In March, we were inundated with updates about the coronavirus and the unknown ramifications to follow. In the same month that the NBA was postponed, children were sent home from school, toilet paper fled the grocery store shelves, the US stock market had three of the worst days in US history.

Behind the scenes

Unlike the year 2020, your 401(k) account is routine and emotionless. If there is no user interference (yes, that is you), your account will continue to invest in the stock market every paycheck. A 401(k) account can help alleviate market-timing decisions by adopting an investment strategy called dollar-cost averaging. Instead of waking up in the morning and deciding “is today a good day to buy some stock?”, your 401(k) systematically makes those timing decisions for you.

To review the ease of these timing decisions, I wanted to show investors what happened if you made a $50.00 contribution to your 401(k) account every paycheck during 2020. In this scenario, we assume employees were paid every two-weeks (starting on January 3, 2020) and invested in the Vanguard Target Retirement 2055 (VVFVX) fund.

Slowly building a foundation

These dollars represent the trading value of the Vanguard Target Retirement 2055 (VVFVX) on specific days. In this exercise, the lowest trading price was $31.16 on March 20th, and the highest trading price was $48.55 on November 27th.

Thank you, automation.

As you can see, the best time to invest in the stock market this year (March) was also arguably the most uncertain and scary time to be an individual investor. From a February 21st paycheck to a March 6th paycheck, the price of this target date fund dropped 9%. From a March 6th paycheck to a March 20th paycheck, the price dropped 21%.

When prices were falling, your 401(k) account bought shares at a lower price without panicking, consulting the news, or making impulsive decisions. For that reason, we should give 401(k) accounts a standing ovation for being a reliable, unemotional investment vehicle this year.

Let 2020 be a reminder that if your boxes are checked, outsourcing and automating your account is one way to ease your emotions.

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A week ago, I came across a chart that does a nice job representing the call volume we have been experiencing at Human Investing in 2020. While the amount of calls we receive does not equal the amount of times people search for CNBC, the two data points are certainly correlated.

The image is titled, “When Markets Fall, We Search”, and ultimately shows that individuals have been more likely to seek out CNBC (market related news) any time the market has fallen over the last 15 years.

I’d argue that you could replace ‘search’ with ‘speculate’ and both the phrase and the chart would remain true, “when markets fall, we speculate”. Given the state of current affairs and the upcoming presidential election, individuals are worrying about their retirement accounts. A growing number of conversations our team has with individuals inside of retirement plans sound something like this:

Caller: “I’m fearful of (X) candidate winning the election because I’m affiliated with (Y) political party (both sides are saying this). Additionally, there is uncertainty around COVID, and I don’t feel comfortable staying invested during these unpredictable times. I’d like you (Human Investing) to help provide me with a more conservative investment recommendation.”

Before I respond with market research, I want to reiterate that you aren’t alone with your concerns and fear. We hear you. At the same time, before making any decisions related to your portfolio, take the time to think through all the angles of your decision. The rest of this post will hopefully provide some anecdotes in your process. Here are few thoughts about what it looks like to plan for the end of 2020 and into 2021. Remember, it is better to plan than to speculate.

The correlation between your Politics and Your Portfolio

Generally speaking, there is low correlation between political parties and the stock market. However, that statement is easy to say and difficult to live out in practice. Tread lightly when reading articles that try to align which stock/sectors to own with the political party that takes office. This article from 2016 couldn’t have been more wrong prognosticating that energy companies (specifically Exxon Mobile) would be top performers for the proceeding four years. It goes without saying this was a massive miss.

The bigger influence: Are you a speculator or planner?

If you think like a speculator, you will make rash decisions around your investment accounts and have no plan for re-entering the market if you move your dollars to cash or to a conservative investment.  

If you think like a planner, you will use both quantitative and qualitative measurements to evaluate your decision. For example:

• If you have a long-term horizon (greater than 15-20 years), political changes should not impact your investment decisions.

• Irrespective of the political environment, review if your account is too aggressive or too conservative for your financial landscape.

• Have a clear understanding of both candidate’s tax policies. Changes to the federal tax code should be a factor in your financial planning for the remainder of 2020 and into the future. If you are working with a CPA and/or Financial Advisor, make sure they are staying abreast with any impactful tax code changes.

  • Biden Tax Proposal

  • Trump Second Term Tax Ideas
    

Ditching The Market

Trying to time the market when negative news arises (or the anticipation of negative news) is a dangerous game to play. Luckily, we have a recent case study of how dangerous it can be. From January 1st to March 23rd, the stock market fell 30%. Since then, the market has recovered all losses and then some. If you were thinking like a spectator, it would have been easy to create a narrative around mid-March to pull your money out of the market and wait for greener pastures. If an investor did so, most likely that investor is still waiting for the market to dip and has missed out on the recent recovery as indicated by the second chart.

If you think like a planner when the market is more volatile, sometimes taking some form of action itches a behavioral scratch. Here are some ways to take action while not compromising your account:

• Raise your contribution in your retirement account to take advantage of a decreasing market (buying more shares at discounted prices).

• Open a small “fun money” account to track if your predictions are correct.

• If the market does significantly drop, look at converting pre-tax dollars to ROTH.

The concept of thinking like a speculator vs. thinking like a planner represents the cultural moment we are living in right now.

Speculating = headlines, fast moving social media, and the potential for instant gratification.

Planning = well thought out strategies that take time and often require no action.

As we head into this season of elections and COVID uncertainty, I hope this post provides some perspective on how to approach your portfolio. As always feel free to reach out to our team to talk through your thought process. We are happy to help!

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Since Human Investing has shifted to remote work for 5 months, I wanted to peek into what daily life looks like for two of our fabulous and industrious moms. Shelly Chase and Eve Bell are candid, funny, and share some family tips!

JILL: Shelly, you are a seasoned Client Service Specialist, so how has it been working remote these past 4 months while managing your work and your family?

SHELLY: Multi-tasking is key! I’m never far from my computer while working from home, and when the “ding” comes in for an email or message (if I’m not right in front of it), it’s a sprint back to the computer so I don’t miss anything and reply in a timely manner. Of course, I sometimes trip over the dog….

JILL: That is a funny image! I’m sure all dogs—yours included—are wondering why we’re all home, and if it means they get more snacks. Eve, as our Workplace Advisory Administrator and young mom, you have also had a lot going on. What was your before- and after-work routine with your young daughter prior to COVID, and how has that changed?

EVE: Pre-COVID our nanny picked up our daughter every morning, and my husband and I took turns picking her up after work. We were in for a shock when we all went remote on March 15th. Having an active little toddler means my husband and I are re-evaluating routines every few weeks and upping our communication game. Our almost 2-year-old is home most days, so we have to communicate A LOT about our meeting and project schedules, work together to make adjustments, and have at least one parent watching out at all times, so that our toddler isn’t having a tea party with the dog’s food and water.

JILL: What a full plate, Eve! How long did you think you would be working remotely? I would love to hear your initial thoughts.

EVE: I thought it was only going to be for two or three weeks! I knew it was going to be a challenge, but I Pinterest-ed all the DIY toddler activities and bought a two-week supply of snacks (for both my baby and me).

SHELLY: I kept thinking how can I work from home and stay focused….kids’ noise, dog barking, FedEx knocking…how can I work from the dining room and keep my home life under control while serving our clients?

JILL: Let me say you each have done an incredible job and probably did not realize just how much strength you had within you to manage it all.Shelly, with summer in full swing and school on the horizon, how are you working through the options for schooling and what is top priority?

SHELLY: The top priority is what is best for my almost sophomore son. He did okay with ending the school year online, but it did take a lot of coaxing from mom to keep him on schedule and get his work done. It was recently announced that his school will be online until at least October 30th. I better brush up on my US History facts!

JILL: I really admire you parents; whose kids are in grade school or high school. It’s not an easy feat to work and ensure your child learns new things and retain some of what they have already learned! You have seemed to weather this valiantly but being human, we all know we’ve had moments of struggle. What walls have either of you ‘hit’, what has been the biggest thing you have tackled, and how are you rising above it all?

EVE: The first wall I hit was trying to make a typical 8am to 4pm workday schedule work from the dining room table. Once I recognized that my workday would need to look and feel different, I began adjusting to new routines. As a result, both work and family life got a lot easier to navigate. And then prioritizing! I have had to dig deep, practice more patience, and become laser focused. It has been a funny balance of being super chill about some things (who needs an organized Tupperware drawer anyways) while also pushing myself to strategize and implement new ways to serve clients.

SHELLY: I have been really surprised so far. There has been no dead ends and no walls hit. I have tried to stay focused on doing my best to maintain the same work schedule at home as I did in the office. I am working a bit longer each day since I save time without a commute, but I also have more flexibility. I have grown more confident in my ability to be an earner, mom, maid, cook and as of recent, teacher. I remind myself all day long to take deep breaths and take a little time for myself by walking, listening to my favorite music, or making my homemade salsa.

JILL: Such great, practical advice and wise counsel coming from you both! Thanks for taking time out of your busy days to share your experiences with me. And Shelly, what about that homemade salsa recipe?

SHELLY: I am making it every day now and my family still loves it! It is simple and always delicious. I even think the title fits its appeal. I hope you all try it and add your own flair!

Click here for Shelly’s homemade salsa recipe!

Jill has spent over a decade at Human Investing honing her skills in the areas of service, administration, sales, operations and human resources. As a SHRM certified practitioner, Jill now puts all her past experience to work - ensuring that the Human Investing team is cared for and the operations run smoothly.

Eve helps clients navigate the nuanced and complex landscape of qualified retirement plans by providing plan design expertise and advocating for employers and their employees.

Shelly draws from her 20 years in financial services to uniquely care for clients while meeting the administrative needs of their accounts on a daily basis. She strives to always provide personalized, and honest, and up-to-date client service and plans to continue to love, care and serve our clients for the next 10+ years.

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“In this world nothing can be said to be certain except death and taxes” – Benjamin Franklin.

HERE’S A SNAPSHOT OF HISTORICAL TAX RATES

You can compare 2020’s highest marginal income tax rate to years dating back to 1913. Although this chart is not an all-inclusive story about someone’s individual tax situation, it does suggest that overall tax rates are lower today than they have been in the recent past.

How to Take Advantage

The current tax rates are locked until December 31, 2025, unless there is an update to the Tax Cuts and Jobs Act (TCJA). Without a crystal ball, we do not know where tax rates are heading. However, as this image illustrates, we do know tax rates can increase in the future. 

One way to take advantage of today’s low tax rates is to utilize accounts like a Roth IRA or saving Roth inside your 401k plan.

Do you have questions?

We know that interpreting the tax code is an unpleasant and complicated experience. We have a team of CPA’s at Human Investing who are ready to answer any questions you may have.

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Buckle up. Welcome to the rollercoaster ride of the year.

Find me one person who predicted the magnitude and velocity of the recent stock market selloff and rebound, and I will buy us tickets to Vegas. In 74 trading days, the stock market lost a third of its value and subsequently rallied by more than 40%. (Another friendly reminder that short-term market prognosis is speculative.)

Through discussions of this market phenomenon with clients, friends, and family, I have discovered a disconnect in how investors interpret investment returns. Take the S&P 500 for an example:

From its high on February 19th, the S&P 500 slid by more than -33% over the next 24 market days 📉

Following its low on March 23rd, the market quickly gained in value by more than 40% 🤯

It would appear that as of June 3rd, the market would be up 6.35% for the year (-33.79% + 40.14% = 6.35%). However, this is not the case for our investment account statements.

The reality is that the S&P 500 was still down -7.21%.

Why? Market pullbacks will have a greater magnitude than the market rebound.

This is because the percentage loss experienced in the pullback is based on a larger value than the rebound percentage. Thus, not all percentages can be evaluated in the same way.

An easier way to understand this is through the following example:

Take an account valued at $100,000. Now cut the account value in half (-50%), and its value is at $50,000. What return is needed to bring it back up to $100,000? You would need to double your account (+100%).

So what percentage of growth is needed to make up for a portfolio or market loss?

• A market loss of 1% requires a 1.01% return to get back to its beginning value.

• A market loss of 5% requires a 5.26% return to get back to its beginning value.

• A market loss of 10% requires an 11.11% return to get back to its beginning value.

As illustrated above, the greater the market loss, the greater are the market gains needed to recover.

In terms of the COVID-19 crash, a market drop of -33.79% requires +51.03% of market growth to make up for the loss incurred. 

*Note the exponential increase in the percentage gain needed to recover.

In application, it is important to consider the downside risk of investments with regards to your financial planning needs. Investment downside risk can have a greater detriment depending on an investor’s timeline and cash needs. (See our article on sequence risk here.)

Both patience and an intelligently designed investment strategy are the remedies to market loss. In the history of the US stock market, no matter how great the loss, subsequent market returns have always lead to new market highs. This is a trend we expect will continue.

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Target-date funds do not stop when they reach the target year. For example, Vanguard Target Date 2015 (VTXVX) still exists today even though it is 2020. Your dollars will not disappear!

Instead, target-date funds are designed to continue to serve the assumed age demographic of a specific retirement year. To provide a deeper understanding, we have outlined what will happen to 2020 target-date funds.

Target-date funds are designed one of two ways:

1. “Through” target-date funds: Continue to shift their asset mix (less stocks, more bonds) over a predetermined number of years. The dollars invested in a target-date fund will remain inside the fund.

2. “To” target-date funds: Reach the designated target year and merge with a retirement fund that maintains a specified asset allocation over time.

Either way – “through” or “to” target-date funds continue to be invested, and there is no required action-item for investors once the target year is reached.

2020 Target-Date Fund ExampleS

Since 2020 is a target year; let us look at what will happen to popular target-date funds.

Vanguard Target Retirement 2020 (VTWNX)

Vanguard’s glide path continues through for seven years (in this case 2027) until the asset allocation is 30% stocks and 70% bonds. After the seventh year, dollars merge into Vanguard Target Retirement Income (VTINX).

Fidelity Freedom 2020 Fund (FFFDX)

Fidelity Freedom’s glide path continues through for nearly twenty years (in this case 2040) until the asset allocation is 24% stocks and 76% bonds. After that, dollars merge into Fidelity Freedom Income (FFFAX).

T.Rowe Retirement 2020 Fund )TRRBX)

T.Rowe’s glide path continues through for thirty years (in this case 2050) until the asset allocation is 20% stocks and 80% bonds. These dollars do not merge with another fund, but instead maintain this asset allocation until the investor withdraws all dollars from the account.

AGAIN, YOUR DOLLARS WILL CONTINUE TO BE INVESTED OVER TIME.

The use and protection of retirement dollars (beyond a target year) is embedded in a fund’s lifecycle. Regardless of whether a target-date fund operates ‘through’ or ‘to’ the target year, your dollars will continue to be invested over time.

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This photo was taken before flour and yeast disappeared from grocery shelves.

Love. Care. Serve.

Those were three words Pete Fisher repeated during my interview at Human Investing. So simple, yet so energizing. I left the interview hoping for an opportunity to join Human Investing, a Certified B Corp, but most importantly committed to finding a profession that would combine my analytical background with an opportunity to empower others. 

That is why I am here writing a blog about the ways we, as individuals, can give to others in 2020. If you are thinking of giving financial aid, there is good news for you. Specifically, in the last month, there have been updates to the tax code which expand charitable deductions for all taxpayers, including those who are taking the standard deduction and those who are itemizing deductions this year. In addition to humanitarian motivations for charitable giving, the changes to the tax code also provide financial incentives.

Give and lower your taxable income even more

This section is useful if you are interested in lowering your 2020 taxable income and donating some cash to help others. 

The CARES Act, which passed a few weeks ago, includes a $300 above-the-line tax deduction for cash donations to qualified charities in 2020. This above-the-line deduction is available for taxpayers who use the standard deduction, which is true for most taxpayers. See below for a visual on how this changes a single filer’s tax return:  

My advice for lowering your taxable income and donating cash to help others is the following: 

1. Keep your receipts.

2. Don’t forget to include the donation on your 2020 tax return!

Giving $300 might feel enormous to you, and de minimis for the community. Or it might feel de minimis to you, and impactful for the community. Just remember micro-actions lead to macro changes.  Your $300 will go a long way to help your community.

Good news for taxpayers using itemized deductions

The CARES Act also includes an incentive for those who itemize their deductions. In the year 2020, taxpayers can take 100% of adjusted gross income as a charitable deduction. Before this bill passed, itemized taxpayers could take up to 60%. Note: this rule only applies to cash gifts that go to a public charity. Cash gifts to private foundations are still subject to the 60% rule. 

Tax planning strategies

Our team of CFP’s and CPA’s is also thinking about more complex tax planning strategies these updates could have on your current tax returns. Individuals are limited to a $100,000 qualified charitable distribution (QCD) from their IRA account in 2020. However, the CARES Act includes financial incentives for taxpayers who itemize deductions that allows them to donate and deduct more than $100,000 from an IRA this year. For example, since Required Minimum Distributions are waived for 2020, individuals could still make a taxable withdrawal and give the cash to a qualified charity. This series of events completely offsets taxable income since there is a 100% charitable deduction this year. This scenario is specific for itemized taxpayers, but it exemplifies the cohesive planning strategies we can discuss to maximize benefits and minimize taxes.

Time is money

If you do not have extra dollars to make charitable contributions, please know there are other ways to give to others this year. For example, you can give your time. To quote my beloved mother, “children spell love T-I-M-E”. Whether it’s organized volunteer work or calling a distant relative, giving of your time is a generous way to donate to others this year. 

If you are feeling inspired, visit this article from the Washington Post listing numerous ways to help vulnerable populations throughout the nation. Let us know if you have questions about how to strategize 2020 gifts. We are here to love, care, and serve.

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Nothing like having your morning coffee and talking to your cat about time and threshold rebalancing strategies

Last weekend, I was perusing the Wall Street Journal and stumbled across section B4 and B5 titled, “What Happens Next?”.  In it, the Journal interviewed five financial magnates about the market.  As many of those interviewed often do, they made bold statements and predictions for the future.  Knowing their collective predictive power is ZERO, many of us read along, believing these financial giants have a crystal ball.  This, my friends, is a terrible mistake.  It is a mistake for them to prognosticate, particularly now.  It is equally miscalculated for us to believe they know where the markets are headed, whether it be up or down.

A meaningful statement from the CEO of Charles Schwab

From my point of view, one meaningful statement came from the CEO of Charles Schwab, Walt Bettinger, who posits that “panic is not an investment strategy".  Mr. Bettinger, I so agree.  Think about times in your life where panic is useful in a crisis.  In reality, it rarely helps the situation get better and often makes matters worse.  So, what is the opposite of panic?  Words that come to mind are courage, calmness, peace, and composure.  When it comes to your financial situation, model the opposite of panic and chaos.  Be calm.  Get off your screen and evaluate your portfolio in the quiet of the early morning. Yes, with a cup of coffee or tea in hand.  Or, if you are a night owl (which I am certainly not), find some space once the kids are down to evaluate your plan and portfolio.  Be at peace and take a deep breath.  Be courageous, which may mean rebalancing your portfolio by selling quality bonds to buy quality stocks.  Yep, buy low, sell high.  Try being composed when thinking about money and ways in which a negative can be turned into a positive.  Call your local credit union or bank to see if they can refinance your car or house loan, as recently rates are at record lows.  Most importantly, collect yourself and find comfort knowing this too shall pass.

Over time, history has shown that global economies expand, and markets rebound.

However, nobody knows how long our current circumstances will last, nor do they see the direction the markets will head.  Take the extra time you now have to develop a game plan for getting your family through this crisis.  Getting through our current dilemma will require a measured approach to decision making. This includes the choices you make with your financial plan and money. In its aftermath, there will be plenty of opportunities to get back on track, as long as you keep yourself and your finances in one piece and do not panic.

Peter Fisher is the CEO of Human Investing, one of the largest and fastest-growing wealth management firms (Forbes) in the U.S.  He is the author of Becoming a 401(k) Millionaire and blogger at 450 publishing.  He received his B.A. in Economics from Linfield College, an M.B.A. from George Fox University, and is currently a 3rd-year Doctoral student researching financial literacy, and the concept of collaborative consumption.   

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Imagine setting aside twenty billion hundred dollar bills

As many of you may have heard, the government is going to be depositing money into your account or possibly your neighbor’s.  The government is setting aside 2 trillion dollars to help stimulate the economy.  This is the third stimulus bill, and the government is already working on the fourth to help get us through this difficult time.  Given the size of this bill and the general speed at which things are changing, I thought it would be a good time to take a quick inventory of some important tax changes.    

When are my taxes due?

• The due date to file and pay your 2019 Federal and Oregon taxes (keep in mind each state is potentially different) is now July 15th.  While we now have more time to file and pay this tax, you might not want to wait.  Here is why:

  • It’s likely you will be getting a refund from Oregon if you paid Oregon tax in 2018 due to the large kicker this year.  You must file to get this money back. 

  • Keep in mind you can file your returns at any point and still wait until July to pay if you owe Federal.  There may even be an opportunity to use your Oregon refund to pay some of your Federal tax if you owe and can get it back in time.   

  • You will also have until July to decide on IRA and H.S.A. contributions for 2019. 

• Quarter 1 2020 Federal estimates are now due July 15th. However, Oregon did not extend this deadline.  You are still required to pay Quarter 1 2020 Oregon estimates by April 15th. 

• Quarter 2 2020 estimated payments are still due June 15th for Federal and State.

Am I receiving a stimulus check?

• Cash payments are $1,200 ($2,400 for married couples), with an additional $500 cash payment for each child.  These payments would not be subject to tax. 

• Full payments are available for Americans making up to $75,000 ($150,000 for married couples).  The payment is then phased out by $5 for every $100 over that limit.  The stimulus would be based on your 2018 or 2019 tax return.  If you have filed 2019, we are assuming the IRS will use that year. 

• It’s likely too late to try and manipulate this by filing or not filing.  However, to be safe, if you have not filed 2019 and income could be phased out, it might make sense to hold off until you receive a check. 

• If you made too much in 2018 or 2019, you may still be able to get some stimulus in the form of a refundable tax credit when you file your 2020 return. 

Can I make changes to my retirement account?

• If you’re a retiree, you are no longer required to take a Required Minimum Distribution for 2020.  This creates an opportunity for you to potentially realize some capital gains in the zero percent tax bracket or convert to a Roth IRA for tax-free growth. 

• They have eliminated the early withdrawal penalty of 10% for withdrawals up to $100,000 from qualified retirement accounts for retirement plan participants who qualify for COVID-19 relief.

  • Individuals could "re-contribute" the funds to the plan within three years without regard to contribution limits. While the law allows for these types of penalty-free distributions, individual plans can set more restrictive policies. 

  • Income tax on the distribution would still be owed but could be paid over a three-year period.   You would need to pay the tax for two years but then presumably get it back in the third year if you decided to recontribute. 

• They have increased the amount that can be taken as a loan from a qualified retirement plan from $50,000 to $100,000 for 2020.

Has charitable giving gotten more favorable?

• Yes. There is a new charitable deduction you can take for up to $300 in cash, even if you do not itemize on your 2020 tax return. 

• Prior to the CARES act, you could take up to 60% of adjusted gross income as a charitable contribution.  For 2020, you can now donate up to 100% of your income.

With all the changes going on, we will continue to update you as much as possible.  Please feel free to reach out if you have any specific questions

Sources

https://www.natlawreview.com/article/president-trump-signs-law-coronavirus-aid-relief-and-economic-security-cares-act

https://www.irs.gov/newsroom/economic-impact-payments-what-you-need-to-know

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Don’t worry, they look like they’re six feet apart

In these days I am reminded on a regular basis of the challenge we’re facing and the mountain we are all being asked (or expected) to climb. Whether we’ve been practicing the right skills or not seems to be a bit of a pointless question at this exact moment as the time is now. Right now, it’s go time. But what does that even mean?

Lifting up our employees

As the person charged with Human Resources for our “under 25 employees” small company, I’ve asked more self-reflective questions than any person might if not for living smack dab in the middle of a global pandemic. I’ve been inspired by all the heroic first responders. I’ve wondered what to start, stop and do more of. I’ve leaned on the many agencies churning out updated work/job-related information relating to this current crisis. Agencies like the Department of Labor (DOL), Wage and Hour Division (WHD), the Bureau of Labor and Industry (BOLI-OR) and the Internal Revenue Service (IRS). Our vendors and providers are also working tirelessly to keep us connected, plugged in and functioning. So instead of resharing information that is coming directly from these various sources that have helped my firm,  I wanted to share three specific insights I’m learning as I seek outside my usual “Resources” to help buoy up myself and my “Humans.”

1. What were your daily routines?

As I experience the ups-and-downs of it all I’ve been more intently drawing upon what I’ve practiced in pre-pandemic times. These practices include both spiritual and physical exercises. I’ve encouraged my team to do the same. It’s daily, it’s sometimes hard, but it’s good and it’s a good starting point. I’ll share a bit from my experience today. I listened to a morning message and was reminded of courage. I’ve certainly been seeing and hearing about it in the news. Great feats of courage revealing the true human virtue that it is. This morning I decided to stop and spend a few minutes pondering courage. And even thinking on the word brought me inspiration which lead to new motivation for the day. Author Melanie Greenburg, PH. D gives some great highlights and quote’s around courage. If interested, check out her article, “The Six Attributes of Courage,” where she presents several elements of courage and a courage building exercise.

2. W.I.N

Next, I thought I’d share what I learned from a recent webinar I listened to. The webinar, titled “Mental Skills for the COVID crisis” caught my eye on my Instagram story feed so I signed up to listen and learn! One of the things I learned (and a great takeaway) was from the pratice’s co-founder Dr. Jonatan Fader, who shared the acronym WIN: What’s Important Now. I loved this for several reasons: it’s short, I can remember it, and it’s totally applicable right now. I wasted no time in sharing WIN with my team and continue to draw on it daily for both inspiration and focus. If you’ve got time or need a break from what’s in front of you check out the full webinar at Mental Skills for the COVID crisis.

3. FIND inspiration from the Least Expected places

And lastly, a simple story of personal inspiration. This week is the start of spring term for my 2 college kids. They are both home, both in creative majors requiring studio’s and currently sharing what we now call ‘dorm room north.’ At about 6:30am I heard the coffee pot brewing and then the sound of a sewing machine getting warmed up. It was my son’s industrial sewing class. No Zoom meeting offered and with little direction he proceeded to make something from nothing. Trying to keep our sense of humor I looked over and mentioned what a great job he did to hear him say with a note of wit “welcome to my forte.”  And then came 2pm and my daughter’s painting class. While we don’t have an easel or a separate studio, other than the front entry that also doubles as a workout area, she began mixing her colors as if she were crafting a new recipe. I’ve seen (and felt) their disappointment, discouragement and then coming to terms with the fact that their art classes would be at-home in makeshift locations.  They have pressed on past their current limitations, not without gratitude, but certainly with a level of grit and courage. As I looked up at each of them over my morning coffee, I took inspiration to also push past my fears today and get started.

So my question to you is what’s in front of you today that might inspire you in some new way? Keep watch for that daily inspiration, especially aware of the usual and mundane. You may find yourself inspired by regular life as much as you’ve been inspired by the most courageous on the front lines. And as my 81 year old mom says – take what helps and leave the rest and take heart.

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@drew_beamer

Over the last few weeks, our nation has been greatly impacted by the COVID-19. Work for many Americans has changed. Companies have had to make difficult and necessary choices to stay in operation. Many have transitioned to a WFH (work from home) policy. While many companies have had to make the painful decision to cut employee’s working hours, or worse lay employees off.

Our nation is experiencing the worst spike in unemployment the country has ever seen. The Department of Labor announced that 3,300,000 Americans filed for Unemployment Insurance during the third week of March. This figure is nearly five times the previous record of 695,000 in October of 1982. With such figures, it is likely you or someone you know has had their employment disrupted by COVID-19.

Unemployment Insurance Initial Weekly Claims; Source: DOL.gov

So, what’s next for those who are trying to navigate a loss of work or reduced hours during this difficult time? Thankfully there are systems like Unemployment Insurance to help get someone back on their feet. For Oregonians experiencing hardship, we have assembled the following resource to guide you through filing for Unemployment Insurance.

Expanded Unemployment Insurance Eligibility due to COVID-19

In response to COVID-19, the Senate has passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The CARES Act has expanded Unemployment Insurance to those impacted by COVID-19. You are eligible to apply for unemployment benefits if you meet one of the following criteria:

• have been laid-off due to COVID-19 

• have had your hours been cut due to COVID-19 

• have been furloughed due to COVID-19 

• have had your place of employment temporarily closed due to COVID-19 

• is self-employed, without sufficient work history for Unemployment Insurance and undergoing financial hardship due to COVID-19 

• have been unable to work due to themselves or someone their household/care having been diagnosed with or experiencing symptoms of COVID-19 

Where to Start?

1. Act now: Millions of Americans are applying for Unemployment Insurance benefits; thus, processing times may be slower. Act fast, apply as soon as possible. 

2. File a new claim application: A new claim will need to be filed online or by phone. The preferred method is to use Oregon’s online claim system - here, or call unemployment claims 1.877.345.3484 (1.877.FILE.4.UI). When filing a new claim, be prepared to provide information such as:

   • Personal info: social security, phone number and mailing address.

   • Work History and Income over the last 18 months.

   • Previous employer information: employment dates, names, and contact info.

   Additionally, there are required questions about your eligibility and willingness to work. To assist those impacted by COVID-19 in the response to these questions and navigate the new claims application, the Oregon Employment Department has created the following video - here.

3. File a weekly claim: Once a new claim application is filed, a weekly claim must be filed to receive benefits. To file an initial weekly claim, wait until the Sunday after the new claim application has been submitted. Continue to file for weekly benefits every week that you’re unemployed to request payment. Weekly filings can be completed Sunday through Saturday for the previous week. Note: Another benefit of the CARES Act, Unemployment Insurance benefits, has been extended from 26 weeks to a total of 39 weeks.

4. Receive payments: Weekly payments can be received via Direct Deposit or via a Debit Card (delivered by mail).

SAMPLE CLAIM EXPERIENCE

How much can you expect to receive?

The current nationwide average weekly benefit is $385 per week. Thanks to the CARES Act, those eligible for unemployment will receive additional unemployment assistance of $600 per week for four months. Annualized, that adds up to an annual income of someone making over $50,000 per year. The intent of the CARES Act is:

“Most will get their full salary, or very very close to it,” Senate Minority Leader Chuck Schumer, D-NY

Your weekly benefit amount is calculated as 1.25% of your total base year wages. An employee’s base year consists of the previous four quarters before the initial claim. Note: During your base year you must have earned $1,000 in wages and worked at least 500 hours.

For example, an employee who earned $15 per hour, working 40 hours per week for the past year would generally receive $390 per week (+$600 per week over the next four months) of benefits.

If you want to calculate your expected Oregon Unemployment benefit, here is a useful tool (does not include an additional $600) -

Final Thoughts

As a reminder, we are all in this together. I recommend being both persistent and gracious when claiming your Unemployment Insurance benefits. The state employees in the unemployment office have gone from historically low unemployment numbers to the highest ever in a matter of weeks and are most likely overwhelmed.

What we have experienced over the last couple of weeks is so much more than market volatility and numbers on the ticker tape. Please let us know if there is anything our team can do for you and your family, financial or otherwise.

Sources:

https://www.dol.gov/ui/data.pdf

www.oregon.gov

https://govstatus.egov.com/ORUnemployment_COVID19#workplace_C19

https://www.cbpp.org/research/economy/policy-basics-unemployment-insurance

https://www.oregon.gov/employ/Documents/OAR%20471-030-0070-temporaryrule.pdf

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@haroldrmendoza

This week the Senate unanimously passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), a massive stimulus bill targeting the economic turmoil caused by the coronavirus pandemic. The 883-page bill aims to help Americans through these financially trying times. While as of this writing the CARES Act had yet to pass the House, all indicators point to the bill passing and being signed by the president.  

Specific to 401(k) plans, the CARES Act includes provisions around hardship distributions, 401(k) loans, and RMDs (Required Minimum Distributions) for 2020. Additionally, the Families First Coronavirus Response Act (FFCRA) was also passed and expands paid-leave coverage to employees affected by coronavirus. We are working closely with our ERISA consultation team and industry partners to determine the specifics of how plan sponsors should adapt administrative practices to accommodate these special 2020 provisions.  

 Hardship Withdrawals  

• The 10% early withdrawal penalty has been waived for distributions up to $100,000. Eligible participants under the age of 59 ½ may be able to request a distribution due to financial distress related to coronavirus through the end of 2020.  

• It is left to the plan sponsor’s discretion to determine that the request is for a qualifying coronavirus-related reason (such as adverse financial consequences due to being quarantined, furloughed, having work hours reduced, or not being able to work due to childcare coverage).  

• The taxes due on the withdrawal amount may be paid out over a three-year period.  

• Participants have the option to repay the distribution amount back into their 401(k) accounts within three years. 

 401(k) Loans 

• Participants with a new or existing 401(k) loan can delay any repayments due in 2020 for one year. 

• This covers loans due in full in 2020 – the CARES Act allows the repayment to be delayed for one year from the original due date. (Participants who terminate employment in 2020 will thus have additional time to repay their loan prior to it being considered a deemed distribution.)  

• The maximum loan amount has been increased to the lesser of $100,000 or the maximum account balance available.  

• The same risks regarding 401(k) loans still exist.  

Required Minimum Distributions 

• Retired participants and owners 70 ½ and older may waive 2020 required distributions from their 401(k) and other retirement savings accounts such as an IRA. 

• Individuals may find this beneficial as the 2020 RMD is calculated on account balances as of December 31, 2019 but due to recent market declines, a retiree could be withdrawing from an already reduced account balance.  

• Participants should speak with their financial advisor or tax consultant in determining whether to waive their 2020 RMD.  

 FFCRA 

• The DOL issued guidelines this week on the new Families First Coronavirus Response Act (FFCRA) which expands paid leave for specific reasons related to COVID-19.  

• Some employers may be exempt, such as those with fewer than fifty employees, but in general, employees must be provided with up to ten weeks of paid leave for specific coronavirus-related reasons.  

• Additional guidelines for employers can be found here.   

 Your Human Investing 401(k) Team is here to be a resource for you and your employees. We will be sure to share additional updates and guidance as they are provided. Please don’t hesitate to reach out to us with any questions in the meantime!  

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