August 2020 Newsletter

Given the devastation and loss caused by the California wildfires in recent years, many insurance companies are either increasing their homeowners insurance rates substantially—some as high as 300%—and even dropping coverage all together. Home insurance providers have declined to renew policies for tens of thousands of homeowners across the state, and regulators expect more non-renewals in the coming months.¹

Last week, my homeowners insurance company (which most of you know for their annually billed automobile towing service!) called to inform me that my annual premium would be doubling. I was shocked and frustrated. How could that possibly be? I had been a loyal customer for over 45 years, ever since I bought my first auto insurance policy back when I was just 15 years old…and I had never made any claims on my homeowners policy. To add insult to injury, the company proceeded to inform me that they outright cancelled the coverage on my other property entirely. Wow!

I soon discovered that I am not alone.

I have spoken with several clients and friends that experienced similar treatment and were facing the same hurdles in finding alternate solutions. While it took time, patience, and some investigative work, I ultimately found a reputable insurer that could cover both of my properties at a very reasonable price.

Here’s what I learned:

Click here to read more of this article by John Hayman, CFP®, Founder, Chief Investment Officer at Capital Advantage, Inc.

All taxpayers who have taken a required minimum distribution (RMD) in 2020 from an eligible retirement account (including those taken in January and February of this year) have the opportunity to roll those funds back into a retirement account by August 31, 2020 (IRS Notice 2020-51).

In response to the coronavirus global pandemic, Congress passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act on March 27, 2020. The CARES Act was enacted to ease the effects of the economic damage caused by the COVID-19 pandemic by providing a wide range of relief efforts to help individuals, businesses, healthcare entities, and state and local governments meet short-term cashflow demands.

One of the provisions of the CARES Act is the waiver of 2020 required minimum distributions (RMDs), which allows taxpayers with defined-contribution plans (401(k)s, 403(b)s, IRAs,etc.) to skip 2020 RMD requirements, including anyone who turned age 70 1/2 in 2019 and would have had to take their first RMD by April 1, 2020. Please note that this waiver does not apply to defined-benefit plans.

Many people had taken distributions early in the year and wanted to put them back into a retirement account but were faced with limitations caused by the 60-day rollover and other distribution rules. In June 2020, the IRS addressed this problem and released Notice 2020-51 (Guidance on Waiver of 2020 Required Minimum Distributions) extending the rollover deadline to August 31, 2020.