It was another historic week for the S&P 500. As of Monday, it had only taken 22 trading days to drop 30 percent which is the fastest market decline ever. The next three fastest drops occurred during the Great Depression of 1929. On top of that historic decline, we have historic volatility with the S&P 500 continuing with two percent or more daily swings becoming the new norm. This week the markets reacted positively as passage of the $2 trillion relief bill drew closer. However, that euphoria melted away in the last 30 minutes of trading Friday which saw the Dow down over 900 points and the S&P 500 closing at 2541. That sell off at the close could set the stage for additional losses next week. For TSP TIPs, we’ve already utilized our "two" transactions per month and remain 100 percent in cash, so no reallocation could be done, nor would we want to based on the current “uncertain” situation. Changing it up a little bit, the relief package mentioned above does have several relief provisions for retirement accounts. Although most TSP TIPS subscribers are younger than 70½, you may want to pass this on to your parents or anyone else you know that is 70½ or older, since they are subject to Required Minimum Distributions (RMD) from their retirement accounts. For 2020, RMD’s are waived and the RMD waiver also applies to 2019 RMDs that are normally due by April 1, 2020. In another bit of positive news, the waiver applies to IRA owners who turned 70½ in 2019. This could be a surprise to some because the Secure Act had increased the RMD age to 72 for those who turn 70½ in 2020 or later. However, those who turned age 70½ in 2019 were still required to take their first RMD by April 1, 2020 and now, that RMD is waived. Again, please pass this on to anyone that may fall into that category since 1 April is right around the corner. Lastly, we wish all our TSP TIPS subscribers the best during these unusual and trying times.
It was another historic week for the S&P 500. As of Monday, it had only taken 22 trading days to drop 30 percent which is the fastest market decline ever. The next three fastest drops occurred during the Great Depression of 1929. On top of that historic decline, we have historic volatility with the S&P 500 continuing with two percent or more daily swings becoming the new norm. This week the markets reacted positively as passage of the $2 trillion relief bill drew closer. However, that euphoria melted away in the last 30 minutes of trading Friday which saw the Dow down over 900 points and the S&P 500 closing at 2541. That sell off at the close could set the stage for additional losses next week. For TSP TIPs, we’ve already utilized our "two" transactions per month and remain 100 percent in cash, so no reallocation could be done, nor would we want to based on the current “uncertain” situation. Changing it up a little bit, the relief package mentioned above does have several relief provisions for retirement accounts. Although most TSP TIPS subscribers are younger than 70½, you may want to pass this on to your parents or anyone else you know that is 70½ or older, since they are subject to Required Minimum Distributions (RMD) from their retirement accounts. For 2020, RMD’s are waived and the RMD waiver also applies to 2019 RMDs that are normally due by April 1, 2020. In another bit of positive news, the waiver applies to IRA owners who turned 70½ in 2019. This could be a surprise to some because the Secure Act had increased the RMD age to 72 for those who turn 70½ in 2020 or later. However, those who turned age 70½ in 2019 were still required to take their first RMD by April 1, 2020 and now, that RMD is waived. Again, please pass this on to anyone that may fall into that category since 1 April is right around the corner. Lastly, we wish all our TSP TIPS subscribers the best during these unusual and trying times.