Open Enrollment, which varies by company but generally takes place in the Fall, can often be a stressful time as trying to make sense of your company’s benefits can seem like a daunting task. It is an important time however, as it allows you the opportunity to adjust your benefits based on any changes that have taken place or might take place over the coming year. Many employers may make slight changes to their plans and it is important that you review them to ensure you are taking advantage of all your options and getting the coverage you need. On occasion, some employers may even require action on your part in order to stay enrolled. It is important to carefully review the documents provided to you so you can be sure to make the necessary adjustments to options that best fit your needs and keep your coverages current. Open enrollment is also a great time to review the amount of money you are contributing to retirement and seeing if you can increase it as well as review beneficiaries to make sure they are up to date on life insurance or 401k plans.

A few important things to consider:

What Changes Have Taken Place to The Plans Offered?

It is important to look at not just the difference in premiums for the plans, but also the more detailed changes such as coinsurance and copayment amounts. You should also check to see if there is a different deductible amount. These offerings can vary depending on the size of your employer and you may have several different options to choose from. Depending on your situation a plan with a higher deductible may make sense for you however, if you are planning on having a child within the next year, a more traditional plan with a lower deductible may make more sense. You will want to weigh the out-of-pocket expense to you for each plan and consider the likelihood that you will reach those maximums. There may also have been a change in providers which could mean your regular doctor or dentist is no longer in network under the new insurance. You will want to check before going to a doctor to ensure coverages, be aware if pre-approvals are needed, and to avoid out-of-network costs. Lastly, you will want to review life insurance and disability insurance coverages. There may be low cost options available to you for life insurance as well as disability and if you have others depending on you it might be wise to take advantage of these offerings.

Have My Needs Changed This Year or Will They Change Over the Next Year?

It is easier to make changes and sign up during open enrollment. For example, perhaps dental insurance did not make sense when you were single but it may make more sense once you have children. Additionally, you may need to start using that Flexible Spending Account for daycare or health costs or utilize Dependent Care Flex Spending if it’s offered. Contributions to both are tax-free as well as withdrawals made for qualified expenses. You will need to tell your employer how much to take out from your gross pay for the year. You will also need to use this money within the year as it does not roll over like an HSA. With an HSA, which is typically offered with a high deductible health insurance policy, the money is tax deductible, earnings are tax-free, and withdrawals used for qualified medical expenses are also tax-free. The other benefit of an HSA is it’s a portable account, meaning if you change jobs, the money will go with you.

How Will Things Affect My Take-Home Pay?

For existing employees, this is the time to ensure you are taking full advantage of any 401k plan your company offers. Many employers offer a company match (up to a certain percentage) that is free-money you should not leave on the table. You should consider how this will affect your take home pay when deciding how much you can contribute. Insurance premiums, contributions to HSA’s and 401k’s should all be factored into your budget so you are sure your money is going to work for you in the best possible way. It is important to remember that many of the benefits will come out before your taxes as this lowers your taxable income and may make it so that you do not notice the changes as much.

Final Thoughts

There may be other options offered during open enrollment as well. For instance, they may offer a legal plan to assist in your preparation of estate documents. When it comes to additional coverages though, be sure to read the fine print and don’t be fooled by marketing language. Make sure to review the coverages and cost in detail to be sure there is real value to you. Fully understanding the benefits is key to ensure you are making informed decisions and fully taking advantage of the benefits your employer provides. Is your open enrollment period approaching? As always, Lighthouse Financial Advisors, Inc. is here for you and ready to assist you navigate through the process.

 Financial security in retirement doesn’t just happen.

It takes planning, commitment and, yes, money.

FACTS:

  • Only 40 percent of Americans have calculated how much they need to save for retirement.
  • 30 percent of private industry workers with access to a defined contribution plan (such as a 401(k) plan) does not participate.
  • The average American spends roughly 20 years in retirement.

Putting money away for retirement is a habit we can and should all live with.

  1. Saving Matters – Start saving, keep saving, and stick to your goals

If you are already saving, whether for retirement or another goal, keep going! You know that saving is a rewarding habit. If you’re not saving, it’s time to get started. Start small if you have to and try to increase the amount you save each month. The sooner you start saving, the more time your money has to grow. Make saving for retirement a priority. Devise a plan, stick to it, and set goals. Remember, it’s never too early or too late to start saving.

  1. Know your retirement needs

Retirement is expensive. Experts estimate that you will need 70 to 90 percent of your pre-retirement income to maintain your standard of living when you stop working. Take charge of your financial future. The key to a secure retirement is to plan ahead.

  1. Contribute to your employer’s retirement savings plan

If your employer offers a retirement savings plan, such as a 401(k) plan, sign up and contribute all you can. Your taxes will be lower, your company may kick in, and automatic deductions make it easy. Over time, compound interest and tax deferrals make a big difference in the amount you will accumulate. Find out about your company’s plan. For example, how much would you need to contribute to get a possible employer contribution and how long would you need to stay in the plan to get that money.

  1. Learn about any employer’s pension plans

If your employer has a traditional pension plan, check to see if you are covered by the plan and understand how it works. Ask for an individual benefit statement to see what your benefit is worth. Before you change jobs, find out what will happen to your pension benefit. Learn what benefits you may have from a previous employer. Find out if you will be entitled to benefits from your spouse’s plan.

  1. Consider basic investment principles

How you save can be as important as how much you save. Inflation and the type of investments you make play important roles in how much you’ll have saved at retirement. Know how your savings or pension plan is invested. Learn about your plan’s investment options and ask questions. Put your savings in different types of investments. By diversifying this way, you are more likely to reduce risk and improve return. Your investment mix may change over time depending on a number of factors such as your age, goals, and financial circumstances. Financial security and knowledge go hand in hand.

  1. Don’t touch your retirement savings

If you withdraw your retirement savings now, you’ll lose principal and interest and you may lose tax benefits or have to pay withdrawal penalties. If you change jobs, leave your savings invested in your current retirement plan, or roll them over to an IRA or your new employer’s plan.

  1. Ask your employer to start a plan

If your employer doesn’t offer a retirement plan, suggest that it starts one. There are a number of retirement saving plan options available. Your employer may be able to set up a simplified plan that can help both you and your employer.

  1. Put money into an Individual Retirement Account

You can put up to $6,000 a year into an Individual Retirement Account (IRA); you can contribute even more if you are 50 or older. You can also start with much less. IRAs also provide tax advantages. When you open an IRA, you have two options – a traditional IRA or a Roth IRA. The tax treatment of your contributions and withdrawals will depend on which option you select. Also, the after-tax value of your withdrawal will depend on inflation and the type of IRA you choose. IRAs can provide an easy way to save. You can set it up so that an amount is automatically deducted from your checking or savings account and deposited in the IRA.

  1. Find out about your Social Security benefits

Social Security retirement benefits replace about 40 percent of a median wage earner’s income after retiring. You may be able to estimate your benefit by using the retirement estimator on the Social Security Administration’s Website. For more information, visit their Website, www.ssa.gov

  1. Ask Questions

While these tips are meant to point you in the right direction, you’ll need more information. Talk to your employer, your bank, your union, or your financial advisor. Ask questions and make sure you understand the answers. Get practical advice and act now.

One of the most common sources of conflict in relationships is money. If you are lucky enough to have found someone who you are compatible with, the last thing you want to do is jeopardize the life you are trying to build together because conversations around money are getting in the way.  Discussions about finances between partners often become emotionally charged, especially when it involves different values around money.  Fortunately, whether it’s about spending habits, saving for a desired goal, investing or paying off debt, having healthy discussions about finances is a skill that couples can learn to develop together.

Understanding what drives your partner’s emotions about money is key to turning these discussions into honest and productive conversations.  It can be helpful to discuss together what your experiences were like with money growing up.  In some households, speaking about money can be considered taboo while in others they are open discussions. These early experiences shape the way we view money and inform our decisions as adults on how we choose to spend, or not spend. Understanding that your partner grew up with a financially irresponsible parent due to a gambling problem can go far when trying to understand why your surprise purchase of an expensive custom suit quickly became a serious issue. On the flip side, your partner’s understanding that your purchase of a custom suit was because you felt you could finally afford it and deserve it seems less frivolous when it’s known that you grew up with years of being bullied as a child for your second-hand clothing.

The benefit to understanding your partner’s emotional connection to money is that it can open the door for truly honest conversations.  If you both come from a place of understanding you create a safe space to share information, even if it means sharing things you may not be proud of.  Hiding debt or overspending is a deception that can have serious adverse effects on a relationship.  Like lying, it can wear away at the trust that exists between you and could be your downfall.  It’s imperative to have an honest conversation about any debt or unhealthy spending habits.  If you can agree to a plan to pay off the debt or plan a budget that includes a set amount of savings these issues can easily be figured out before they become your undoing.

Starting and regularly having these money discussions can be difficult but money is a part of life – and maintaining openness around it with your partner is key to prevent it from becoming an issue.  Like most aspects of a relationship, communication is everything.  Sharing priorities and agreeing on common goals together will allow you to more easily create a path forward. Focus on each other’s strengths, always keep each other in the loop and your money conversations can become a part of your relationship that serve to reinforce your shared visions and dreams and further strengthen your partnership.

For the past 20 years Lighthouse Financial Advisors has been committed to reducing stress and keeping couples happy by coaching them through financial matters.

2020 has been a year like no other with Covid-19 having derailed all of our plans and expectations. Unfortunately, the United States is officially in a recession, ending the longest economic expansion in history. More than 40 million Americans have filed for unemployment since the pandemic began and uncertainty seems higher than ever. The word recession often triggers negative thoughts, feelings, and fear of the unknown. The question is, when do we get back to how life used to be? Below are several ways to help navigate through a recession and these uncertain times.

  1. Building your emergency reserve.
    1. What is your “sleep at night money”, what is your comfortable minimum cash balance to have at all times for large expenses, emergencies, etc.? If possible, adding additional funds to your reserves will help ensure that you will continue to pay all of your necessities. Recommend using an online high yield saving such as “Marcus by Goldman Sachs” or “American Express” to earn the highest interest possible.
  2. Paying down debts if possible
    1. Priority is to eliminate existing debt such as credit cards which may involve high rates of interest. Auto loans and mortgages can be refinanced at lower interest rates due to the Federal Reserve cutting rates. Federal student loans offer deferred payments interest free to help for several months.
  3. Think with the end in mind
    1. This expression by Franklin Covey means to think with a clear vision and destination, then proactively incorporate a plan to achieve success. The path forward may be uncertain, but your long-term vision should never change. Making drastic short-term changes will severely impact long term financial security.
  4. Identify your risk tolerance and stay the course
    1. Understanding your risk tolerance is a major factor when building a financial plan. At Lighthouse, we believe that allocation should focus around a spending plan. Someone who may depend on their portfolio with a short-term mindset would often focus on CD’s, money markets, and bonds. An investor focused on needing income from their portfolio several years down the road would rely on equities to maximize their potential return. Although thinks can be shaky in the current markets, stick to your plan and identify your objective.
  5. Identify your budget and cash flow
    1. What makes you happy, what is essential? Only you know that answer. It is helpful to take a look at current income and expenses to see where you stand. Identify possible ways to cut back to make sure you are living within your means.
  6. Focus on your health
    1. This is the most important of this list. Having strong mental & physical health during tough times is what will help you achieve success. Whether it’s going for a walk, going for a drive, playing a video game, etc., do what makes you feel good. Options may be limited, but take advantage of what makes you thrive. Take advantage of spending time with your family and friends. They are your most invaluable assets.

There is no specific timetable as to when a recession will end, but we can at least navigate these unprecedented waters a little easier together. Think of all you have, especially your family and friends. We often look back in life wondering how we ever got through various life challenges. Covid 19 may be disruptive, but in the end this too shall pass. In the future we will look back and learn from this experience together and be better for it.

When you know what you want in life and you strive to reach it, you can accomplish almost anything.  It’s easy to dream big and create goals, but how do you go about accomplishing those goals?  Below are a few steps to follow to keep you on your path:

  1. Write down all of your goals – seeing them written down on paper helps to solidify them in your mind.
  2. Prioritize – Now that you have written them all down. Decide which goals are most important and what you want to accomplish first.  Trying to focus on all your goals at once often leads to being overwhelmed, stressed, and disorganized, making it much harder to accomplish any of your goals.  Focusing on your top 1,2, or possibly 3 goals creates a better chance of success and enables you to then focus on your next set of goals.
  3. Clearly define your top goals and create a timeline – This allows you to focus in on exactly what you want to accomplish and how long you expect it to take. Be sure to consider outside pressures and set realistic, attainable expectations.  Having appropriate expectations creates manageable action items, reduces stress, and increases your chances of success.
  4. Break down large goals into smaller goals – Very large goals can create stress and lead to you to feel overwhelmed making it hard to focus on what needs to be done to accomplish them. Breaking large goals into multiple smaller goals enables you to create manageable action items, which will enable you to stay positive, and hopefully stress free.  Accomplishing multiple goals also creates consistent success which in turn encourages you to keep going on your path.
  5. Create a plan and track your Progress – Creating action items helps you to plan ahead to ensure you have the materials and time you need. Tracking your progress keeps your mindset positive and encourages you to continue on your path. This can be done several ways depending on the goal.  Sometimes the progress is evident just by looking.  For example, repainting a room, you can see the difference when you cut in, apply the 1st coat of paint, and the second.  Other goals can be measured and tracked numerically such as increasing your savings account to a specific amount.  You can track your progress by watching the balance increase.  Other goals are harder to see such until completed such as obtaining a degree.  One way to track your progress would be to create a master checklist of all the classes you need to take and mark them off as you complete them.  Whatever method you choose make sure it is one that will help you stay motived.
  6. Tell a friend – Having someone to hold you accountable when you slack off on your goal and encourage you when you are struggling makes it easier, and hopefully more fun to stay on task and keep you motivated.

No matter how much you plan you will always run into obstacles.  Sometimes the obstacle is yourself and you lose focus, get discouraged, and cease to make progress.  Other times the obstacle is an unexpected event out of your control, such as a car crash, illness, unplanned child, loss of job, a promotion at work with additional expectations or even a required relocation.  Regardless of what causes you to derail your progress it is important to find a way to get back on track.  Here are a few suggestions to get you back on the path to your success:

  1. Acknowledge mistakes – Everyone makes mistakes from time to time. It is important to recognize what you have done wrong so you can hopefully avoid it again in the future.
  2. Forgive yourself – Don’t harp on the mistakes you have made. Focus on moving forward and remaining positive.  A “you can do it” attitude goes a long way when trying to accomplish a goal.
  3. Identify roadblocks – Knowing what your difficulties are enables you to manage the impact they make or even makes it possible for you to avoid it in the future.
  4. New action plan – Sometimes you get so far off course that some of the steps or timeline expectations need to be changed. Other times the obstacles that occur force you to reevaluate your priorities and change your goals.  Do not resist altering your goals if they are no longer what you want.  Life is everchanging so it is important that your goals change to fit your wants and needs.

There are many different events that affect us throughout our lives. One of the most heart-breaking is death. As we live our lives, it is likely that at some point we will either receive an inheritance or know someone that does. It can be a stressful time as you are trying to manage your emotions along side managing financial decisions. What do you want to do with the money? And what should you do first? Below are a few things to consider:

  • Grief. Grieving is a natural part of the process of the passing of a loved one. It is a crucial step before any major financial decisions are to be made.
  • Consider emotional, spiritual, or practical uses for the inheritance. There are many ways to honor a loved one. You could utilize the inheritance in a way that they would see fit for themselves, in a way that makes you happy, or in a way that unites both ways and establishes a connection with them. An example of this would be to purchase something small, that reminds you of the person that was lost.
  • Once you have come to an agreement with yourself in terms of basic ideas of how you would like to utilize the inheritance, it is time to start really planning out the angles of how to manage the funds that are not always clear as day for non-financial folk. The boring stuff – and the stuff that can have an immense impact on an inheritance and the way you choose to take / use it. This includes tax planning, estate planning, investment and spending options. There may be options available to you that you do not realize. (lump sum vs. annuity; selling real estate vs. utilizing it for income etc.)
  • Once you are ready to take these steps, it can be crucial that you work with a fee-only, fiduciary advisor to assist you. With them it is important to discuss:
    • Tax Implications
    • Distribution Strategies
    • Gifting Strategies (if charitably inclined you can possibly lower the tax liability)
    • Estate Planning
    • Insurance (insurance coverage should match your level of net worth/item value)
    • Annuitization / Income strategies to manage & create a reliable cash flow system
    • Debt management
    • Investing, Investing, Investing!

As mentioned above, it is a great idea to work with a Fiduciary, that has no conflict of interest in any area they advise on. This is not only helpful when you are stricken with a windfall from inheritance sums, but at other times and parts of your life. It is always good to take a moment and reflect on what you wish to accomplish with your money, and to make sure your advisor knows your goals as well. Working with your advisor closely to achieve your goals ensures the fastest and easiest approach to your financial and personal freedom.

While the COVID-19 pandemic continues to be challenging to say the least, it presents an opportunity for communities to come together and for us to give back.  Charitable giving is meaningful for a multitude of well documented reasons. In addition to helping those in need or just brightening someone’s day, the simple, selfless act of helping others provides a great sense of personal satisfaction and growth.

While writing a check is undoubtedly helpful, small acts of service can really add up and go a long way.  Here are a few meaningful ways to pay it forward and give back to your community today:

  1. Cheer Up Those Around You. Give an old friend a call, check in on your neighbor, or simply make eye contact and give a wave the next time you’re on a walk or in the store. A smile or kind social interaction can go a long way!
  2. Donate your time. Seek out local institutions looking for volunteers or donations.  If you’d rather not go out in public, offer your services or skill set. Do you know of a friend out of work? Offer to proofread their resume, make an introduction, or practice a mock-interview with them.
  3. Support Local Business. Local businesses have been hit hard during this period of social-distancing with Americans out and about less. Consider picking up a bag of coffee beans from a local coffee roaster (Rook Coffee is my personal favorite!), or simply supporting your favorite local restaurants. All of these establishments play a part in making your community a place you call home, supporting them helps keep them going.
  4. Tip a little Extra. Now that we’re heading back to the salons, barbershops, and beginning to dine out, consider tipping more generously. It is no surprise that these industries have been deeply affected by the economic impact of COVID-19, so as we begin to support these establishments, keep the local workers in mind. With the reduction in hours and a reduced customer base, a little bit of an extra tip, if you’re able to, can make a huge difference.
  5. Do Your Research & Donate Money If you’re able to give monetarily, do the research to ensure your money is being effectively used by the charity. Donate locally, and if you’re donating to a larger institution be sure to vet them in advance. There are charity assessment tools which rate organizations based on financial transparency and how much goes toward the cause versus marketing, fundraising or administrative costs. Also, it doesn’t hurt that monetary donations have tax advantages too!

While social distancing can make us feel insular, a sense of community has never been more important. Consider some of these tips to help us all get through this challenging time, together

As US equities have outperformed non-US stocks over the last several years, some investors may question the role that global diversification plays in their portfolios.  It is very easy to get caught up in the market swings during this unprecedented time, along with the outperformance of the largest U.S. companies.

For the five-year period ending April 30, 2020, the S&P 500 Index had an annualized return of 9.12% while non-US Developed stocks (represented by the MSCI World ex USA Index) lost -0.27%, and Emerging Markets stocks (represented by the MSCI Emerging Markets Index) declined by -0.10%.

While non-US equities have recently delivered disappointing results, it is important to remember that investing globally provides valuable diversification benefits. The US stock market represents roughly 54% of world market capitalization, meaning that a portfolio investing solely within the US would have exposure to only about half of global companies.

Looking back to the “Lost Decade” (2000-2009) is a great example of the opportunity cost associated with not investing globally. From January 2000 to December 2009, the S&P 500 Index had a cumulative return of -9.10%, its worst ever 10-year performance. You may even expand the time period by three more years, covering 2000-2012, and see that the mighty S&P 500 Index failed to outperform 1-month US T-Bills. However, looking beyond US large cap equities during the “Lost Decade”, we see that investors who had exposure to other areas of the global landscape were rewarded with positive returns (see table below).

Cumulative performance from January 2000 – December 2019 reflects the benefits of having a globally diversified portfolio, especially a portfolio that targets areas of the market with higher expected returns.

This is why we urge, preach, and teach the benefits of diversified investing over the long term.

Total Cumulative Return (%) 2000-2009 2010-2019 2000-2019
S&P 500 Index -9.10 256.66 224.33
MSCI World ex USA Index (net div.) 17.47 67.89 97.22
MSCI World ex USA Value Index (net div.) 48.71 48.79 121.27
MSCI World ex USA Small Cap Index (net div.) 94.33 116.76 321.24
MSCI Emerging Markets Index (net div.) 154.28 43.50 264.91
MSCI Emerging Markets Value Index (net div.) 212.72 22.83 284.13

Diversification neither assures a profit nor guarantees against loss in a declining market

The CARES Act is 335 pages and has created a lot of opportunity for proactive tax planning, along with a lot of acronyms – CARES (Coronavirus Aid, Relief, and Economic Security Act), PPP, PUA, FPUC, EIDL, PPPHCEA & PEUC (Pandemic Emergency Unemployment Compensation) or Payments extend until Christmas.

A few of the CARES Act law changes for tax year 2020 on retirement accounts –

  • No RMD (Required Minimum Distribution) required for 2020 -YES not required to take funds from your IRA for 2020
    • Waiver applies to Traditional IRAs, retirement plans – SEP, SIMPLE, 401(k),403(b) & 457(b)
  • No required distribution from Inherited IRAs or Inherited ROTH IRAs for 2020
  • You can still take a distribution from your IRA if you need or want to (Taxes still apply to the distribution)
  • If someone passed away in 2020 and did not take an RMD the estate is not required to take the RMD.
  • Qualified Charitable Distributions are still allowed even though RMDs are not required
    • QDC – Charitable contributions paid directly from your IRA to the charity (Must be 501(c)3 & you need to be 70 ½)
  • Special Tax Relief for those who qualify – Coronavirus Related Distribution – CRD
    • Allows $100,000 penalty free distribution from IRA or company retirement plan
    • Don’t have to be over 59 ½
    • Allows distribution to be repaid TAX FREE – repayment period begins day after funds are received
    • OR allows Federal tax to be paid over 3 years / State income tax may vary
      • Qualifications only those individuals
        • diagnosed with the SARS-CoV-2 or COVID-19 virus by a test approved by the CDC
        • spouse or dependent is diagnosed
        • who experiences “adverse financial consequences” from being quarantined; being furloughed or laid off or having work hours reduced; or being unable to work due to lack of child care; or have closed or reduced hours of a business they owned or operated
    • Distribution taken prior to CARES Act also qualify

A lot of tax planning to think about and review for your 2020 tax projection. As with all tax law changes, we will work directly with you and apply these changes to your unique tax situation.

It is expected today that the President will sign bipartisan legislation to update the U.S. Small Business Administration (SBA) Payroll Protection Program (PPP) to make several changes to the rules governing the forgivable loan program designed to help small businesses keep employees on payroll. This is great news for businesses that received the PPP loan and were left with many unanswered questions.

The initial PPP provided small businesses (fewer than 500 employees) an opportunity to take a loan for 2.5 times their monthly payroll which could be used to maintain staff and cover some additional business expenses. The loan would be forgiven if all outlined conditions were met. At least 75 percent of the proceeds had to be used to cover payroll costs and up to 25 percent could be used for rent, utilities or interest on mortgages. Forgiveness was based on the employer maintaining the same employee and salary levels as pre-COVID-19 times. The borrower then had 8 weeks from the date the loan was received to meet the above terms or the borrower had to repay the unused portion over 2 years at 1%. All funds had to be used by June 30, 2020.

Due to the extended lockdown and the slow pace that small businesses have returned to “business as usual” (especially in New Jersey), the revisions to the Paycheck Protection Program Flexibility Act (Flexibility Act) serve to alleviate several areas of worry. The most noticeable changes are:

  1. Extension of Covered Period – borrowers now have the earlier of (a) 24 weeks or (b) December 31, 2020 to use the loan proceeds and achieve full forgiveness. As NJ businesses start to reopen in June/July, this is the biggest indication that most borrowers will qualify for full forgiveness. In particular, restaurants and seasonal businesses will benefit most. The recent decrease in unemployment numbers may be a direct result of the extension as employers have clearer expectations now.
  2. Minimum Amount for Payroll – The new minimum is 60% of PPP loans need to be used for payroll costs to obtain full forgiveness. However, up to 100% of proceeds can be used for payroll.
  3. Calculation of Full-Time Employees – since PPP borrowers have to maintain pre-COVID-19 staff levels, it was imperative that a large number of employees return to work. The extension of the hiring deadline from June 30 to December 31 provides great relief to businesses slow to return to fully operational status.
  4. Payroll Tax Deferral – the CARES Act allowed employers to delay paying the employer portion of social security tax (6.2% tax on wages) with one-half payable by December 31, 2021 and the remaining half by December 31, 2022. However, any business receiving loan forgiveness under PPP was not eligible for the deferral. The Flexibility Act allows all borrowers to defer 2020 social security payroll tax obligations.

Overall, we are delighted with the recent changes to the PPP and the clarification of the programs rules. This is great news for small business owners and the economy.