For all of the human and economic misery that the coronavirus has caused, there are some silver-lining financial planning strategies to take advantage of. Here’s what we are working on now for clients:
Required Minimum Distributions (RMDs): RMDs are waived for 2020 as part of the Cares Act legislation. Clients who can forgo their required distributions from a cash flow standpoint should consider skipping their 2020 RMDs.
Relatively low taxes for 2020: 2020 may turn out to be a tax-friendly year to take advantage of:
Tax Loss Harvesting: Triggering capital losses in taxable accounts and immediately reinvesting the proceeds in similar securities to maintain the overall portfolio balance retains a portfolio’s recovery potential while banking tax savings for the future
Roth conversions: Consider strategically converting some IRA funds to a Roth IRA in 2020 to take advantage of the relatively low income tax rates.