Mid Year Planning News

Mid Year Planning News

July 04, 2021

Summer has arrived, cicadas have left the DC Metro area, and we're halfway through what's turning out to be a much better year than last.

We hope your Independence Day weekend was as relaxing and enjoyable as ours was. The weather certainly was kind to us!

Upcoming Scheduling and Agenda Topics:

Our mid-year Investment Review zoom calls are in full swing. If you haven't already scheduled yours, there are openings through July 21st. If your summer is too busy for a call, don't worry - we'll send you an email in late July with highlights of your investments and a draft Investment Policy Statement, and then plan to review everything with you during our fall meetings in September and October.

August is reserved for catching up on our action items from the Investment Review calls, preparing for fall meetings, and taking very important time out of the office. Debbie will be in Germany seeing her latest grandchild for the first time (he was born in March) and playing with her two other grandsons. Irina has a couple of weddings in Russia in mid-August. Courtney will be holding the fort until we're back and is available for time critical issues.

For your fall financial review meeting, topics include updating your financial plan projections, confirming with you that the Investment Policy Statement we are using for managing your investments (our "guidelines and guard rails document) reflects your preferences, collecting any new tax planning information from you, delving more deeply into estate planning topics, and covering any "timely" issues that you'd like to discuss with us.

Next year, we'll be covering insurances during our review meetings. We'll start with your auto and home liability coverage (called Property and Casualty) in the spring. Life, long term disability, and/or long term care coverage are on our agenda for later in 2022. Please upload your most recent declaration pages to the secure document vault on the eMoney site by the end of this year. If you would like to discuss insurances earlier than next year, please let us know so that we can add this to your agenda for your fall meeting.

Then, our late winter/spring financial review meetings will run from mid February through mid-April. In addition to liability insurance, we'll again review your financial plan and investments, update your action items, and catch up with what's new in your life.

Estate Planning:

Estate planning is such a lofty sounding name for a very important (and sometimes a bit boring) array of life planning topics. Ranging from who gets your stuff when you die to who is going to make tough decisions for you if you are incapacitated or who helps you with your finances when it gets to hard to who talks to your doctors at the hospital to tax reduction strategies and liability protection.

We started the conversation this summer with beneficiary reviews of client accounts that we directly manage. And we hope that all our clients have double checked that they have both primary and secondary/contingent beneficiaries listed on all their investment accounts (and life insurance policies). Even if you have reviewed these before, it's good to do this periodically.

We'll continue the conversation this fall by broadening the scope to wills, trusts, medical and financial powers of attorney, HIPAA documents, beneficiary designations, account titling, bequests to family as well as charitable giving. Please be thinking about your current situation and what you'd like to discuss with us at your next meeting. We'll be asking you for an update on where your documentation stands and what your current thinking is.

Social Security:

we've had some interesting conversations with clients about Social Security benefits. Why are your neighbors claiming at 62 compared to their full retirement age of 66 or 67, while others wait until the maximum benefit of age 70? What are the best strategies for a married couple, unmarried couples, and single (never married, divorced, or widowed).

The claiming decision can be based on many factors including your feelings about the health and future of Social Security program funding, what's best for you given your own set of circumstances (health, longevity expectations, finances), what will be your source of income while delaying, etc.

Fortunately, we have software that runs multiple scenarios so we can help you make the right decision for you.You can see what your own "breakeven age" would be for claiming early versus later (in other words, how old will you be before you start making more money by delaying than if you claimed earlier?). We'll walk through graphs, charts, and colorful grids if you enjoy seeing the "nitty gritty" or we can provide you with a summary report that includes a menu of your different options.

Let us know if you'd like to add this to an upcoming meeting agenda (fall or spring) and send us your most recent Social Security benefits statement and earnings history XML file (both available for download on the SSA.gov website).

Investment Option Changes Coming to the Federal Thrift Savings Plan (finally):

In the summer of 2022, the Federal Thrift Savings Plan is going to launch a new mutual fund window which will include Environmental, Social and Governance (ESG) options. When this window is rolled out, it will have been 13 years since the Thrift Plan received authority to create such a window. Barrons ran an article on the upcoming change which I am sharing below.   


We are very excited about the opportunities that our Federal government clients have for expanded investment options. Next summer's Investment Review call agenda will include information about the new investment options and we'll share our recommendations specifically tailored for each of our clients.

Where to put your cash?

Another popular topic is where can we put our cash to make more money? Unfortunately, the anwers is "very few places." With the Federal Reserve having pumped so much money into the economy to keep things going during COVID, while it did keep us out of a recession, it also means that banks are paying very little in interest. And bonds and bond funds are losing a little bit of money (not a lot, however their valuations have decreased even as they continue to pay out dividends). We anticipate that bonds and bank interest will gradually increase next year, thought it's no fun to wait.

In the interim, Capital One 360 Bank remains among the higher interest rate paying banks.

And if you are OK with having your money tied up for 1, 2, or 3 years, there are some Community Development Finance Institutions that are paying a bit more (because your money is less liquid). We remain fans of both Calvert Notes and also a newer organization MyCNotes.com. The latter of which is paying 2.5% interest on a 30-month note (and there is a 10% quarterly liquidity opportunity). This means that if you invest $10,000 today, you can take out $1000 every 3 months all while earning 2.5%. This sounds like a great "retirement paycheck" option.

Check out our earlier blog post about both MyCNotes.com and Calvert Community Notes.