• Harry N. Stout

Making the Most of Your Financial Options in 2020


Written by: Michele Burkholder, Founder of The Burkholder Team


It’s that time of year. The leaves are starting to turn colors, my morning runs are in the dark, and my fourth quarter wrap up gets started. This time of year, we help our clients take advantage of financial planning steps they can take to improve their current year position and set them up for success in 2021. Since the SECURE Act (Setting Every Community Up for Retirement Enhancement) and the CARES Act (Coronavirus Aid Relief and Economic Security Act) were both enacted in 2020, there are some financial planning changes that you should be aware of. If you haven’t already taken the following actions in 2020, now is the time. Here are the items you need to consider:

1. Qualified plan contributions: Have you maximized your taxed deferred savings for 2020?

a. Company Retirement Plan – If able, contribute enough to maximize the employer match.

b. Individual Retirement Account – If eligible, you can contribute $6,000.00 to an Individual Retirement Account.

c. Catch-up – If you are over 50 and are eligible, you can contribute an additional $5,000 to your company retirement plan and $1,000 to an IRA.

d. Heath Savings Account – the maximum amount you can put into your HSA is around $3,500 if you’re an individual, $7,000 if you have family coverage.


2. Review / Update your beneficiaries: Make any needed updates to the beneficiary portion of your bank accounts, retirement accounts, life insurance policies and annuities. This is important because the beneficiary listed on life insurance policies and investment accounts take precedence over your will. Have you gotten married or had a child within the last 12 months? Or perhaps a loved one has exited your life through a divorce or a death. Now is a good time to make sure they represent your current wishes.


3. Make sure you have adequate protection coverage: Fall is the time most companies have benefit enrollment. Take advantage of your employers Life and Disability Coverage, but it may not be enough. Consider Life Insurance Coverage outside of your employer to ensure you never have a gap in coverage if you change jobs. Also, if you are 50 or older, and don’t have a plan to cover Long Term Care, now is the time to look at your options.


4. Review your asset Allocation: 2020 has been a volatile year in the stock market. The uncertainty surrounding COVID-19 and the fall election will keep things volatile. Now is the time to review your asset allocation to make sure it still is designed to meet your Risk Tolerance.


5. Required Minimum Distributions: CARE’s act suspended RMDs for 2020 (including beneficiary IRAs). If you don’t need the money for living expenses, consider not taking them, which will reduce your taxable income and allow the money to continue to grow.


6. Review Expenses: Review your credit card and bank statements. Are there any apps or services that you are automatically paying for, but no longer using? Get rid of them now before you spend another unrealized expense for 2021.


7. Prioritize Debt: Take a look at your debt and prioritize by balance and interest rate. Pay off the high interest rate cards first. If there is a small balance remaining on another account. Pay it off. The satisfaction of crossing it off the list helps you stay motivated to keep going.


8. Student Debt: The SECURE Act allows parents to use 529 plans to repay student loans, up to $10,000 per beneficiary. If you have any left-over money in your college savings plans after your student graduates you can now use 529 funds to pay up to $10,000 in student debt over the course of the student’s lifetime. The CARES act suspended the payment of student loans and the accrual of interest through December 2020. If you have excess disposable income, it’s a good time to reduce some of your student debt principal – if you don’t have high interested credit card debt.


9. Consider a Roth IRA Conversion: If your taxes are lower this year, due to an employment change, it may be a good time to consider a Roth Conversion in 2020.

Before you take any action, make sure you consult with your Tax Advisor and work with a Financial Professional to maximize your Financial Options. It’s not too late to improve your 2020 financial picture.

Michele Burkholder* is the Founder of The Burkholder Team, a family financial practice whose mission is to Provide Families, Business Owners & Their Employees Optimal Guidance to Help Them Reach Their Financial Goals.

* Registered Representative of, and Securities and Investment Advisory services offered through Hornor, Townsend & Kent, LLC. (HTK). Registered Investment Advisor, Member FINRA/SIPC.


1847Financial | 161 Washington Street, Suite 700 | Conshohocken, PA 19428 | Phone 610.771.0800 | Fax 610.771.100 HTK is a wholly owned subsidiary of Penn Mutual. The Burkholder Team and 1847Financial are not affiliated with Hornor, Townsend & Kent, LLC

For Educational Purposes Only – Not to be relied on as financial, tax, or legal advice. All investing involves risk and no investment strategy can assure a profit or protect against a loss in a down market. Past performance is not a reliable indicator of future results.

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2020 by NelsonWells, LLC

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