Recently Divorced? Tax Strategies to Save Money in 2020

Contributed by: Jacki Roessler, CDFA®

It’s an opportune time to discuss tax planning for the recently divorced. Let’s turn to a professional, my colleague Matt Trujillo, CFP®, for his year-end tax tips. Many of my clients have the benefit of working with my colleague Matt for their post-divorce financial planning needs. Matt is an enthusiastic advocate for clients when it comes to tax savings.

Right now, newer divorcees may be in a unique position to take advantage of money-saving tax strategies in 2020. 

Although they may be receiving substantial income, much of it might be non-taxable. Like child support for example. Any spousal support that began after January 1, 2019, is also treated as a non-taxable income. As some divorcing clients transition back into the workforce over the next few years, they may find themselves in the lowest tax bracket of their life. Low tax brackets can be used to an investors’ advantage when they have tax-savvy advice. 

1. One of Matt’s key strategies is converting traditional IRA dollars into Roth IRAs. How do Roth Conversions save taxpayers over the long term? Money converted is treated as ordinary income. The long-term benefit of Roth IRA accounts is that the money grows income tax-free versus income tax-deferred growth in regular IRAs. When it’s withdrawn in retirement, there is no tax due. Plus, there are no required minimum distributions (RMDs) on Roth IRAs whereas RMDs are required beginning at age 72 in Regular IRAs. So while taxes are due at the time of conversion, Matt reminded me that clients in transition can take advantage of “locking in” their lower tax rate today by converting IRAs when they are in an extraordinarily low tax bracket. Of course, this doesn’t make sense for every divorced person, and often, it takes some careful planning that incorporates converting a set amount each year for years to be the most tax-efficient.

   Money converted into Roth IRAs must come out of the regular IRA by the end of the year to qualify.

2. Another important strategy Matt employs is tax-efficient investing which involves tax-loss harvesting, tax gain harvesting, and appropriate asset allocation. Many divorced clients don’t realize the amount of money they lose on tax-inefficient investing; what is often referred to as “tax drag”. Loss harvesting involves selling positions that have decreased in value to realize a “capital loss” that offsets any capital gains realized in the same tax year. Losses can even be realized today and “carried over” to future tax years. With the market performance this year, many investors will have to report significant mutual fund capital gains. Offsetting gains with losses can save immediate dollars today. 

   Matt shared with me that tax-efficient asset allocation strategies are a key component of smart investing that novice investors may not be aware of. For example, do clients own municipal bonds and low turnover funds inside of their IRA accounts? These types of assets are best utilized in taxable accounts where their low anticipated return is in correlation with their tax efficiency. Holding them inside of retirement accounts is an unnecessary redundancy that may limit growth opportunities. 

The greatest takeaway for every new divorcee is that they should sit down with their financial advisor and tax professional to determine what they can do right now. If you wait until 2021, you may be leaving money on the table that could be in your pocket.

Any opinions are those of Jacki Roessler and Matt Trujillo and not necessarily those of Raymond James. This material is being provided for informational purposes only and is not a complete description, nor is it a recommendation. While we are familiar with the tax issues presented here, as financial advisors with Raymond James, we do not provide specific tax advice. You should speak to the appropriate tax professional in regards to your particular situation. All investing involves risks, including loss of principal amount invested. No investment or tax strategy can guarantee your objectives will be met. Prior to making an investment decision, please consult with your financial advisor about your individual situation.

Want to “Go Paperless” for Fund Prospectuses?

Contributed by: Nicholas Boguth

If you’d prefer not to receive fund prospectuses by mail, there is a way to enroll in a paperless option.

Check the front of the envelope that you receive from Raymond James. It will have the instructions pictured below. There will be a box in the top right corner with a 20-digit number in it. Go to FundReports.com or call (866) 345-5954 and enter the 20-digit code.

From there, you have the 3 options below to choose from:

1. “Go Paperless” – to receive the prospectuses by email.

2. Receive a “Notice” – rather than the full prospectus, this will be a smaller piece of mail letting you know that a prospectus is available online if you’d like to access it.

3. Receive a “Paper Report” – to continue to receive the full prospectuses by mail.

Having trouble?

If you are a current client or have a Raymond James account, please give us a call. If not, we suggest calling the customer service number on your statement or calling your financial adviser.

If you are interested in hiring a financial adviser, give us a call! The Center is a financial planning firm based in Southfield, MI that serves clients nationwide.

What Are The Hidden Costs Of Buying A Home?

Contributed by: Robert Ingram, CFP®

Today’s historically low-interest rates can mean a more affordable mortgage payment. However, when buying a home within your budget, it’s important to consider the costs beyond the mortgage.

Let’s begin with the costs to purchase a home.

Even while carrying a mortgage, you will need to make a down payment. While there are low down payment loans, try to put down at least 20% of the purchase price. Otherwise, your loan may have a higher interest rate and you could face additional monthly costs such as mortgage insurance.

You will have closing costs, which can include things such as loan origination fees for processing and underwriting the mortgage, appraisal costs, inspection fee, title insurance, pre-paid property taxes, and first year’s homeowner’s insurance. Generally, you should expect to pay between 3-5% of the mortgage amount.

Now, you will have ongoing costs to live in your home.

Annual property taxes average about 1% of the home value nationwide, but the tax rates can vary widely depending on the city or town. Keep property taxes top of mind when you are looking at different communities.

Homeowner’s insurance is another annual cost that not only depends on the value of the home and the contents within it you are covering, but also on the state and local community. This cost generally ranges between $500-1,500 per year, sometimes more.

If your home is a condominium or a single family home, you should expect annual or monthly homeowner’s association fees that cover the care of common areas, the grounds, clubhouses, or pools. Depending on the number of amenities and of course the location, average fees range from $200-400 per month.

While you may be used to paying some utilities as a renter, the size of your new home could significantly increase your utility rates. Going from an 800 square-foot apartment to a 2,500 square-foot house could double or triple the costs to heat it, cool it, and to keep the lights on. Add your local area water and sewer fees and your utilities could easily reach $500 per month or more.

Going from renting to homeownership also means having to maintain the new home (both inside and out). Things can be regular ongoing maintenance like lawn care and landscaping, or larger projects like painting, roof repair, furnace, and appliance replacement. Consider the tools and equipment you would need to buy or the services you would hire to do the work.

Finally, there is another hidden cost that can put a dent in your budget, filling up the house.  A home with more rooms can mean more spaces that “need” furniture and other decorative touches. The costs of furnishings can be several thousands of dollars to tens of thousands of dollars. Without proper planning, it can be all too easy to rack up those credit card bills and have a mountain of debt as you move into your new home.

Robert Ingram, CFP®, is a CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® With more than 15 years of industry experience, he is a trusted source for local media outlets and frequent contributor to The Center’s “Money Centered” blog.

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This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of Bob Ingram, and not necessarily those of Raymond James. Raymond James Financial Services, Inc. does not provide advice on mortgages. Raymond James and its financial advisors do not solicit or offer residential mortgage products and are unable to accept any residential mortgage loan applications or to offer or negotiate terms of any such loan. You will be referred to a qualified professional for your residential mortgage lending needs.

Top 3 Reasons Why You Need A Financial Planner

Contributed by: Josh Bitel, CFP®

1) Financial planning is complicated, but taking advice from a professional is easy.

In the age of technology, where a vast array of resources are at our immediate fingertips, “do-it-yourself” has become a much more popular strategy among Americans. For most projects, DIY is great for cost savings, but in the world of finance, this is not always practical. In financial planning, daily monitoring of your investments is sometimes required. Consider the current pandemic, with market volatility all over the map, investment opportunities can come and go in the blink of an eye. If you aren’t keeping a close eye on your finances, these opportunities can be missed. Most DIY investors already have a full-time job, so they simply do not have the time capacity that a financial planner has. Not to be overshadowed by the technical aspects of financial planning, behavioral finance is arguably just as important. As a third party, a financial planner can help mitigate the emotions that go into investing.  As my colleague eloquently wrote, investing is a lot like being a sports fan, and your financial planner can help you stay the course when the going gets rough.

2) No matter how simple or complex your financial issues may seem, an advisor can help.

Many people I’ve spoken to seem to think that financial planning is only required when you have a complex financial picture. However, this is a misguided belief, most people seek out financial help far too late in life. Financial advisors, especially CFP® professionals, are trained to evaluate both simple and complex issues and map out various routes for the best financial future. Another common belief is that financial advice is only needed when you are about to retire, however some of the most productive conversations I have had with clients have been centered around about getting on the right path early and setting your finances on cruise control.

3) Financial planning is not “only for the rich”.

One response I frequently hear that makes me squirm in my seat is that “financial planning is only for the wealthy”. Financial planning can be useful in several life events, such as a change in marital status, a job change, a growing family, or even just simply feeling overwhelmed with your financial matters. The objective of financial planning is to set someone on a path to reach their financial goals. Regardless of where you start or how large your goals may be, accomplishing those goals is what matters. Whether it be saving for a home, understanding your retirement plan at work, or establishing a debt payoff plan, a financial planner can help you make sure all your bases are covered.

Josh Bitel, CFP® is an Associate Financial Planner at Center for Financial Planning, Inc.® He conducts financial planning analysis for clients and has a special interest in retirement income analysis.

Will Social Security Recipients Get A Raise In 2021?

Contributed by: Kali Hassinger, CFP®, CDFA®

Social Security benefits for nearly 64 million Americans will increase by 1.3% beginning in January 2021. The adjustment is calculated based on data from the Consumer Price Index for Urban Wage Earners and Clerical Workers, or CPI‐W, through the third quarter. This cost of living adjustment (COLA for short) is among one of the smallest received, other than when the adjustment was zero.

The Social Security taxable wage base will increase to $142,800 for 2021, which is a 3.7% increase from $137,700 in 2020. This means that employees will pay 6.2% of Social Security tax on the first $142,800 earned, which translates to $8,854 of tax. Employers match the employee amount with an equal contribution. The Medicare tax remains at 1.45% on all income, with an additional surtax for individuals earning over $200,00 and married couples filing jointly who earn over $250,000.

Medicare premium increases have not yet been announced, but trustees are estimating Part B premiums will increase by about $9 or less per month for those not subject to the income‐related surcharge. Unfortunately, the Social Security COLA adjustment is often partially or completely wiped out by the increase in Medicare premiums.

For many, Social Security is one of the only forms of guaranteed fixed income that will rise over the course of retirement. The Senior Citizens League estimates, however, that Social Security benefits have lost approximately 33% of their buying power since the year 2000. This is why, when working to run retirement spending and safety projections, we factor an erosion of Social Security’s purchasing power into our clients’ financial plans.

Kali Hassinger, CFP®, CDFA®, is a CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® She has more than a decade of financial planning and insurance industry experience.

The Center Celebrates 35 Years In Business

Contributed by: Center for Financial Planning, Inc.®

35 years…another milestone reached! We had big plans to host an outdoor client appreciation event, but due to the unexpected Covid 19, we were forced to adjust.

Plans shifted to holding our first-ever virtual event. Clients and friends were invited to enjoy a Detroit History Tour presentation. We chose to take a Detroit Zoos tour (out of several interesting options). While everyone knows and loves the zoo located in Royal Oak…the city wasn’t its first home. The journey began in 1895 on Belle Isle.

As many attendees have visited the zoo over the years, it was a wonderful opportunity to look back in time and feel nostalgic. We definitely learned a thing or two…like how a monkey could be purchased for just $6 and how the cost to feed the animals drove the Belle Isle zoo to bankruptcy.

The virtual experience was made possible by Detroit History Tours.

A Message From Our Managing Partner:

We are excited to celebrate 35 years and thank you all for your continued confidence and trust. Serving you is an awesome responsibility and privilege, so thank you for allowing us to be of service. I’d like to share just a few of the highlights of The Center’s journey.

The Center was founded in 1985. Many of our clients began their relationship working with one of our founders, Dan Boyce, Marilyn Gunther, and Estelle Wade.  Make no mistake, these three were financial planning pioneers. Now strategies, tactics, and yes people have changed since 1985 – but the foundation, values, and pillars such as focusing on the financial planning process, creating comprehensive plans that encompass every aspect of a client’s financial life and well-being, focusing on long term relationships, and placing clients interest first have remained the same.

One of my favorite quotes is by Vivian Greene, “Life isn’t about waiting for the storm to pass. It’s about learning to dance in the rain.”  At the risk of stating the obvious, 2020 has been quite a storm. The health and economic fallout of Covid 19 has been trying for all of us. There have been other challenging times in our 35-year history. While The Great Recession in 2008-2009 did not include a pandemic – it certainly had severe economic and financial instability; all portfolios were impacted, and it was the first time in The Center’s history in which revenues dropped significantly from the preceding year. Back then, like today, we avoided layoffs and kept our entire team intact to ensure clients were well taken care of. There will be other challenging times and fortunately, The Center has experience helping families survive and thrive during these moments. We have always placed people, clients, and team members, over profits and we will continue to do so in the years ahead.

Over the years, with proper planning, our clients prospered, we earned the right to attract new clients, and the firm continued to grow at a measured pace. This was a time when we spent considerable time planning out Marilyn and Dan’s retirement transition for 2014 and 2015. We were very intentional in crafting plans to ensure that clients would receive the same world-class service that our founders provided as many of you began working with new lead financial planners. This was also a time when we moved our office up the street to our current location – our new space reflects our values of teamwork & collaboration and real & down to earth.

So here is what the firm looks like today. We are a team of 30 dedicated, driven, competitive, and highly credentialed professionals. We serve over 800 clients and are responsible for managing assets in excess of $1.2 Billion. 

Financial planning done right has the power to improve lives. And from the beginning, The Center has been committed to building a sustainable business based upon sound fiduciary practices. That is, what is in the best interests of you, our clients, drives our decision making and service offering. Saying that we follow a fiduciary standard or place clients first is not a tag line – it is at the core of who we are.  Thank you again for allowing us to serve you and thank you for being a part of our 35th anniversary!

Timothy Wyman, CFP®, JD

Managing Partner

The Center's Complete Third Quarter 2020 Investment Commentary

Contributed by: Angela Palacios, CFP®, AIF®

The year 2020, unlike 20/20 eyesight, has brought investors everything but clarity when it comes to stock markets and the economy.

Watch the video below or read the complete summary for a recap of our thoughts and reflections on the year and what we are paying attention to in the near future.

As if normal volatility of an election year wasn’t enough, the Covid-19 pandemic continues to linger and cases are back on the rise since early September. There is massive uncertainty over the spread of the virus, vaccine trials, business solvency, Americans’ jobs, and government stimulus that will continue to weigh on stock prices.

Despite the volatility and uncertainty surrounding investors through the first three quarters of the year, the performance of some major asset classes remain positive. Large U.S. stocks have ridden the backs of technology and consumer discretionary stocks (or should I say Apple (AAPL) and Amazon (AMZN)?) bringing the S&P 500 to +5.57% through quarter-end (since 12/31/2019). U.S. bonds represented by the Barclays U.S. Aggregate Index are up almost +6.8%, and gold is having a banner year up over +24%.  Not everything is rising though. International developed, emerging markets, and small-cap stocks remain in negative territory with three months of trading to go.

Apples are in season…

Our favorite Apple IOS14 update is the new home screen widgets. It is likely tempting to add the large widget to watch updates on the S&P 500, Dow, and NASDAQ performance with every phone notification throughout the day. We understand you watch these numbers too, particularly during the volatility of 2020. Simply watching index returns doesn’t tell the entire story though. In previous years, the largest 5 to 10 companies’ performance contributed to the S&P’s annual return much less than they have this year. As of September 30th, the top five most heavily weighted stocks within the S&P 500 year-to-date (YTD) performance was 35%, with the overall YTD S&P 500 (price return) at 4%. The 495 other companies included in the S&P 500 returned -3% collectively.

The domination in returns has come from household names such as Facebook, Amazon, Apple. Alphabet(Google) and Microsoft.  While many fear this rhymes with the technology bubble of 1999, these companies are in very different positions than they were at that time.  Heavy cash on the balance sheets and lower Price to Earnings ratios (P/E ratios) now versus then speak to some of these differences.

Politics and Pandemics too intertwined for comfort…

The headlines to watch during these final months of 2020 will be centered on two topics: the November election, and the Covid-19 pandemic. We’ll be watching both closely and constantly reviewing new information as it pertains (or doesn’t) to your financial plans.

One major source of uncertainty following the elections will be any potential new tax code, but there may be less to worry about than you’d think when it comes to potential changes. We are assuming a tight election, and, while we are not in the business of predicting elections, we can gain insight from the past when it comes to potential tax changes. If President Trump remains in office, we’d be looking at 4 more years of the same, but even if the Democratic Party sweeps the executive and legislative branches of government – it may be a tough sell to raise taxes amid a pandemic/recession. Despite a historically low tax environment, there are a lot of businesses that are already struggling and unemployment remains high. While unemployment is off of its record high near 15%, it is still sitting near a historically high measure of 7.9%. This does not favor tax increases. Looking back to when President Obama took office in ’09, we were coming out of the Great Financial Crisis and it took years before there were any significant tax hikes.

More political uncertainty: the Supreme Court justice nomination following the passing of Supreme Court Justice, Ruth Bader Ginsburg. The Senate is currently controlled by Republicans, and they are pushing to get President Trump’s nomination, Amy Coney Barrett, sworn in before the election. The only problem is, Covid-19 may get in the way of a Senate vote as well, with several key members testing positive for Covid-19. With President and First Lady Trump testing positive for the virus, Washington D.C. is on high-alert to protect the health and safety of our government officials. Uncertainty about when the Senate will be able to meet and continue the nomination process may cause some market volatility.

As always, we urge you to check out our blog where we have wrote on many of these topics repeatedly over the years. History doesn’t repeat itself, but it often rhymes, and it has told us that staying the course despite ever-looming market uncertainty has paid off time and time again. This may feel even harder during an election year, but remember that history has shown political parties have no bearing on long-term stock performance. Now stay healthy, stay invested, and go vote!

Angela Palacios, CFP®, AIF®, is a partner and Director of Investments at Center for Financial Planning, Inc.® She chairs The Center Investment Committee and pens a quarterly Investment Commentary.

The foregoing information has been obtained from sources considered to be reliable, but we do not guarantee that it is accurate or complete, it is not a statement of all available data necessary for making an investment decision, and it does not constitute a recommendation. Any opinions are those of the author, and not necessarily those of Raymond James. Investing involves risk and you may incur a profit or loss regardless of strategy selected, including diversification and asset allocation. Keep in mind that individuals cannot invest directly in any index, and index performance does not include transaction costs or other fees, which will affect actual investment performance. Individual investor's results will vary. The S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. The Bloomberg Barclays US Aggregate Bond Index is a broad-based flagship benchmark that measures the investment grade, US dollar-denominated, fixed-rate taxable bond market. Any opinions are those of Angela Palacios, and not necessarily those of Raymond James. Expression of opinion are as of this date and are subject to change without notice. There is no guarantee that these statement, opinions or forecasts provided herein will prove to be correct. Individual investor’s results will vary. Past performance does not guarantee future results. Rebalancing a non-retirement account could be a taxable event that may increase your tax liability The forgoing is not a recommendation to buy or sell any individual security or any combination of securities. The companies engaged in the communications and technology industries are subject to fierce competition and their products and services may be subject to rapid obsolescence. Gold is subject to the special risks associated with investing in precious metals, including but not limited to: price may be subject to wide fluctuation; the market is relatively limited; the sources are concentrated in countries that have the potential for instability; and the market is unregulated.

How Are Fearless Billionaires On The Campaign Trail?

Contributed by: Jaclyn Jackson, CAP®

If you thought this blog was about Donald Trump, your leg was just pulled. This candidate’s name starts with a “J.B.”, that’s right – Jeff Bezos (pulled again). On August 26th, the Amazon Founder and CEO became the first person ever worth an unprecedented $200 billion. This happened just before 2020 required the best August returns since 1984 and US markets recovered from deep pandemic-facilitated lows by exceeding mid-February pre-pandemic highs. All the while in true Tale of Two Cities form, a global pandemic has millions of Americans reconciling above-average unemployment rates and highlighted a variety of social disparities through seemingly targeted infection rates. Amazon, specifically, has received unfavorable headlines during the pandemic as essential workers strike against the alleged lack of virus-related safety precautions taken by the company and unsatisfactory compensation.

Democratizing Capitalism

Although wealth inequality isn’t new, the pandemic amplified its implications. (As of writing this) Presidential elections are approaching. Like most elections, economics lead the ballot. Observing recent history’s populist-leaning politics, Pershing Square Capital founder and billionaire hedge fund manager, Bill Ackman suggests democratizing capitalism in his latest letter to investors. In the letter, he touted capitalism as the best system for maximizing the size of the economic pie. Yet, warns the lack of wage growth for most Americans facilitates Black Swan-like risks for investors as lower/middle-income Americans advocate radical change that overhauls modern capitalism. Essentially, social unrest poses a threat to investors. Ackman’s solution was creating programs that widen market participation (and subsequent gain participation) to individuals who can’t traditionally invest thereby restoring faith in capitalism. 

Aligning Interests

Which brings it back to Jeff Bezos. Many anticipate the CEO will follow Tesla and Apple’s lead, by splitting Amazon stock. On the surface, stock splits are superficial. Technically, they don’t equate to any value change for a company. However, stock splits have historically been used to signal a company’s strength or hint that something good might be on the horizon for the company. As illustrated by the latest Tesla and Apple stock splits, many investors take note and likely load up on company stock consequently boosting the company’s value.

So, what does Jeff Bezos splitting Amazon stock have to do with Bill Ackman’s thoughts on saving capitalism? Amazon is one of the few businesses to profit during the pandemic directly contrasting the experience of small business owners and the general public alike. It becomes more challenging for the average person to praise Jeff Bezos’ extraordinary wealth when their experience mirrors Amazon employees who are frustrated by the inability to work safely or receive adequate compensation. At the current stock price, many cannot join in on Amazon’s success. By lowering the individual stock price, a stock split increases access to a wider range of investors. More participants in Amazon’s meteoric rise could increase their customer base, increase customer loyalty, and even discourage (at least in public opinion) attempts to break up the company as it moves into a monopolistic stratosphere. Perhaps designing a way for Amazon’s essential workers to more easily invest in the company could solve compensation distress. Jeff Bezos wins the day by making Amazon stocks more accessible; he sets his business and himself up to potentially gain more wealth and with a wider range of investor participants, he gets buy-in from the average individual. Bezos’ success becomes the average person’s success and their interests align in capitalism; Ackman’s resolution in practice. 

No matter the political view, most Americans would agree that democracy is the blood and bone of our nation. Whether we are practicing democracy through voting or considering new ways to exercise democracy (as Bill Ackman explored), we are uplifting the country’s greatest strength.

Jaclyn Jackson, CAP® is a Portfolio Administrator at Center for Financial Planning, Inc.® She manages client portfolios and performs investment research.

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The forgoing is not a recommendation to buy or sell any individual security or any combination of securities. Be sure to contact a qualified professional regarding your particular situation before making any investment or withdrawal decision. The information contained in this blog does not purport to be a complete description of the securities, markets, or developments referred to in this material. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Jaclyn Jackson and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Individual investor's results will vary. Past performance does not guarantee future results. Investments mentioned may not be suitable for all investors.

"So you want to talk about race" Center Book Club Discussion

Contributed by: Center for Financial Planning, Inc.®

Founded in the midst of quarantine, the Center team stayed connected with its first ever book club. Not only has COVID-19 changed our reality, but so has the Black Lives Matter movement. We desired to further educate ourselves on that topic by reading So you want to talk about race by Ijeoma Oluo.

Oluo is a Seattle-based writer, speaker, and (self-proclaimed) Internet Yeller. She was raised by a white single mother and became a single mother herself to two mixed-race sons at a young age.

In the book, Oluo argues that America's political, economic, and social systems are systematically racist. She provides advice for discussing race-related subjects. While published in 2018, the book received renewed attention following the killing of George Floyd in May 2020.

Some Center Team members share their thoughts below:

“A much greater appreciation for how the lived experiences of others are so often very different than my own and a better understanding and greater urgency for how to work together to make the world a better and more equitable place.” -- Lauren Adams, CFA®, CFP®

“The intention of our actions (although important) is not as important as the impact of our actions. We are all privileged in some way, whether it be our education, citizenship, having loving parents, or even food to eat. It is not necessarily a bad thing. We can use it to help others. And we learned about the theory of intersectionality which is the interconnected nature of social categorizations such as race, class, and gender as they apply to any given individual or group.” -- Gerri Harmer

“I really enjoyed discussing the book! It required me to stretch myself and think about difficult topics on a personal level. This endeavor was made more comfortable by hearing from others that they were experiencing similar feelings.” -- Jeanette LoPiccolo, CFP®

“I’ve gained a much deeper awareness and understanding for those different than myself. What we say and the choices we make impact the future of those who start with disadvantages. If we work together to take action now, we can make this world a more diverse, dynamic, creative and inclusive place where we’re all on an equal playing field.” -- Sandra D. Adams, CFP®

“The 400 years of oppression that some people in our “fair and equitable” society endured….is shocking. Today, it’s still not fair or equal; there is a significant underlying bias in society that we have not yet found an appropriate remedy for.” -- Matthew E. Chope, CFP®

If you’re looking to challenge your perspective, give this a read! Well, that’s a wrap for the first Center Book Club reading. Until next time!

Any opinions are those of the professionals at Center for Financial Planning, Inc and not necessarily those of Raymond James.

Why COVID-19 Has Clients Postponing Retirement

Contributed by: Sandra Adams, CFP®

Going into 2020, none of us had any idea what we were in for. The coronavirus came upon us like an unanticipated hurricane. It is sticking around much longer than anticipated and is threatening to be around indefinitely. Many of us are on the verge of “pandemic fatigue”! While some have felt a short-term economic impact, any longer-term impacts will likely show themselves later.

For most clients nearing retirement, their goals are very much on track given the minimal impact of the virus on investment markets, employment, and savings SO FAR in 2020. However, the bigger concern for most clients looking at retirement is what their actual retired life may look like in the new world of COVID-19. 

Many clients have been living in a world of quarantine. They are working remotely, socializing less, and communicating mostly via phone/video. The new world lacks the pleasures of travel, dining out, and group events. While this eases the budget, it’s not the life anyone desires to live every day in retirement. The retirement dream that clients work so hard to achieve is one in which they are traveling, visiting family, socializing with friends, volunteering, pursuing hobbies outside of the home, maybe taking classes, and/or pursuing a new job or career. Generally, none of these are activities that will be COVID-compliant, at least until the virus is under control or a vaccine is developed. For this reason, several clients have expressed the desire to delay their retirement date and continue working if we are still living in a COVID world. After all, “Why would I want to retire and sit at home in quarantine?”

As long as clients are working towards retirement, important financial goals should be:

• Continue contributions to employer retirement plans

• Build reserve savings to serve as a startup for future retirement cash flow

• Carefully track budget cash flow to make sure you have a good sense of what you will need for retirement income

• Reduce debt as much as possible before retirement

Its times like this that I’m reminded that for many, the non-financial side of the retirement decision is just as important as the financial side. 

If you or someone you know is approaching retirement and would benefit from having a conversation with one of our financial planners, please let us know. We are always happy to help!

Sandra Adams, CFP®, is a Partner and CERTIFIED FINANCIAL PLANNER™ professional at Center for Financial Planning, Inc.® and holds a CeFT™ designation. She specializes in Elder Care Financial Planning and serves as a trusted source for national publications, including The Wall Street Journal, Research Magazine, and Journal of Financial Planning.