- Individuals drawing unemployment benefits will receive an extra $300 a week through March 14.
- Some hard-hit small businesses may be able to apply for a second Paycheck Protection Program loan.
- Employers deferring payroll taxes under the President’s executive action have until the end of 2021 to increase employees' withholding to pay back taxes owed.
- The $300 above-the-line deduction for cash contributions to qualified charities is extended through 2021.
Despite a crazy year or perhaps because of it, over half of Americans are expected to make at least one financial resolution for 2021.1 If you haven’t identified yours, here are a few to consider.
Pad your retirement savings. You probably spent less on travel, restaurants, movies, gas, or sporting events in 2020. Why not maintain some of those cuts after things normalize and add the savings to your retirement account?
Increase your emergency fund. According to FINRA, almost half of Americans don’t have a rainy day fund. If you don’t have an emergency fund equal to six months of income, start one. If you do, why not add enough to cover an additional month or two of expenses?
Reduce debt, safeguard credit. Automate account payments to avoid missing any. Plan to eliminate debts before retiring. Thwart identity thieves with credit monitoring, which notifies you when key information on your file changes.
Create a long-range plan. If you’re married, project future expenses if you both live to 95 or either of you dies and the other lives to 95. Then go to ssa.gov/myaccount to estimate Social Security benefits you’d receive when claiming at different ages. Determine how much more you’ll need to maintain your lifestyle.
Review your insurance and estate plan. Make sure your insurance coverage is adequate and beneficiaries are up to date. If you haven’t reviewed your estate plan recently, you’ve moved, or your assets or family has changed, schedule a meeting with your estate planning attorney.
Invest in yourself. Health care is expensive. Studies indicate the average 65-year-old couple retiring in 2020 can expect to pay $295,000 for out-of-pocket health care and medical expenses (not including potential long-term care). Taking steps to stay fit now may help you enjoy retirement and save money.
Work with a coach. Your odds of successfully implementing goals increase when you have an objective, knowledgeable partner. Make an appointment to discuss your financial resolutions and how we can work together to make 2021 a happy and prosperous new year!
Smart Things to do with a Year-End Bonus
U.S. stocks fell Friday following disappointing retail sales data and big bank earnings reports. Investors also feared President-elect Joe Biden’s ambitious stimulus plan could result in tax hikes or higher interest rates. For the week, the Dow fell 0.91 percent to close at 30,814.26. The S&P lost 1.46 percent to finish at 3,768.25, and the NASDAQ dropped 1.54 percent to end at 12,998.50.
|Returns Through 01/15/21||1 Week||YTD||1 Year||3 Year||5 Year|
|Dow Jones Industrials (TR)||-0.91||0.73||8.59||8.59||16.79|
|NASDAQ Composite (TR)||-1.54||0.87||41.63||22.66||25.03|
|S&P 500 (TR)||-1.46||0.39||16.66||12.74||17.23|
|Barclays US Agg Bond (TR)||0.19||-0.76||6.00||5.25||4.07|
|MSCI EAFE (TR)||-0.30||1.59||8.40||3.33||10.04|
Debt — The U.S. increased its national debt by $7.77 trillion in the last four years. The U.S. increased its national debt by $7.67 trillion in the previous seven years (source: Treasury Department, BTN Research).
Housing — The average interest rate nationwide on a 30-year fixed rate mortgage was 2.76 percent at the end of 2020. The all-time record low national average is 2.66 percent, set just one week earlier on Dec. 24 (source: Freddie Mac, BTN Research).
Where Does This Money Come From? — The Fed is buying $120 billion of bonds each month – $80 billion of Treasury debt and $40 billion of mortgage-backed securities. The Fed confirmed on Dec. 16 the purchases will continue “until substantial further progress has been made toward the Committee’s maximum employment and price stability goals” (source: Federal Reserve, BTN Research).
Source: Morningstar.com. *Past performance is no guarantee of future results. Indexes are unmanaged and cannot be invested into directly. Three- and five-year returns are annualized. The Dow Jones Industrials, MSCI EAFE, Barclays US Agg Bond, NASDAQ and S&P, excluding “1 Week” returns, are based on total return, which is a reflection of return to an investor by reinvesting dividends after the deduction of withholding tax. (TR) indicates total return. MSCI EAFE returns stated in U.S. dollars.
* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Morgan Stanley Capital International Europe, Australia and Far East Index (MSCI EAFE Index) is a widely recognized benchmark of non-U.S. stock markets. It is an unmanaged index composed of a sample of companies representative of the market structure of 20 European and Pacific Basin countries and includes reinvestment of all dividends. Barclays Capital Aggregate Bond Index is an unmanaged index comprised of U.S. investment-grade, fixed-rate bond market securities, including government, government agency, corporate and mortgage-backed securities between one and 10 years. Written by Securities America, Copyright January 2021. All rights reserved. Securities offered through Securities America, Inc., Member FINRA/SIPC. SAI#3410930.1