Women, Wine and Wealth

If you missed our Zoom event last night- we missed you! If you logged in to join us you certainly left with some amazing financial advice generously offered to us by Northwestern Mutual financial gurus wealth management advisor Jennifer Steil and financial representative Lauren Paine.

Jennifer Steil Lauren Paine

We wanted to recap some of the best advice during our “sip and learn” for you today. As Jennifer told us last night, in these uncertain times the government has actually made it easier than ever to offer opportunities for liquidating otherwise locked down funds you may have to invest elsewhere or just to be able to spend for those who are finding themselves cash strapped..

The Cares Act

The Coronavirus Aid, Relief, and Economic Security (CARES) Act was passed by Congress with overwhelming, bipartisan support and signed into law by President Trump on March 27th, 2020.  This over $2 trillion economic relief package provides fast and direct economic assistance for American workers, families, and small businesses, and preserves jobs for our American industries.

What does this mean for you? The CARES Act waived the 10% penalty for 2020 distributions up to $100,000 taken by individuals under age 59 ½. Distributions can be made from a combination of IRAs and/or employer plans. The mandatory withholding from employer plans is also waived.  The taxes related to the distribution are still due but can be spread over 3 years and the funds can also be repaid over a 3-year period. Jennifer says now is the time to evaluate which is better, taking a low-interest loan or a distribution.

“Certain sectors of our economy have been immune to this downturn. We see growth in the technology sector and municipal bonds are priced very favorably. With interest rates at historic lows, now is also a great time to consider investing your money in real estate.” Jennifer says a partial or total Roth IRA conversion is also a consideration for people to make as our historically low tax environment is particularly favorable for the American investor.

“As always we encourage people to talk with their financial advisors about these options or, if you don’t have one, certainly do your diligent research yourself. If your advisor hasn’t checked in recently to talk about your portfolio, that’s a red flag. Things are changing so rapidly this is an excellent time to reevaluate your financial positions.”

Lauren Paine MWOY

Start, Stop, Continue

Jennifer and Lauren also broke down the three things we should start thinking about before we start moving our money around in this environment.

“Take the time now to start by setting two budgets, one for the lean times and one for when times are good,” explains Lauren. “That way, you keep an awareness of your financial goals and stay on track. It’s just too easy to start a financial slide when times are good- too many evenings out, that extra pair of shoes or vacation can inhibit your ability to reach your financial goals.”

Jennifer says it’s also a good time to stop making long term decisions based on short term goals. “Market volatility is different than loss. Since 1871 50% of market losses were regained in two months, 80% in one year. That means a market downturn has an average of recovering in just 8 months. This is why long-term planning and spreadsheets are so vital for a clear financial picture. I’m a numbers girl. So continue saving, continue putting money in your retirement account, continue paying on the life insurance and disability insurance policies to better prepare for future uncertainties.”

Cliff edge

Fail to Plan and Plan to Fail

Lauren explained the best defense against uncertain times is a great offense because change is inevitable so it is crucial to use this time to reassess your financial safety net.

“Keep up your life insurance, disability insurance, debt management, and of course, keep that emergency fund handy. To build with freedom, you must have your bases covered,” explains Lauren. “Cash is king in volatile times, but it is not strategic. Your money needs to be invested in tax-favorable arenas and you must be educated about where those places are. Planning ahead means reaching your goals with a written-down plan, a spreadsheet of re-evaluated priorities that should be clearer to you today more than ever before. Strategies must be developed to address the best and worst-case scenarios, rates of return, and tax conversion strategies. Empower yourself with a plan that will enable you to weather the good and bad times and you will have a much easier time sleeping at night.”

Thank you so much Jennifer and Lauren for your insights and expert advice. We hope to offer more events with these two financial powerhouses in the future!