Towerpoint Wealth Special Report Lemonade out of Lemons 3-27-2020
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Lemonade out of Lemons


Towerpoint Wealth – Special Report

Obviously none of us can control the financial markets, the economy, or decisions that our elected leaders make. However, we can help our clients and their families plan around these considerations, and respond in the most economically beneficial way possible.

Highlighted below are 14 strategic ideas that we believe could help you take advantage of today’s unprecedented societal, economic, and market conditions.


1. Convert an IRA to Roth IRA – The balance of your current IRA is probably lower compared to the beginning of the year. You can convert some, or all, of the investments inside your Traditional IRA to a Roth IRA. We are confident that any converted investments will eventually recover in value, and inside of Roth IRA this appreciation will occur tax free. Note: Ordinary income taxes are owed on the value of any investments that are converted from a Traditional IRA to a Roth.

2. Reduce the long-end of a bond ladder (and timing) – Most long-term bonds have seen a jump in value. While not inconceivable, it is hard to imagine there is much upside room given where interest rates are. Also, consider margins against these if you need liquidity short-term as rates are low. There are a lot of bonds being sold right now, so pricing should be better in a couple months.

3. Quicken the pace of your systematic, or Dollar Cost Averaging, investment program – If you have a plan to invest cash over the next 12 months, consider accelerating it during this period of market weakness.

4. Refinance your home or other debt – Review the interest rate on your mortgage to see if it makes sense to refinance. Many people are doing this right now, and it is important to be patient with your lender or mortgage broker.

5. Harvest investment tax losses now – Click HERE for an excellent Forbes article discussing this strategy.

6. Reduce or completely unwind from a concentrated stock position. If you own an individual stock that represents more than 20 percent of your overall portfolio and has declined significantly in value, now may be a good time to sell some or all of it with smaller capital gains tax consequences.

7. Accelerate the funding of retirement accounts (401K, 457s, 403B, IRA, SEPIRA, etc.) or Education Savings Plans – If you have and normally contribute to accounts like these, and have the financial wherewithal and free cash flow to do so, consider speeding it up.

8. Don’t fret about April 15 – The IRS has extended the April 15 tax filing deadline to July 15. Preserve your cash until the new filing date if you owe Uncle Sam. 9. Family Gifting – Do not gift family members any investments owned at a loss. Instead, sell the investment yourself to “harvest” the tax loss (see #5 above). Then, gift the cash instead.

10. Use this “extra” free time to update and review your estate plan. Don’t forget health care proxies, powers of attorney, living wills, advance directives, and retirement plan beneficiary designations.

Business Owners

11. Look into and leverage the myriad of new SBA lending programs – The new Coronavirus Stimulus Bill provides $349 billion to guarantee loans to small businesses.

12. Consider pulling cash from your line of credit, even if you don’t yet need it – We have seen banks reduce lines of credit during difficult economic times, possibly right at a time when you may need it most.

13. Consider strategic tax moves and review the new marginal tax rates, if your business income will be lower due to the crisis.

14. If you own your building, consider a Sale-Leaseback, especially now with the current interest rate environment. A Sale-Leaseback is when you sell the building your business occupies, and then sign a long-term lease renting it back. This could provide additional liquidity that could be put to work in other areas of your business, and also help diversify the overall percentage of assets you have tied directly to the business.

At Towerpoint Wealth, we are here for you, and we remain very confident that this crisis will be temporary. In the meantime, stay safe, stay healthy, stay calm, and carry on.

Joseph Eschleman, CIMA® | President | Towerpoint Wealth, LLC

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