COVID UPDATE

As we all find ourselves taking incremental steps back toward re-opening and recovering, the team at GuideStream wanted to give you an update. As most of you know, during the recent pandemic, the GuideStream Team stayed on the job, albeit a bit more creatively! We are so thankful that, with the help of technology, we had the opportunity to stay engaged with you via email, text, fax, phone and Zoom.  

So, where do we go from here? Our management team is still continually evaluating and assessing the safest way to return to “business as usual”.  So, what does that mean for you? Due to ongoing safety concerns, we will still be limiting the amount of traffic into our main office for the near future. We will still be available to you via all methods listed above and, if you would like to drop something off at our office, please just call from the parking lot and we will come to you. 

The difficult decision, in the interest of safety, was made to cancel the GuideStream Client Picnic in July. We’re planning to be back bigger and even better on July 31st, 2021. Our staff is fully functioning here to serve you daily. 

Thank you for allowing us to continue helping you Navigate Life’s Currents! 

Our Response to COVID-19

Helping You Navigate Life’s Currents Over the past seven years, we have methodically attempted to prepare you for what we are all currently experiencing and hearing in the financial news. While the exact events can never be predicted, history has shown that times such as these occur in a fairly regular cycle. The following paragraph was included in the quarterly letter we sent April 18, 2017:

We feel that this is an ideal time to remember that bear markets are temporary declines greater than 20%. They occur an average of once every 4 years and last approximately 17 months. We are highlighting those realities this quarter so that when a temporary decline of more than 20% occurs in the future, you will understand that this is normal and temporary and therefore not succumb to financial journalism’s phenomenon we refer to as the “apocalypse du jour”.

After 11 years (7 years longer than normal), we officially entered bear market territory on March 11, 2020. The coronavirus (COVID-19) and a price war on oil were the catalysts. While not minimizing the seriousness of the current challenges, we hope the following thoughts help put the present realities into perspective.
WHAT WE KNOW

• Real-life investment success can simply be defined as avoiding “The Big Mistake”, i.e. selling holdings during a significant temporary downturn. Remember, this too shall pass.
• Markets respond most negatively to fear and uncertainty. Both of these factors are running at extremely high levels which correlate to the magnitude and pace of the current temporary declines. We have no control over uncertainty; however, we can (and should!) have perfect control over how we respond to it.
• The disciplined practices of asset allocation, diversification and rebalancing are built into your portfolios. Together, these comprise the wisest way to achieve your long-term investment objectives across all market cycles. This is where our disciplined investment principles and practices are focused.

OUR RECOMMENDATIONS
• Avoid “The Big Mistake” by being patient and maintaining the long-term investment plan and strategy we have helped you develop.
• Don’t hesitate to call our team for any reason. Part of our primary responsibility is to assist you through times like this. We are here for you and welcome any questions and conversations you would like to have.

It is a humbling honor for our team to advocate on your behalf by being objectives guides, wise investment counsellors
and “steady hands on the tiller”. We count it a sacred privilege to be entrusted with such important matters at all times,
but especially in these days.

With Appreciation,
Mark Olson, CIMA®
President/ Chief Investment Officer

Please remember that past performance may not be Indicative of future results. Different types of investments involve varying degrees of risk, and there c.in be no assurance that the future performance of any specific investment, Investment strategy, or product
(in duding the investments and/or investment strategies recommended or undertaken by GuldeStream Financial, Inc. (“GuldeStream Financiar), or any non-fnvestment related content, made reference to directly or indirectly fn this newsletter will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or appl!cabte laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or Information contained in this newsletter serves as the receipt of, or as a substitute for, personalized investment advice from GuideStream Financial. Please remember to contact GuideStream Financial, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. GuldeStream Financial is neither a law firm nor a certified publ!c accounting firm and no portion of the newsletter content should be construed as legal or accounting advice. A copy of the GuideStream Financial’s current written disclosure Brnchure discussing our advisory services and fees continues to remain available upon request.

CARES ACT & RMDS for 2020

THE CARES ACT & REQUIRED MINIMUM DISTRIBUTIONS FOR 2020. . . 

On March 27, 2020, The Coronavirus Aid, Relief and Economic Security Act (CARES Act) was enacted. What does this mean for Required Minimum Distributions (RMD)? Under normal circumstances, federal laws typically require individuals of a certain age (historically age 70½ but recently changed to age 72) to take mandatory distributions from their retirement savings. Under the CARES Act, these mandatory distribution requirements are waived for 2020.

Individuals Already in Distribution Status
For individuals who were already in required distribution status (generally, those who turned 70½ prior to 2019), the law waives the mandatory distribution requirement for 2020.

Individuals Just Beginning RMDs
For individuals who reached age 70½ during 2019 and were required to take their first RMDs by no later than April 1, 2020, the law waives the mandatory distribution requirement for 2020 and, in some cases, the 2019 mandatory distribution as well. Only individuals who did not take their 2019 RMDs during 2019, however, are eligible for a waiver of the 2019 RMD.

RMD Relief Also Available for Beneficiaries
In addition to providing RMD relief for plan participants and IRA owners, the law provides temporary relief from the required distribution rules that apply to beneficiaries of deceased plan participants and IRA owners.

For beneficiaries, the form of relief varies depending on (1) when the plan participant or IRA owner passed away and (2) the beneficiary distribution option to which the beneficiary is subject. The 2020 RMD is waived for beneficiaries taking some form of life expectancy distributions. For beneficiaries subject to the 5-Year Rule, the 2020 calendar year is to be excluded when determining the applicable 5-year distribution timeframe.

Although the mandatory distribution requirements have been waived for 2020, individuals still have the option of taking distributions at their discretion. The law change merely provides IRA owners, plan participants and certain beneficiaries with the option of foregoing all or part of the required distribution amount if they wish to do so. Individuals who have already taken mandatory distributions during 2020 but would have preferred to leave the amounts in their IRAs or workplace retirement plans may wish to consult with a tax advisor to determine if some or all of their distributions may qualify either for conventional rollover treatment or for repayment treatment as a Coronavirus-Related Distribution.

If you would like to defer your 2020 RMD, please contact either Debb or Lori at (800) 325-8975.

Secure Act & Your IRA

HOW MIGHT THE RECENTLY PASSED SECURE ACT AFFECT YOUR IRA?

A piece of legislation passed into law in December 2019 has changed the landscape for IRA accounts. The “Setting Every Community Up For Retirement Enhancement” (SECURE) Act is complex web of new rules and updates to old rules pertaining to retirement accounts. If you own an IRA, we wanted to make you aware of some of the recent changes:

  • Required Minimum Distribution (RMD) age now pushed out to age 72
    • If you have already started RMDs under the previous 70 ½ rule, then you must continue.
    • If you turn 70 ½ in 2020, you can defer your RMD start until you’re 72
    • PLEASE NOTE: Congress recently passed the CARES Act (Coronavirus Aid Relief and Economic Security Act), which permits individuals to forgo taking their 2020 RMD if they have been impacted by COVID-19. This option is open to individuals who have already begun taking RMDs, those who would have begun in 2020, and those who have extended their first RMD from 2019 into the first quarter of 2020. Please contact us if you have questions, or if you would like to postpone your RMD until 2021. 
  • IRA contributions: previously, IRA contributions were not allowed after an individual reached age 70 ½ . Under the SECURE Act, an IRA owner can contribute at any age, if he or she has earned income.
    • Please note that you cannot contribute for 2019 if you were age 70 ½ or older as of Dec. 31, 2019.
  • Qualified Charitable Distributions (QCD) amounts:
    • After reaching age 70 1/2, you can make qualified charitable contributions of up to $100,000 per year directly from your IRA.
    • Deductible IRA contributions made for the year you reach age 70 1/2 and later years can reduce your annual QCD allowance.
  • We would encourage you to review the beneficiary arrangements on your IRAs:
    • If someone other than your spouse is your beneficiary, he/she will have to fully distribute the IRA money within 10 years. Unless your beneficiary is:
      • your minor child
      • a disabled individual
      • a chronically ill individual
      • an individual who is not more than 10 years younger than you
    • Thankfully, the new 10-Year Rule offers some flexibility around the timing of distributions. Funds can be withdrawn in any amount, at any time over the course of the 10-year term – as long as the entire amount is withdrawn by the end of the 10th year.
    • All the funds withdrawn are taxable to the beneficiary as income.
  • If you are currently taking required distributions from inherited money, according to your life expectancy, you may continue to do so. This change is only effective for beneficiaries of IRA owners who pass away in 2020 and beyond.

Please note that additional clarity on some of the details of the SECURE Act is forthcoming from the Federal government.

Your GuideStream Financial advisor would be glad to review your unique situation with you and answer any additional questions you may have. GuideStream Financial does not offer tax and/or legal advice, so it may be advisable to contact your CPA and your estate-planning attorney if you have one.

As always, please contact us with additional questions, concerns, of if you need to make changes to your account.

Please remember to contact GuideStream Financial, Inc. (“GuideStream Financial”), in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you want to impose, add, to modify any reasonable restrictions to our investment advisory services, or if you wish to direct that GuideStream Financial  effect any specific transactions for your account.  A copy of our current written disclosure Brochure discussing our advisory services and fees continues to remain available upon request.

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