Throughout the past few weeks of social distancing and quarantine, the chorus of the Tom Petty song keeps popping into my head:
You take it on faith, You take it to the heart, The waiting is the hardest part.
These times have tested our faith, our fears, and our patience as we’ve dealt with all the aspects of this pandemic. The financial markets have been more volatile than anything we’ve seen in two generations. We worry about those that have lost jobs, hurt for our small business neighbors that are facing economic difficulties, and pray for our friends in the medical profession that are doing all they can to care for the sick.
We’ve learned more than we ever wanted to about the Tiger King, how hard our kids’ Common Core math homework can be, and that we have more food than we realize in our pantry and freezer to sustain us.
We are troubled by the varying reports we see on TV or read on social media. We are worried about the non-profits and churches that provide so much help to those in need. But we are comforted to see companies, individuals, and children working together to provide supplies, and more importantly hope to many around our nation and world.
With financial markets in flux, how have you reacted? Fear and panic were behaviors that were in favor during many trading days last month. What feelings did you have when you opened your March investment statement?
What happened on Easter Sunday was a disruption that changed the world forever. Perhaps, what we are experiencing now can have the same effect on our financial and family lives as well.
When your $50,000 tax-free Coronavirus check hits your hands, what are you going to do with it?
Wait, you thought it was only $2,400? Think again.
If you’re 25 years old and married (without kids), you and your spouse are about to receive one of the biggest checks in your life - $50,000. You ask, what do you mean?
When the Coronavirus bill is passed and signed by President Trump, you and your spouse will be receiving a tax-free check of $2,400. Most will view it for what it is. Found money that you can take a vacation with after the virus calms, a new game system or two while you’re quarantined, or a new set of wheels for your ride. Though, what if you did the contrary? What if you viewed it from the standpoint of your future self?
>You and your spouse receive the $2,400 tax-free check.
>You open a Roth IRA (call us if you need help).
>Use your government check to make a Roth IRA contribution.
You have until July 15th, 2020 to classify the deposit as a 2019 contribution. If contributed after that date, it will be a 2020 contribution.
If this one-time investment grows at 8% for 40 years (an assumption, but not an unrealistic one).
It grows to more than $50,000.
I’m challenging you to think about this unexpected windfall with a fresh behavioral mindset. Instead of consuming it, will you make it the turning point for your financial future?
One more WOW number - $670,000!
If you add $2,400 to this new account each year for the next 39 years until you’re 65, you could accumulate more than $670,000 tax-free. “We’re from the government and we’re here to help you” could go from a bad joke to your reality!