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Financial Opportunities During the Coronavirus

| March 25, 2020

The investor playbook is to always follow your investment plan. The only thing worse than not having a plan, is abandoning the one you have. The stock market has already suffered declines similar to those associated with recessions. That doesn’t mean stocks can’t go lower. It just means that the opportunity for long-term investors is getting more attractive. We’ve listed a few ideas below that you may want to take advantage of during this time.


Refinance your Mortgage

The Fed has further reduced rates and the 10-year treasury has dropped, causing mortgage rates to drop to historic lows. If you have a mortgage, consider refinancing at a lower rate and taking years off your mortgage. 


Tax-loss Harvesting

The stock market has been on a bull run for the last 11 years. An investor may have significant gains on positions in their non-retirement portfolio. With the markets having taken a step back, it may be a good time to review your non-retirement portfolio. Look to see if any positions have losses to offset any gains you have been stuck holding. This strategy will help realign the portfolio with your goals and desired portfolio allocation, while reducing any capital gains tax.


Roth Conversions

Now may be an advantageous time to review if Roth conversions make sense for your income plan. Consider moving funds from your pretax IRA to your after-tax Roth IRA. This will ensure that when the market recovers, all those future gains will then be tax free.


Health Savings Account Rollover

If you have a high deductible health plan, you can make a once in a lifetime rollover from your IRA to health savings account (HSA). The limit you can rollover is up to your one year HSA contribution limit. The 2020 maximum contribution limits for plans with family coverage is $7,100 and for plans with single coverage it is $3,550. As mentioned with the Roth conversions above, now any future market gains will be tax free when used for medical expenses.


Invest More:

It is anybody’s guess when we will hit the bottom, but if you are a long-term investor, things look rather attractive right now. Consider adding funds over time at lower prices to help your accounts grow even quicker on the rebound.


Additional Savings Idea - Future Vacation Planning

A vacation is an investment for your happiness, so it should be mentioned in this blog. With flights and vacations discounted significantly, now may be a good time to book your year-end family vacation. Although it is uncertain when the virus will end, it may be beneficial to use a portion of your savings from booking your trip for travel insurance protection. Many airlines, cruise lines, and hotel brands have changed their cancellation waivers, so be sure to review your travel insurance options when booking your next flight or vacation getaway.