Broker Check

The Roaring 20's

April 08, 2020

The Roaring 20’s

It is crucial for investors in all age demographics to be aware of the upcoming changes and events that will affect retirement portfolios in the near future.

One major event that will be occurring later this year is the presidential election. Since 1932, the S&P 500 Index has risen an average of 10% in presidential election years, almost twice the return in non – election years, regardless of which party wins the White House. Allocating, diversifying and searching for value in all sectors of the market is pivotal during this time period. Even more reason to meet with your financial consultant about the health of your retirement portfolio. 

The second major event that occurred in late December of 2019 was the SECURE ACT (Setting Every Community Up For Retirement Enhancement). This law which took into effect January 1, 2020 brings many new key elements to retirement portfolio’s. One of the major headlines of the Secure Act was the age in which retirement plan participants need to take their required minimum distribution. In prior years this age was 70 ½ but will now increase to 72 (Age 70½ on or before December 31, 2019 are required to take their RMD). This will allow every IRA account owner to make contributions after the age of 70½ if they have earned income (RMD and investment income do not qualify as earned income).

The Act, along with many other elements, mandates non-spouse beneficiaries to deplete the inherited IRA amount within 10 years instead of the lifetime expectancy option.  It is essential that you meet with your financial consultant and/or CPA to review all the upcoming events to ensure that you capture the maximum return for the least amount of risk in your retirement portfolio.

Investors cannot directly invest in indices. Past performance does not guarantee future results.