Financial Planning Ideas and Resources for 2020


I hope that you and your family are holding up well. I know these are stressful times on a number of fronts. My team and I are standing by in case we can be a resource for you. To that end, I’ve compiled a list of some practical planning ideas and resources you might find helpful.


Investing – No one possesses the ability to predict the short-term fluctuations of the market or accurately “call the bottom”. However, if you share my belief that ultimately our country (and the world) will weather this storm and you have the ability to contribute more to your investment accounts, then now may be a good time to do so.


Estate Planning – If you’ve held off on instituting or updating an estate plan now may be a good time to knock it out. One document that’s normally part and parcel of an estate plan is an advanced health care directive. This document specifies what type of care you would like to receive if you are incapacitated and also designates who can make health care decisions on your behalf. A best practice is to keep a copy on file with your health care provider and ensure that any designated decision makers have a copy as well.

For California citizens, you can create a stand-alone advanced health care directive by using the linked form provided by the State of California. It would be best to have a comprehensive plan. But if time or circumstances don’t permit then you may want to put this in place as a stop gap measure. For those who don’t live in California check your state as many offer similar resources for free.  Click here to download the PDF. 


Roth IRA Conversions – This may be a good time to convert a traditional IRA balance to a Roth IRA. As a refresher, Roth IRA balances grow and are ultimately distributed tax free assuming that distribution rules are followed. There is not a penalty for converting but you will pay income taxes on the amount that is converted in the year of conversion. Therefore, if your income is high this may not be an appealing move at the moment. Further, some company sponsored retirement plans allow for conversions within the plan, so check with your plan sponsor or administrator. Also, I must give the disclaimer that everyone’s situation is unique and you should consult your tax adviser before implementing.


Required Minimum Distributions (RMD’s) – The CARES Act passed last week suspended RMD’s for 2020 and for 2019 if you happened to turn 70 ½ in 2019. It’s appears that we’ll be able to undo a RMD already taken for 2020 (or 2019 if you turned 70 ½ in 2019). Though we’ll have to wait for IRS guidance to definitively answer this question.


IRA Contributions – The CARES Act extended IRA contributions to July 15, 2020 along with the tax filing deadline.


Qualified Plan Distributions – The CARES Act also provides for taking distributions without penalty from a qualified retirement plan such as a 401(k) or IRA. However, you must meet certain criteria related to COVID-19 hardships. Consult with your tax professional to determine if you meet the requirements for one of these distributions.


Life Insurance – Several life insurance companies are temporarily not requiring a medical exam or blood/urine analysis. Instead, a medical questionnaire will suffice. They are willing to consider up to $3M of life insurance for anyone age 50 or younger. Please note that depending on the medical history disclosed on the questionnaire the insurance company may request medical records as part of their evaluation process. For anyone who is age 50 or older it may still be possible to get some coverage without the medical exam. There may be additional underwriting requirements that apply, but all in all, this presents a good opportunity for anyone looking to get life insurance.


Disability Insurance – Some insurance companies are also waiving the medical exam and blood/urine testing for disability insurance as well. Though this may not be as big of a benefit because in most cases they will still review medical records. Where this will be most advantageous is for applicants who have a history of good health.


As always, it’s necessary to consider how any potential change will affect your overall financial position. If you would like to explore any of the aforementioned ideas and how they relate to your personal situation please let me know.


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