Investment News

The IRS announced that the starting date for when it would accept and process 2021 tax-year returns was Monday, January 24, 2022. This announcement marks the official beginning of tax season. No one likes filing their taxes, but here are some tips that can make filing easier, speed up your refund, and possibly save you some money.

Tips for Making Filing Easier


Make sure you have received Form W-2 and other earnings information, such as Form 1099, from employers and payers. The dates for furnishing such information to recipients vary by form, but they are generally not required before February 1, 2022. You may need to allow additional time for mail delivery.

If you received advance payments of the child tax credit, the IRS should send you a letter with information about those payments. You will need this information to file your taxes. Taxpayers who didn’t receive the full 2021 economic impact payment may be able to claim the Recovery Rebate Credit on their 2021 tax return. Most taxpayers will also receive a letter from the IRS detailing their 2021 Economic Impact Payment.

The IRS strongly recommends electronic filing and direct deposit for the fastest, most accurate processing of tax returns, payments, and refunds. Check for the latest tax information, including how to reconcile advance payments of the child tax credit or claim a recovery rebate credit for missing stimulus payments.


Key Filing Dates

Here are several important dates to keep in mind:

  • January 14. IRS Free File opened. Free File allows you to file your federal income tax return for free if your adjusted gross income (AGI) is $73,000 or less.
  • January 24. IRS began accepting and processing individual tax returns.
  • April 18. Deadline for filing 2021 tax returns (or requesting an extension) for most taxpayers.
  • April 19. Deadline for filing 2021 tax returns (or requesting an extension) for taxpayers who live in Maine or Massachusetts.
  • October 17. Deadline to file for those who requested an extension on their 2021 tax returns.

The IRS encourages taxpayers seeking a tax refund to file their tax returns as soon as possible. The IRS anticipates most tax refunds being issued within 21 days of the IRS receiving a tax return if the return is filed electronically, any tax refund is delivered through direct deposit, and there are no issues with the tax return. To avoid delays in processing, the IRS encourages people to avoid paper tax returns whenever possible.

Matthew A Treskovich | CFA, CPA/PFS, CITP, CMA, CFP®, AEP®, MBA, CLU, ChFC
Chief Investment Officer

Last year was a year of turmoil for most of us. The pandemic and the election were just a few of the events that impacted our nation in 2020. Fortunately, 2021 has started on a brighter note, with the arrival of vaccines that promise to bring life closer to normal. If you are looking for a fresh start this year, your personal finances are a great place to begin.

Examine Your Budget

The first step in refreshing your finances is to examine how much you spend, and how much you save. Identify your income and expenses, and then compare them to make sure you are spending less than you earn. Hopefully, you were able to stay the course during the pandemic. If not, you may need to cut back on some spending, or look for way to lower your monthly bills.

Once you have a workable budget in place, it’s important to stick with it. The temptation to stray from a budget is natural. Here are a few tips to make sticking with your budget easier:

  • Make budgeting a part of your daily routine
  • Build occasional rewards into your budget
  • Evaluate your budget on a regular basis and make changes if needed
  • Use budgeting software or an app to help keep track of your finances

Pay Down Your Debt

Reducing debt is part of any healthy financial plan. Paying down “unproductive debt” as quickly as possible is usually a good idea. Student loan debt, high-interest-rate auto loans, and credit card balances are all examples of “unproductive debt”. Start by tracking all of your balances and being mindful of interest rates and hidden fees. Next, optimize your repayments by paying off any high-interest debt first and/or taking advantage of debt consolidation/refinancing programs.

If the financial impact of the pandemic has made it difficult for you to pay down your debt, you may want to contact your lenders to see if they offer financial assistance. Many lenders may be willing to work with you by waiving interest and certain fees or allowing you to delay, adjust, or even skip some payments.

Think About Your Financial Goals

While the pandemic may have sidelined or stalled some of your financial goals, now is a good time to regain your focus. Take a look at the financial goals you set for yourself last year. Perhaps you wanted to increase your emergency fund or save money for a down payment on a home. Maybe you wanted to invest more money towards your retirement. Were you able to accomplish your goals despite any setbacks brought about by the pandemic? Do you have any new goals you would like to achieve in 2021? Finally, if your personal or financial circumstances changed, will you need to reprioritize your goals?

Make Sure Your Investment Portfolio is Still on Track

Despite the pandemic, the U.S. stock market ended 2020 at an all-time high. But that doesn’t necessarily mean your investment portfolio is still targeting your financial goals. When evaluating your investment portfolio, you’ll want to ask yourself the following questions:

  • Do I still have the same time horizon for investing as I did last year or prior to the pandemic?
  • Has my tolerance for risk changed?
  • Do I currently have an increased need for liquidity?
  • Does any investment now represent too large (or too small) a part of my portfolio?

Market volatility and current events aren’t usually a good reason to change your long term investment strategy. If your goals have changed, or your finances have changed, a portfolio review can help you keep your investments aligned with your financial plan.

Matthew A Treskovich | CPA/PFS, CITP, CMA, CFP®, AEP®, MBA, CLU, ChFC
Chief Investment Officer

Election day is a few months away, and it’s natural to wonder what the possible outcomes might mean for your portfolio. Fortunately for investors, there are many previous elections we can study to give us insight into how the market might react.

Policy Matters, Politics Doesn’t

The most important thing to keep in mind is that policy matters to long term investment returns, but politics doesn’t. Everything that will happen between today and election day is just politics. As the election gets closer, both sides will undoubtedly ramp up their rhetoric. Political vitriol can cause market volatility, but it doesn’t change the fundamentals of the economy. No matter what the outcome of the election is, we will be well into 2021 before policy changes are made. History also shows us that policy changes rarely work out as planned, and often have unexpected effects. For long term investors, there is no reason to rush to make portfolio changes just because it is an election year.

To understand the future, study the past.

The way the markets react to elections and changes of power in Washington is remarkably consistent over time. Historically, when Republicans control Congress and the White House, the markets tend to go up and the economy tends to grow. When Democrats control Congress and the White House, the economy tends to grow and the markets tend to go up. When there is divided government in Washington, the markets tend to go up, and more often than not, the economy grows.

History tells us that during the run-up to an election, market volatility increases. Despite the increased volatility, the market most often trades sideways in the months ahead of an election. Uncertainty is a far greater problem for the markets than who wins or loses an election. Once the results are known, long-term trends take over.

Policy changes might have an impact on individual companies or entire industries. Policy changes won’t derail the long-term trends that have created tremendous returns for investors over the past 100 years. American capitalism is still the engine that powers the global economy. Long-term investors in American businesses will continue to be rewarded no matter who wins the election.

Matthew A Treskovich | CPA/PFS, CITP, CMA, CFP®, AEP®, MBA, CLU, ChFC, FLMI
Chief Investment Officer

In June of 2019 the Securities and Exchange Commission approved several new rules governing how financial firms work with individual investors. The new rules were designed to help consumers understand the nature of the relationship they have with a financial services firm and the people who work for that firm. These rules apply to both brokers, and also fiduciary investment advisors.

What is Form CRS?

The Securities and Exchange Commission created a new form, called the Customer Relationship Summary, also known as “Form CRS”. The regulations require brokers and investment advisors to deliver a copy of Form CRS to their customers. The new form is also required to be posted on the website of the broker or investment advisor. The new form is intended to make it easier for you to decide whether you should hire a particular firm or individual.

The relationship summary is required to be short and written in understandable language. The form should contain an introduction which describes how the firm is regulated – as a broker, or an investment advisor, or both. The relationships and services section of the document describes the services the financial firm may provide. Form CRS also has a summary of the fees, costs, and potential conflicts of interest an advisor may have.

In theory, Form CRS should make it easier for you to understand whether your advisor is a fiduciary, legally obligated to act in your best interest. In practice, the Dual Registration Loophole will continue to cause confusion among consumers.

Watch Out for the Dual Registration Loophole

The Securities and Exchange Commission regulates two types of firms: broker-dealers (also called Brokers) and Registered Investment Advisors. Registered Investment Advisors are fiduciaries. A fiduciary is someone legally obligated to act in your best interest. Brokers are not fiduciaries. Brokers have a much lower standard of conduct when they make recommendations. Brokers are allowed to accept commissions for selling financial products. This often creates a conflict of interest. When a Broker recommends an investment product, you never know if it is the best thing for you, or it simply pays the best commission to the broker.

Some firms are registered as both Brokers and as Registered Investment Advisors. This is the Dual Registration Loophole that allows some advisors to market themselves as fiduciaries while still collecting commissions. In a perfect world, Form CRS would clearly describe when your advisor is acting as a fiduciary, and when they are acting as a broker. Firms taking advantage of this loophole can publish two separate versions of Form CRS. One form will describe the firm’s activities as a fiduciary, and another form will disclose the firm’s activities as a broker. If you choose a firm that uses dual registration, make sure you understand when they are acting as a broker, and when they are acting as a fiduciary investment advisor.

Choosing a financial advisor can be a life-changing decision. Form CRS can give you important information to help you make that decision wisely. Take the time to read a prospective advisor’s Form CRS and understand the services they actually provide, and how they make money. Most importantly, understand whether your advisor is a fiduciary, obligated to work in your best interest, or a broker who is free to put their own interest first.

Matthew A Treskovich | CPA/PFS, CITP, CMA, CFP®, AEP®, MBA, CLU, ChFC, FLMI
Chief Investment Officer

Grand Re-Opening

Across the globe, the pandemic situation seems to be improving. Many nations continue to struggle with the economic fallout, but case counts and mortality rates hint that things are getting better. In the United States, the first wave of COVID-19 is waning, and many states are looking toward reopening their economies. Public health authorities remain concerned that a second wave of the virus will emerge. Meanwhile, investors are contemplating the possible shape of the recovery. The shape of the economic recovery will depend on how willing and able consumers are to return to their old spending habits.

Employment and Consumer Spending

Prior to the COVID-19 crisis, unemployment was at 50-year lows. Widespread unemployment is an unfortunate effect of the public health measures used to contain the virus. Economic data shows that tens of millions of Americans have already filed for unemployment benefits. The unemployment rate is expected to peak at 20% or perhaps higher. Wise investors know that the employment situation is “old news” as far as the markets are concerned. It is very possible to see the market go up on news that is “less bad” than expected, even while the headlines are bleak.

In times of crisis, Americans have historically reacted by saving a bit more. Many retailers, restaurants, and most entertainment venues are now closed, increasing the savings effect dramatically. In March of 2020, the personal savings rate registered the largest one-month increase on record, and now sits at the highest level in nearly 40 years. The last time the personal savings rate was this high was November 1981. While it is possible this increase in savings is a “new normal”, it is much more likely Americans will rapidly return to their free-spending ways. Using some “walking around sense”, it is not hard to see that most places that people can shop, are full of people shopping. New Year’s Resolutions usually expire a few weeks into January. This new trend of saving will probably last about as long as it takes businesses to reopen, and then consumers will hit the stores with cash to spend.

This Recovery Brought to You by the Letters V, U, L, and W

Investors and the markets are now contemplating what shape the recovery will take. The four most likely possibilities are described as being in the shape of a V, a U, an L, or a W.

  • A V-shaped recovery is still possible, but rarely in history is an economic recovery as rapid as the decline.
  • A U-shaped recovery is also possible, if fear of the disease keeps consumers home and businesses closed even after restrictions are lifted.
  • For much of March, the markets were concerned the recovery would take the shape of an L, a sharp decline followed by a long period of stagnation. The swift public health response, and massive relief and stimulus, make this unlikely.
  • If a second wave of the virus emerges, the recovery might take the shape of a W, especially if parts of the economy need to be closed again.

The good news for investors is that government officials and businesses now have much more experience with containment than they did a few months ago. If a second wave emerges, this experience will make future containment efforts more effective and less expensive. In the meantime, sentiment among consumers and businesses alike hint that the recovery will most likely be somewhere between a V and a U.

It is too soon to tell what shape the recovery will take, but we do know that the economy and the markets will recover. We also know that old habits die hard, and US consumers are very likely to continue to spend as they have in the past. For investors in great American businesses, the future is still bright.

Matthew A Treskovich | CPA/PFS, CITP, CMA, CFP®, AEP®, MBA, CLU, ChFC, FLMI
Chief Investment Officer

Staying calm during times of crisis is nothing new to those who have worked in the public sector – in fact it is a job requirement. However, we are currently experiencing a worldwide crisis on a scale that most of us have never experienced. The Coronavirus pandemic has changed the world we live in, upending our lives as well as the global financial markets. In addition to the stress of worrying about the health of your loved ones, you have the added stress of worrying about the steep decline in the value of your investments. This is especially troubling for those who are retired or nearing retirement. The best investment strategy in times of extreme volatility is to do what you have been trained to do and remain calm, and don’t even consider changing your investments! We have learned throughout our careers that decisions based on emotion are usually poor decisions that we later regret. The market will recover in time, and though nobody knows how long that will take, history teaches us that it will recover. Don’t let fear drive you to make bad financial decisions.

Required Minimum Distributions (RMD)
The SECURE Act, which took effect on January 1st of this year, changed the age for starting RMD’s from 70-1/2 to age 72 for those who had not yet reached age 70-1/2 prior to that date. Additionally, in response to the Coronavirus crisis, our government passed the CARES Act which provides financial relief on several fronts including suspending the RMD requirement for 2020 for IRAs and defined contribution retirement plans such as 401(k), 403(b), and 457(b). This also applied to inherited IRAs! For CPS managed accounts held at Fidelity, if you are receiving periodic/recurring distributions, these will continue as scheduled unless you contact your advisor and request a change. If within the past 60 days you made a 2020 RMD, you may be able to return the RMD to your account. Talk to your advisor to see if you qualify, and this does not apply to inherited IRAs. Those with accounts held at custodians other than Fidelity should contact your advisor since each custodian is implementing these changes differently.

FRS Investment Plan Members
Required minimum distributions are waived for 2020 for Florida Retirement System Investment Plan members, so RMD payments will not be made automatically for 2020. If you were required to receive an RMD payment, and still want to receive it, you may request that by calling the Investment Plan Administrator at 1-866-446-9377, Option 4, or by logging into

IRS Stimulus Payments
You may qualify for a stimulus payment of up to $1,200 (or $2,400 for married couples) authorized by the CARES Act. Direct deposit payments started going out April 9th, and should start arriving in taxpayer accounts by April 14th. Paper checks will take a bit longer, maybe as late as September for some taxpayers. Lower income taxpayers will receive their checks first. Qualification for the stimulus payments are based upon your 2019 tax return, or if you haven’t filed it yet, your 2018 return. The method of payment is also based on the method you received your refund on that return. But what if were not required to file a return for 2018 or 2019? Non-filers who receive Social Security retirement, disability (SSDI), or survivor benefits, or receive Railroad Retirement and Survivor Benefits, don’t need to do anything– the IRS will send your stimulus check by the same method. However, non-filers who receive one of these benefits and have a qualifying child under age 17, can apply for an extra $500 per child. Those who are not required to file a tax return, and do not receive the above listed government benefits, to file for the stimulus payment.

Tax Filing Deadline
As part of the CARES Act, the IRS extended the deadline to file and pay your 2019 income tax until July 15th, 2020. The deadline to make 2019 IRA and HSA contributions is also extended until July 15th, 2020.

Waived Early Distribution Penalty
For those adversely affected by COVID-19, the 10% early distribution penalty is waived on distributions of up to $100,000 (total) from most workplace retirement plans and IRAs. Also, you can choose to pay the federal income tax on the distribution over a 3-year period. However, you should talk to your advisor prior to taking early distributions.

Rick Bernard | MBA
Financial Advisor

Right now, our world is consumed with the impacts that COVID-19 is having on our health and our economy. So many have lost their jobs and are struggling to make ends meet. You may have experienced a financial hit in recent weeks, and it could mean that you need to reevaluate your own budget. In this time of financial uncertainty, it can be empowering to take control over your finances. Taking action now will relieve stress levels and will set you up for success in the future.

  1. Building Your Emergency Savings Fund
    This season of uncertainty is why an emergency fund is critical. Having three to six months of living expenses is recommended, but if you aren’t there yet, now is the time to make a plan.
    You may need to scale back on the non-critical spending, especially if you are currently out of work. You may find that continuing to cut this type of spending out of your budget, even after you are back to work, will help you reach your emergency savings goals quickly and efficiently.
    Call your mortgage institution, student loan provider, credit card companies or even your utility services to ask if they can extend your payments. This can prove to be a powerful option. Pushing the pause button will allow you to build up your emergency savings.
  2. Consider Refinancing Your Loans.
    Now, more than ever, may be a good time to look at refinancing your loans. The Federal Reserve lowered interest rates to 0%. When this happens, you may be able to lock in lower payments over 10, 15, or even 30 years due to lower interest rates. If you can find a lender that has low closing costs, the option of refinancing may benefit you. If you need help finding a lender, contact your advisor.
    If you have credit card debt, now might be the time to look into consolidating them, if the interest rate is lower than what you are currently paying. Another option is to look for credit cards offering a 0% interest rate to roll over the balance and pay it down more aggressively. You would want to make sure that the rate is set for its entirety and not just a few months. After paying off the card, make it a point to avoid using it. The spending habits are what you want to get control over, so that you don’t find yourself in the same boat again.
  3. Look for Other Sources of Income
    While there are companies that cannot keep their doors open due to the virus, there are many well known organizations that are ramping up hiring. Here is a list of 30 major US Companies currently hiring. If you can pick up some extra work on the side, it can help boost your savings even faster.
  4. Stay Connected
    Actively connecting with people is a great way to collaborate and build relationships. It’s also good for your mental health to stay connected whether that be phone calls or virtual meetings. Look for groups on social media that share in the same interests as you. Follow and comment on posts and like photos that you find interesting. Call or video chat your friends or family. Share your own story and start conversations to get people to share their ideas. Create a space where you can share your skills, values or experiences.
  5. Do Not Touch Your Investment Balances
    It is always recommended to invest consistently, and many people are doing this by contributing to their retirement plans at work. Right now, checking your investment balances daily will send your emotions on a roller coaster ride. There is no successful science to “timing” the market. Instead think of “time in” the market as your strategy. With the markets fluctuating the way that they have the last few weeks, you’re taking advantage of the opportunities to buy more. Think of it this way, when are you more likely to spend money at a department store? When there is a sale or when everything you want is full price? Right now, you are getting the sale price!

The impact of this virus is different for all of us; it looks different and it feels different. Taking control of your finances can be an emotional lifesaver, and we hope that these tips can help to alleviate any stress you are feeling. Most importantly, here at CPS, we hope that you and your family are staying safe and healthy. We’re in this together.

Tamara L Fales
Retirement Plan Advisor

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