Broker Check

How to Handle Market Declines, RMD's Waived

April 09, 2020

First, I want to wish you all a Happy Passover or Happy Easter, as applies to you.  I love this season because the Christian and Jewish traditions intersect.   I pray that as you gather your families together via Zoom, Facetime, etc., or telephone, to celebrate these special days, that you will feel blessed and grateful.  In the midst of all the Pandemic chaos, we have much for which to be thankful. 

 I’m attaching a brochure from American Funds about how to handle market declines.  I would like to bring your attention to the section “missing just a few of the market’s best days can hurt investment returns”.   I know when the market is down, the gut reaction is to pull out, and then plan to get back into the market when things look better.  The unfortunate thing is that the best days in the market often occur within a couple of weeks of the worst days and if you aren’t in the market on the best days, you miss it.  The graphic powerfully illustrates the reasons to stay the course.

 That being said, there is never a bad time to reassess your personal situation:

  • Realistically assess your risk tolerance.  Unfortunately, I find for a lot of people, risk tolerance is typically lower when there is market volatility and higher when things are looking rosy :-),
  • Review your life goals,
  • Determine what the purpose of your money is,
  • Define your time horizon. 

If you have been implementing the comprehensive financial planning principles we have historically, currently and continually advocate, our advice is to do exactly what you were doing BEFORE this current panic showed up, unless something has significantly changed in your long term plan.

A few other items I want to cover.  For those of you who are mandated to take Required Minimum Distributions (RMDs), the good news is that in the CARES Act, there is a provision that waives the RMD requirement for 2020.  This applies to RMD’s from your work plans: 401(k), 457, 403(b), SIMPLE IRAs, SEP IRAs, and traditional IRA accounts and Beneficiary IRA accounts.  If you use this money to live, then the waiver isn’t of much value to you.  But if you don’t need it, this is an opportunity.

If you took your RMD already, you may be able to return it if you can return it before 60 days from the date you received it, and you have done no other direct rollover in the last 12 months. Not having done another direct rollover in the last year is an important distinction.  If you have questions, please ask me.  This does not apply to Beneficiary IRA accounts.  If you already took your RMD from your Beneficiary IRA account, you cannot return it under any circumstances. 

 As always, please remember, you only have 168 hours to live your life this and every week.  Spend your 168 hours doing the things that only you can do – the things that are truly important to you.  Spend more time with the people you love.  (And tell them you love them, too.)  If you can’t do it in person, do it via skype or zoom.  Do activities to help improve your health and fitness and spiritual life.  Engage in activities that give joy to others (and see how much you benefit, too).  Laugh out loud.  Express your creativity.  Play a game.  Take a friend to lunch (or for the time being send them lunch via one of the food delivery services and do a skype or zoom meeting and eat lunch together).  Donate your time (if possible) or resources to a worthy charity.  Change your routine.  Live a high-performance life! 

If you have any questions or concerns, PLEASE email me at, call me at 954-983-5600 Ext. 119, or text me at 954-880-3410.  My assistant, Danielle, can be reached at 954-983-5600 Ext. 154.  The physical office is closed but we are all working remotely.  I can set up a zoom meeting so we can be “face-to-face” from wherever we are.   If we don’t pick up your call instantly, please leave a message.  We promise to return your call as soon as possible. 

 Stay safe and be well.

 How to handle market declines