Client Newsletter 4Q20
Dear Ambassador Family,
I hope each of you and your loved ones are healthy and well. It has been an incredible year.
As we enter the fourth quarter, I want to touch on a few Issues where clients have sought our help.
Early Retirement
Several of our clients have had to make the hard decision to retire early, take a severance package, or even consider other employment options.
Here are some of the challenges they face:
- Getting close to retirement age
- Already had a scheduled retirement date
- Forced into an early retirement
- Given a choice and needed our help to figure out the best option(s)
No matter the situation, people who talked to us early on were able to plan for this huge change(s).
Some areas we focused on were Social Security, medical coverage, taxes, and cash flow planning.
We helped answer difficult questions like:
- How will retiring early impact my cash flow?
- When should I take Social Security?
- How will this impact my tax situation?
A lot of people wait to work on a plan because they’re busy and tomorrow is always an option. 2020 has taught us that tomorrow can come faster than one might think.
You might find yourself in a position where you have to make hard decisions and sacrifices.
We can’t predict the future, but we can help you prepare for possible outcomes and navigate the challenges. We’re here to help you make the best decisions amid uncertain times.
For years, the threat of forced early retirement was a looming fear for several of our clients.
Then the pandemic came, and a majority of those fearing early severance found themselves in early retirement.
One of our clients knew early retirement was inevitable. In preparation, we kept in touch every step of the way. Because of early planning, we were always one step ahead.
We were able to coach our client for conversations with their employer: what questions to ask, what kinds of things to say, or even what not to say. We researched their pension plan, Social Security options, Medicare, and other benefit issues.
All of this planning helped us negotiate a few extra months of work and a better severance package. Our client was well-positioned both emotionally and financially to enter retirement with confidence.
We can help you to make early retirement a better opportunity, rather than a headache.
Upcoming November Elections
As the election draws nearer, we have been reviewing each portfolio and taking off appropriate risk. We don’t know what the election will look like and, depending on the outcome, the results could have severe consequences.
Knowing this, we have been strategizing possible scenarios to protect you. Right now, we have multiple scenarios to put in place once we know the election results.
Tax Planning
We have worked with many clients on tax planning this year. If you can afford it, we are encouraging our clients to consider doing more Roth conversions.
If you have not taken your RMD for 2020 yet and do not need it, remember, you are not required to.
There is much uncertainty going forward. We are watching the political environment and who will control the Senate and the House. Potential risks might include higher tax rates, big changes in the tax code, and a reduction in purchasing power.
Higher market volatility is also possible, which usually tends to generate higher capital gains.
Real Estate
I am becoming increasingly concerned with real estate. Many markets appear overpriced, especially with commercial real estate.
Factors that are pumping up home prices include low-interest rates, nationwide exoduses from highly populated cities with high income taxes, cash offers, and buyers who are willing to trade financial security for a home.
We are carefully watching the real estate market.
One client in particular vowed to never repeat this experience.
To protect her freedom, she sought our help to plan her escape to a better retirement.
We spent hours on the phone examining financial goals and the positioning of her assets. We also investigated various financing options for a new home.
Today, she is moved in and surrounded by a variety of new, friendly neighbors. We helped her regain her independence while keeping access to appropriate help when she needs it.
Unfortunately, we know many more people who are still trapped in their rooms after six months. Some may have seen temporary freedom, only to lose it again as Covid-19 cases spiked.
If you or a loved one are concerned about a similar situation, let’s talk.
Assisted Living
We have heard from a number of our clients in independent or assisted living that they have felt like prisoners in their rooms. Due to COVID-19 restrictions, many of them were looking for alternative options and the opportunity to regain their independence.
Some of our clients decided that moving would be the best option. We helped guide them and work through the financial challenges.
After a year like 2020, many people will reassess whether independent living, assisted living, and nursing homes are best for them or their loved ones. The pandemic showed that people in these facilities are not as safe as previously thought. Indeed, COVID-19 exposed that care facilities are the most at risk.
Summary
We are here for you. Please talk to us!
Maybe you want to share about changes in your life or concerns about taxes. Perhaps you need help for yourself or a loved one regarding assisted living. Whatever your situation, you deserve to understand your options (physical and financial). We can help you plan your future.
We are being vigilant. There are a lot of moving parts that could impact whether we have a good market or a bad one. I don’t want to bore you with the technical details, but know we are considering different scenarios.
Let us help you plan and prepare in the midst of uncertainty.
Sincerely,
Petr Burunov, CFP®
President / Wealth Strategist