Dear On December 21, we will be able to witness something not seen in nearly 800 years. I know, since we are in the last days of 2020 our initial reaction is to head for our 1960’s bomb shelters. But this time, the news is more positive. On this day, the planets Jupiter and Saturn will line up to create what is known as the “Christmas Star” or the “Star of Bethlehem.” Even though these two planets align about every 20 years, when speaking of this particular event Patrick Hartigan, an astronomer at Rice University said, “You’d have to go all the way back to just before dawn on March 4, 1226, to see a closer alignment between these objects visible in the night sky.” If you miss this year’s astronomical event you will be able to see a similar occurrence in 2080. Gee, I wonder what’s going to be taking place in that year? PHOTO OF THE WEEK Even during a pandemic, families are preparing for Christmas. Here’s a photo of the Season. 
ECONOMY HEADLINES SHOTS SHOTS SHOTS SHOTS SHOTS For most of this past year, the economy has operated under the shadow of the COVID-19 pandemic. This week, Western nations are set to administer their first doses of the coronavirus vaccine, capping a remarkable achievement that will save untold number of lives and help the global economy recover from a historic recession. Not only will the arrival of vaccines mark the beginning of the end of this chapter, but also the beginning of the beginning of – we hope – a sustained recovery. In the U.S., priority will be given to healthcare workers and to the most vulnerable in our nation, beginning with residents of long-term care facilities. We extend to all front line workers, at-risk citizens, and those responsible for the vaccine’s development and distribution our prayers for a successful release. ECONOMY BY THE NUMBERS 245,000 Job growth in the U.S. slowed sharply in November, suggesting the labor-market recovery is losing steam amid a surge in coronavirus cases and new business restrictions. Employers added 245,000 jobs last month, down from 610,000 jobs in October. November marked the seventh consecutive month of job gains at a steadily diminished pace. The labor market has now regained 12 million of the 22 million jobs last at the onset of the pandemic. 145,000 In addition to impacting the economy, the pandemic is reshaping America’s labor market. While the nation added jobs in November, most came in the transportation and warehousing industries, the ones that package, ship, and deliver goods to consumers. Our collective shift toward online buying – from sneakers to groceries to cars – has created a hiring “binge” in logistics industries with warehousing and transportation accounting for 145,000 of the 245,000 jobs created in November. 
3.2% Last week the Federal Reserve reported the U.S. economy’s recovery picked up to a “modest or moderate” pace this fall, even as growth began to slow in parts of the Midwest and Northeast as coronavirus cases increased. With the prospect of winter and the increased number of cases, the Organization for Economic Cooperation and Development cut its forecast for U.S. economic growth in 2021 to 3.2% from its previous forecast of 4%. Which begs the question: How much attention should we be giving to these forecasts? With the unrolling of the coronavirus vaccine, many economists are predicting a stronger growth in 2021. Stay tuned! MARKET HEADLINES WAIT … WHA’? You would think that the tough reports on the U.S. economy would have a strong, negative impact on the markets last week, right? Well, if you thought that, then you would be wrong. Despite the down-beat news on the economy, investors were up-beat enough to move the markets – and your investment accounts and your retirement accounts, and your 401(k)s – into positive territory with the Dow recording just its second-ever close above the psychological milestone of 30,000. The S&P 500 and the NASDAQ also rose during the week. What’s going on? Investors chose to ignore the job reports and instead looked at a growing momentum in Washington towards delivering a new coronavirus aid package and the forthcoming vaccine rollout to conclude that the economy will be able to weather the continued spread of the pandemic. Are they right? Stay tuned! Here are the numbers from last week: MARKET BY THE NUMBERS 
PERSONAL FINANCE YEAR-END PLANNING ON RMDs AND 401(K) HARDSHIP WITHDRAWALS If you are concerned about the impact COVID-19 has had on your finances, you have until December 31, 2020 to take advantage of some tax-friendly provisions in the CARES ACT. However, you will need to plan to avoid a heavy tax bill in the future. Here’s what you need to know. Take a Withdrawal From Your Retirement Account … The CARES ACT allows people of any age impacted by the pandemic to withdraw as much as $100,000 from their individual retirement accounts (IRAs) and 401(k)s without the usual tax penalties. And, for those who make a withdrawal, you avoid taxes if you return the cash over the next couple of years. … OR Don’t Take Your RMD The passing of the CARES ACT gave retirement savers who were older than 70 ½ when the year began three options for their required minimum distributions:
- skip their RMD for this year;
- receive your distribution and pay the tax on that income;
- or take the distribution, pay taxes on the income, and convert the sum into a Roth IRA.
If you don’t need your RMD for this year and forgot to tell your bank or custodian to cancel distributions that were already scheduled to automatically take place near year-end, you could be facing an unwelcome tax burden. Fortunately, there is a solution: under tax rules, people have 60 days to return a distribution to their IRA and, in effect, undo it. Doing that will remove the income and, as a result, the need to pay the related taxes. If you haven’t received your distribution that is scheduled to come in late December, you should contact your bank or custodian and stop it to avoid paying the 2020 accompanying tax. AND FINALLY ... As we draw close to the end of the year, does anyone else feel like this? 
That's it for this week. Let me know if you'd like to virtually or actually get together. - Paul |
