1. Begin your College Education in Fall of 2020 at the school you originally planned?
2. Enroll at your local Community College for the first year or two, then transfer to another university or college where you can earn your diploma from?
3. Take a “GAP YEAR”?

With all of the UNKNOWNS and UNCERTAINCIES, most Universities and Colleges are not yet clear on what the Fall 2020 semester will be.  There is a possibility that they will offer only remote learning and no on-campus living.  OR, it is still possible that schools will reopen (possibly) with limited classroom access for physical attendance, exercising social distancing and strict precautionary measures with specific limitations for safety.

1. Your original College enrollment – If you decide this is what you want to do, your school will most definitely work to make sure you get the best college education and experience possible. It may not be the “typical or traditional” semester, but you should be confident that your University/College will provide the education you expect and deserve.  We suggest to contact your school for the latest and most updated information about your Fall 2020 semester.
2. Community College – Some students may opt to enroll in their local Community College for their initial year (or two). This can possibly save some tuition costs while taking some core (or mandatory) classes that could be transferrable to their next school of choice from which they will earn a degree.

Finance and Career Counselors are always on hand to discuss students’ options and help guide them to make the right decision for themselves.

More information on this is cited on CNBC:

Community colleges could see a surge in popularity amid Covid-19

https://www.cnbc.com/2020/04/22/students-consider-starting-out-at-community-college-amid-coronavirus.html

3. Take a “GAP YEAR” – Some students (especially during this COVID-19 pandemic) may be considering deferral of beginning college, or applying for a “Gap Year”.

Taking a “Gap Year” may be a consideration or viable solution for those students who are not absolutely sure how to proceed with their college education.  There can be many reasons why a student is confused or conflicted about beginning the next phase of their higher education.

All Universities and Colleges have Guidance/Career Counselors and Finance Counselors on staff and are there to help students when making these decisions.  If you would like to discuss all options, you should contact your school to make a (virtual) appointment.

More information on this (including Pros and CONS), cited on AccreditedSchoolsOnline.org.

Taking a Gap Year Before College

https://www.accreditedschoolsonline.org/resources/taking-a-gap-year-before-college/

and/or from: The Wall Street Journal

Gap Year Ideas for College Students

https://www.nytimes.com/2020/04/23/well/family/college-students-gap-year-coronavirus.html

Things to consider when planning for special needs

As parents, we all want what is best for our children. For parents of children with special needs, the financial planning process can become extremely stressful and confusing. Many parents often take extended periods of time to create an action plan due to confusion, anxiety, and a variety of obstacles. But if parents are able to navigate through the many decisions and find the right strategy for their family, special needs planning can give comfort knowing there is a plan in place. Planning for a child with special needs is most effective when it is implemented in stages based on the child’s age. The following questions and insights can be discussed with your Financial Advisor to help you to map out together a clear plan for your family.

Questions to discuss when building a special needs Financial Plan

1. What are the major expenses and concerns today as well as in the future?
2. Where will the child live after parents are retired or have passed on?
3. How will the future needs of any additional children and the parent’s retirement plans be affected?
4. What is the child’s ability to take care of themselves physically and financially?
5. What government assistance is the child eligible for?
6. What are the intentions for education?

Assistance from Government Programs

It is essential to prioritize eligibility in the beginning of the financial planning phase with your advisor. These programs can provide great relief considering the high costs of lifetime funding and living expenses for the parents.

1. Supplemental Security Income (SSI): Federal program designed to aid individuals with special needs with little to no income to meet basic needs. Children become eligible once turning 18 unless the parent’s assets are below standards.
2. Medicaid: an individual who qualifies for SSI is automatically eligible for Medicaid. This program will provide medical and prescription needs, this is essential due to coverage for special needs being very limited
3. Social Security Survivor/Disability Insurance (SSDI): funded through Federal government based on FICA taxes. Each payment is calculated from all FICA earnings made by the individual’s parents. It is required that a child is diagnosed prior to turning 22 years of age

Able Account

• Eligible for individuals and their families to use by contributing funds which will grow tax deferred and distribute tax free when it is for a qualified expense
• 2020 current contribution limit is $15,000 without reporting as a gift to the IRS
• SSI benefits are subject to change if the account value exceeds $100,000. If so, benefits would be on hold until the account falls below $100,000.
• Similar to a 529 plan, there are several conservative, moderate, and aggressive investment choices

Special Needs Trust

• A trust designed to manage assets dedicated towards a special needs individual while protecting access to eligible government programs
• First & Third-Party Trusts
  • First Party: irrevocable trust holding the assets of the individual with special needs. This can include an inheritance or settlement
  • Third Party: established by parent/guardian for the benefit of a special needs individual
    • Legal language specifies that the trustee will use their discretion of the trust to enhance the quality of life

Implementing a customized financial plan that best suits your family’s situation is the most important step you can take to having peace of mind. Examining potential situations, reviewing financial & estate planning documents, and going over the long term goals of all parties involved will help lay the foundation for an action plan.

On Wednesday, April 15, 2020 80 million Americans received their Stimulus funds via direct deposit. As the COVID-19 Relief funds are arriving in the hands of Americans that need it most, scammers are working hard to make attempts to get their hands on this money.  As the IRS Commissioner Chuck Rettig said, people need to take extra care during this period. Scammers are opportunists that historically take advantage of people when they are most vulnerable or in a state of need. The 2 trillion-dollar relief fund is a great place for them to go. The folks that are receiving relief from the Covid-19 Stimulus Package are generally more vulnerable than the average tax payer as it applies to individuals that make less than $75,000 year, a majority of whom are senior citizens and represent one of the most vulnerable groups in terms of fraud. It is important to become educated and to educate those around you about the scams that are out there to be able to avoid them properly. Below are examples of some of the most common signs of a scam and how to protect yourself against them.

• A call from the “IRS” asking for a “small payment to ensure they have the right account information” or someone asking for your account information outright. Do not give it to them. The information for the direct depositing of your payment is based off of the information you provided on your tax return. The IRS would not call you for this information. There is also no check to make sure they have the right account information by taking a small amount first.
• A fake check comes to you via mail. Then a sender calls you to verify your account information to “deposit it”. As mentioned already, the IRS would not do this.
• You’re asked by the scammer to sign over the funds to the caller and they will get the funds to you via a cashier’s check, deposit, etc. This seems obvious, but scammers can be very convincing about this being the only way for you to receive the funds.
• You receive an email or text about verifying account information. Once again, the IRS would not do this. Ignore them and report them if possible.
• Scammers contacting you to help you receive your payment faster. This is most pertinent to those that did not have a direct deposit on file and are expecting a check in the mail. As mentioned above, the IRS would not contact you for this reason. Ignore and report of possible.

Other helpful tips:

• The scammer uses the words “stimulus check” or “stimulus payment.” The term that government officials are using is “economic-impact payment.”
• Unsure if it is a real IRS Agent that called you? Ask for their Agent #, and say you will call back the IRS number and ask for them. 1-800-829-1040 is the toll-free number.
• To report scams, as mentioned above, you can forward an email you believe is fraudulent to phishing@irs.gov. More information on reporting is available here: https://www.irs.gov/privacy-disclosure/report-phishing
• Unsure of where your payment is? Check here: https://www.irs.gov/coronavirus/get-my-payment
• Don’t have to file a Tax Return but believe you are eligible? Go here to get your payment: https://www.irs.gov/coronavirus/non-filers-enter-payment-info-here

Sources:

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

https://www.advisorperspectives.com/articles/2020/04/15/irs-braces-for-scammer-onslaught-accompanying-stimulus-payments?bt_ee=gZBK8I0v96uW0WjEpkgvskYy8VO6i66i8xy9oRvRV%2FJLC87DNzh9GYFeloqe0IhF&bt_ts=1587124155277

https://www.irs.gov/newsroom/irs-issues-warning-about-coronavirus-related-scams-watch-out-for-schemes-tied-to-economic-impact-payments

https://fortune.com/2020/04/16/coronavirus-scams-stimulus-checks-secret-service-covid-19/

https://www.aarp.org/money/scams-fraud/info-2020/stimulus-checks-scams.html

https://www.irs.gov/privacy-disclosure/report-phishing

https://www.bloomberg.com/news/articles/2020-04-15/recipients-of-virus-payments-include-the-recently-deceased

https://www.irs.gov/coronavirus/get-my-payment

https://www.irs.gov/coronavirus/non-filers-enter-payment-info-here

https://www.irs.gov/tax-professionals/verify-the-status-of-an-enrolled-agent

https://www.irs.gov/pub/irs-news/at-01-39.pdf

We are living through an unprecedented event. Schools, businesses, and parks are closed. People are stuck in their homes and are unable to visit friends and family. Children are being taught in virtual classrooms. Life itself and every aspect of life is challenged. This situation, just like the Covid-19 virus, is unique…however we can look to the past for perspective.

Oil & Gold – In the early 1970s people believed the dollar was backed by gold. In 1973 the system collapsed and people had to make a mental shift that money holds value because we all agree it does. Our economy was dependent on foreign fuel when OPEC stopped shipping oil to US in 1973. This caused inflation and forced people to wait for hours in line just to get gas. Then the world changed, congress passed fuel efficiency rules and we, as a country, came to the realization that we needed more energy independence. These life lessons have forced us to be better prepared and rethink our systems going forward.

WWII – During WWII, it is not that people didn’t have money to spend, but rather that they had nothing to spend it on. Back then, people were pulled from the economy to go to or contribute to the war. In 1937 the market dropped 35%, then went up, then back down for many years. Cities were being destroyed, 70-85 million lives were lost, yet from 1942-1945, the market returned 20% per year during the darkest days of a generation. The dollar doubled from the beginning to the end of the war. Companies will find a way to be profitable. An extreme example, if they cannot make cars, then they will make tanks. Markets are resilient, because companies are resilient, because we are resilient.

Home – Another way to think of the stock market is like your house.  The daily price movements are not meant to be watched every day. It doesn’t matter what those daily price movements are, what matters is the long-term outcome. We are all bombarded by market news, notifications we didn’t ask for, and relentless media noise. When emotions are high it is easy to let them cloud your judgment. It is okay to feel the way you do, but be sure to disentangle your emotions from your investment decisions. We as your financial advisor and friend are here to help you along the way.

Global Diversification Matters – Last decade the US market did better, the previous decade the International market did better. So far in 2020 the US is not in the top 10. China had the best 1st quarter in 2020. As of now, Denmark is #1, followed by China.

Stock Market Big Picture – For every seller, there is still a buyer. For every pessimist, there is an optimist. There is no universal agreement on where the market is going. Continuous adjustments are made based on new data.

Bear markets last longer than bull markets, but many bull markets experience a 20% decline every 8-11 years. This is to be expected, it is the price of admission.

When the now overwhelms you, look to the future. The market is likely to recover before the “smoke clears”. 2009 was the worst year of the recession, but then the market went up over 25% before the recession was over.

Markets are choppy and have a huge range of volatility within a year, with a historical average of a 9-10% return, but these actual returns rarely occur. Historically after a 20% decline, the 1 year average return is 14.21%, 3 year return 11.58%, and 5 year return of 11.76%.

There can be a strong appeal to market timing but it is a fallacy, as one needs to make two right decisions….and just when the stress of being in the market is too much, remember being out of the market can be just as painful!

All we can do is take care of ourselves and those around us…so we go back to the process, rebalance your portfolio when necessary, harvest losses, and make sure short- term cash flow is met.  We are all here for you, please continue to reach out and we’ll get through this together.

On Friday March 27^th, President Trump signed a $2 trillion financial stimulus known as the CARES Act. This immense package is designed at the federal level to help Americans who will be directly impacted by Covid-19 by providing aid to individuals, support to small business sectors, expanded provisions for health care, updated tax deadlines, and education provisions. Many individuals are still currently battling with substantial student loan payments. However, during these unprecedented times, the CARES act has adopted a few measures to help provide temporary relief.

Key Federal student loan provisions & how they will affect you:

• 6-month grace period on current Federal student loan payments till September 30^th
  • Note: this does not apply to private custodians (ex: Discover, Earnest, Sallie Mae)
    • If you have private loans, we still recommend reaching out to them to see if there are any options available, including forbearance
  • This legislation treats each month during the grace period as if a payment was made towards loan forgiveness
  • No interest will be compounded during the interim, applied to principal only
  • You must manually check your Federal custodial payment portal; this will not automatically change an autopay plan if you need to delay your payments
• Employers can exclude student loan repayments from compensation
  • Employers can contribute up to $5,250 annually toward an employee’s student loans and it is not included in the employee’s income (applies currently to only 2020), meaning it is not taxed
• Look for potential student loan refinancing
  • With recent cuts from the Federal Reserve, this can be a great opportunity to lock in a new rate and start saving on your monthly payments.
    • Need a credit score of at least 650 to qualify and have enough monthly income to make payments
  • If you are quoted rates that are higher than anticipated, look into having a cosigner such as a parent/guardian to see if you are granted a lower rate
• If you are a current student, contact your bursars/financial aid office at your educational institution to check to see if there have been any changes.

All of these recent provisions can be helpful ways to lower some financial burden on student loans. With the addition of the $1,200 stimulus check, aid to vulnerable economic sectors, Federal student loan relief, tax relief, and other various additions, the US government intends that the CARES Act can provide some stability in an unprecedented time of hardship. As history has shown, we are strong and are always capable of overcoming the toughest of challenges.