As more and more conversations come up regarding future increases to tax rates, many people are wondering, is this the right time to convert a Traditional IRA to a Roth IRA?

A number of factors in 2020 have created an environment that may make it advantageous to consider converting. The steps taken by the U.S. government to combat the COVID-19 outbreak have altered the landscape for retirement assets and how they should be allocated.

Today, IRAs are one of the primary vehicles that Americans use to fund their retirement. In fact, 43.9 million households held at least one IRA in 2017, with 35.1 million households holding Traditional IRAs and 24.9 million holding Roth IRAs, and some households holding both [Investment Company Institute]. Additionally, due to changes in the tax laws of 2010, there are no age limits or income requirements to be able to convert a Traditional IRA to a Roth IRA, but keep in mind you will have a tax liability on the amount that you convert.

2020 is one for the record books. We have experienced dramatic market swings with the unprecedented drops in March, to the new highs and lows in October.

A few months ago, people were afraid to open and look at their 401(k) statement. The historical lows could not have hit at a worse time for first quarter statements. In early October, with the markets hitting new highs, people couldn’t wait to see the statements. Which leads us to the question: What do we advise people to do now?

While some investing wisdom is timeless and can be as simple as “save early and often,” behavioral finance shows us that the best advice is one that can be followed and adhered to long enough for it to deliver. 

Priorities in one's 20s are and should be different than those in one's 40s and beyond. 2020 has put a wrinkle in even the best laid plans and added other layers of uncertainties to be taken into account for both short- and long-term financial decisions. Here are some steps to consider in the different phases of financial life.

Many of us are not particularly fond of surprises, especially later in life and certainly not when we are looking to understand what our Social Security benefit will be upon retirement. But if you are eligible for a pension based on work you did for a government entity or nonprofit organization and did not pay the Social Security tax on your wages, you may be in for a surprise.

Known as the Windfall Elimination Provision (WEP), this potential reduction in Social Security benefits is a federal law that impacts those who have worked in a job where pay was subject to Social Security tax withholding, and also have worked in another job where Social Security tax is not withheld. Employees in the public sector like teachers or in the civil service are the prime examples, but if your employer was outside the U.S. you may also be affected.

As life expectancy increases and stock market volatility seems to grow, annuities are gaining in popularity as people seek safety for their money. Last year, fixed annuities saw $139.8 billion in sales, which is an all-time high, according to InvestmentNews.

It is essential to share some truths about annuities and explain the risks of these seemingly safe products which are sold as “can’t miss” solutions. 

How to choose the best financial advisor for you

Looking for a female financial advisor? At Carnegie Investment Counsel, we asked three of our female financial advisors for tips about how to find the best investment advisor for you. They emphasized that team members at Carnegie, male or female, focus on providing a customized and hands-on approach to services from financial planning to portfolio management. The point is to assess any advisor for the best fit when choosing a long-term financial partner.

As 2019 was ending, I was reading a few articles and blog posts recapping the last decade of stock market returns.

Throughout this period, there were many instances where you could have been scared out of the market or sought signals that would indicate a “top” in the market.

For example, remember in 2013 when actress Mila Kunis said she was going from cash into stocks? The S&P 500 is up about 140 percent since she made that announcement.

Or how about in 2016 when the cover of Barron’s (a popular financial magazine) boasted “Get Ready for Dow 20,000?” The Dow Jones Industrial Average is in shouting distance of 30,000 or about 57 percent higher from the date of publication.

How the new SECURE ACT rules may change how you save for retirement

In mid-December 2019, the “Setting Every Community Up for Retirement Enhancement” (SECURE) Act was included as part of a massive spending bill approved by Congress.

Notably, this may be one of the most significant pieces of retirement legislation in years.  

The Big S-Curve

The most common things that typical market observers are currently worried about (partially fueled by the media) revolve around politics, the trade war, interest rates and the timing/depth of the next recession.

It is much less common to hear someone talking about the potential positives. Fears like this are nothing new, and in fact, I cannot remember a time in my career when there wasn't a slew of fears to worry about.

Anyone who follows the equity markets on a stock by stock (or company by company) basis (like me) has likely noticed that the market has experienced a clear shift in behavior since early September.

Some examples of this include:

• Significant strength in the Financial sector with many financial stocks hitting all-time highs
• Significant strength in Industrials, with many at new highs
• A clear shift toward value stocks and away from smaller/newer growth stocks
• A shift away from the previous winners and into the previous losers
• Many of the “S-Curve” plays – see blog from 11/4/19 – have declined
• Weakness in REITS, utilities and consumer staples stocks 
• All-time highs in the major market indices