring the usual 10% early withdrawal penalty. The affected participant or IRA owner (including a spouse or dependent) would need to either be diagnosed with SARS-COV-2 or COVID-19 or experiencing adverse financial consequences as a result of an event, including but not limited to quarantine, furlough, lay-offs, reduced work hours, no available childcare, business closing or reduced business hours (self-employed), or other factors determined by the Secretary of the Treasury.
~1000 bps
Defensive portfolios are ~1000 bps underweight the model
3 ways to Handle RISK
What is AMT? Avoid Manage Transfer
The Emergency Economic Stabilization Act of 2008
Money Market Fund Guarantee: The law temporarily permits, but does not require, Treasury to use the Exchange Stabilization Fund to guarantee money market mutual funds. The Emergency Economic Stabilization Act of 2008, legislation passed to stabilize the financial system during the subprime mortgage crisis, included language prohibiting Treasury from guaranteeing money market funds. Any guarantee established as a result of the application of this section shall terminate not later than December 31, 2020.
$100,000 or 100% of the vested account balance
The maximum 401k/403b loan amount is increased from $50,000 or 50% of the vested account balance to $100,000 or 100% of the vested account balance.
5X YTD through 3/20
How many times SAI has rebalanced PAS accounts YTD?
Past
Future
Manage
What is Fact to Emotion?
$454 billion
Fixed Income Market Liquidity: The law addresses illiquidity and price dislocation in the fixed income markets due to the pandemic. The Treasury Department will be authorized to backstop (with at least $454 billion) an expansion of existing Federal Reserve emergency facilities to stabilize corporate and municipal debt markets
3 years
the income tax on the distributions may be spread evenly over 3 years. Or, the distribution may be repaid to an eligible retirement plan within a 3-year period.
$326M YTD
$326M YTD in cumulative tax savings through tax-loss harvesting. 2nd largest amount in an one year since 2008/09
Guaranteed Income vs Variable Income
What is Income Diversification?