Five Graduating High School Students Shadow SJS Investment Services

One of our favorite traditions is when students intern with us. It is an opportunity for us to teach the next generation of investors some of what we have learned, as well as learn from them.

From April 29th through May 3rd, five Seniors from St. John’s Jesuit High School - Andrew Balcerzak, Declan Loisel, Evan Skolmowski, Jude Dzierwa, and Travis Friddell - interned with the SJS Team in Sylvania, Ohio. Throughout their internship, they did activities including:

• Learn about a wide variety of topics on personal finance

• Study the importance of investing, as well as different ways of investing

• Introduction to retirement and other investment accounts (ex. IRA, 401(k), 529, HSA, etc.)

• Started reading The Investment Answer by Daniel C. Goldie and Gordon S. Murray as well as The Psychology of Money by Morgan Housel

• Meet with most members of the SJS Team

• Create LinkedIn profiles

• Present an investment-related idea for the SJS Team to consider

We asked each student to write a summary of what they learned during the week. We thank Andrew, Declan, Evan, Jude, and Travis for spending their senior project week with us, and we wish them well going forward!

Andrew Balcerzak

My week at SJS for my senior project was great. I came into this experience wanting to gain a better understanding of the basics of finance and what exactly goes on in a financial firm. I got a well-rounded view of the company and what everyone does in it. Whether it was making trades, analyzing certain stocks, learning what the advisors do, or even life advice, I felt that I gained knowledge from the time spent at SJS.

It was an eye-opening experience to see how much goes into the planning of people's futures. I found out the importance of reading and being a lifelong learner as everyone at SJS is reading some sort of financial book to evolve their ideas and approaches to finance. We had the opportunity to sit in an investment committee meeting - to see the amount of research that goes into picking certain investments was kind of surprising to me. I enjoy analyzing graphs and learning about compound interest, so when we sat down and got to look at some of the projections, I was fascinated by it. With that being said, the best piece of advice I learned is to invest early because it’s difficult to catch up with people who have been investing and spending wisely. The basics of investing don’t have to be hard - when you begin to dive in is when you find certain intricacies.

Another great part of my experience was learning about the social aspects of business. We sat down with multiple advisors, and learned that some of their social skills are natural and some have been learned over time. We sat down with Mr. Savage for lunch and he explained some of the aspects of advisor and client meetings. My takeaway from lunch is to be a genuine person and learn about people on a personal level - it makes conversations very easy and builds connections that aren’t fake.

Lastly, we dedicated a few hours to talking about taxes and certain types of accounts that people use. Taxes are very complicated once you get into the weeds, but on the surface, a chunk of taxes is you paying into things like Social Security that you’ll later benefit from. Certain accounts - such as a Roth IRA or a 401(k) - offer certain advantages that taxable accounts fail to offer, but come with some restrictions on when you can use the money. One of the things on my to-do list is to open a Roth IRA as soon as I get a job because it seems like a no-brainer to start my life of investing at a young age.

Declan Loisel

At SJS, what I learned goes beyond simple financial ideas - it was a comprehensive immersion into the dynamics of wealth creation and management. From understanding the fundamentals of stocks, bonds, and alternatives to diving into the depths of retirement accounts, we gained a holistic perspective on the power of investing. The firm's emphasis on building a diversified portfolio emphasizes the principle that strategic allocation across different asset classes is key to long-term growth and risk mitigation. With insights into the historical performance of the stock market, we were able to grasp the significance of compound interest, seeing the exponential potential of sound investment strategies.

Navigating through the maze of tax implications and regional disparities, we uncovered insights into optimizing financial decisions. Learning how varying tax brackets and state-specific regulations impact investment outcomes highlights the importance of holistic financial planning. By striving to maintain specific percentages of different investments, SJS balances returns and volatility. Beyond the numbers, the internship experience at SJS filled me with a sense of fulfillment and excitement as we discovered our passion for the field. Aspiring to embark on careers in finance, we gained some technical understanding as well as a deep appreciation for the multi-faceted nature of the industry.

Evan Skolmowski

Firstly, I want to express my gratitude to SJS for allowing me to come shadow. During this week, I have gotten to speak with and observe a dozen different people and learn unique pieces of information from each of them. Coming into the office on Monday, all I thought I knew about a bond was that it was some form of government currency. I now know investing in bonds is generally a form of fixed income, with a typically lower but more consistent rate of growth compared to domestic or international stocks. Some of the most useful pieces of information I’ll take away is the importance of diversification and staying true to the investment process over time, meaning I must discipline myself to always put away a fraction of a paycheck, and not pull it all out when there’s a dip in the market and things get scary.

I plan to begin investing as well as pour over books and articles deciding where I’ll begin my long-term investments, rather than have all of my money in faster individual stocks. At this point in time, I’ve thought about fifty different careers I could have in the future from astronaut to being the president, but I’ve always known I wanted to make enough money to live comfortably. My dad got me interested in the world of finance, but it’s always been slightly difficult to understand some of what he’s talking about on a larger scale. I’m extremely thankful that SJS has helped me to understand and get a better grasp on more of these ideas and terminologies.

Jude Dzierwa

During my one-week internship at SJS, I got to learn a ton about how finance works. Right from the start, I picked up basic stuff like what stocks, bonds, and derivatives are about. I saw how professionals manage portfolios and why it's so important to spread out risks by diversifying.

I also learned about taxes and how they affect the world. I saw how different states get taxed on different things. More populated states like California and New York have a higher income tax than states like Arkansas and Ohio. There are also taxes when you invest in the market such as capital gains taxes (particularly when an investment is sold within a year), unless the investment is in a retirement account like a Roth IRA.

As the week went on, I dug into financial analysis, trying to figure out how to judge how well companies are doing and how to read their financial reports. Doing mock trades helped me see how things play out in real time, and watching how the team deals with clients showed me the importance of personal connections in finance. Overall, it was a crash course in investments that gave me some solid skills to take forward.

Travis Friddell

This week shadowing SJS has been an amazing experience that I am extremely grateful for. I have witnessed day-to-day operations, meetings, and have observed what financial advisors and managers need to do to manage someone’s portfolio.

Learning how to manage someone’s portfolio was a very interesting experience. I have learned what it means to balance the risks of a portfolio. Many people depend on their financial advisor to help them make the right decisions with their money. There are many unfamiliar terms I have learned this week that I need to understand in the future, but that hasn’t stopped me from understanding what happens here at SJS.

Something I learned about as well this past week was types of jobs and positions in the financial world. One of the things I wanted to leave SJS with was a better idea of what type of career I truly want to pursue after college. I have learned about careers like a financial planner, portfolio manager, financial analyst. I am so grateful for this opportunity and everything I have learned. Thank you SJS for this experience that I will never forget!

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Important Disclosure Information:

There is no guarantee investment strategies will be successful. Past performance is no guarantee of future results. Diversification neither assures a profit nor guarantees against a loss in a declining market.

Advisory services are provided by SJS Investment Services, a registered investment advisor (RIA) with the SEC. Registration does not imply a certain level of skill or training. SJS Investment Services does not provide legal or tax advice. Please consult your legal or tax professionals for specific advice.

Statements contained in this article that are not statements of historical fact are intended to be and are forward looking statements. All forward looking statements are inherently uncertain as they are based on various expectations and assumptions concerning future events and they are subject to numerous known and unknown risks and uncertainties which could cause actual events or results to differ materially from those projected.

Hyperlinks to third-party information are provided as a convenience.

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SJS Outlook: Q4 2022

Please click on the image below.

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Four High School Seniors Intern With SJS Investment Services

One of our favorite traditions at SJS Investment Services is when students intern with us. It is an opportunity for us to teach the next generation of investors some of what we have learned, as well as learn from them.

From August to December 2022, four Seniors from St. John’s Jesuit High School - Kleiston Bonnell, CJ Hornbeak, Beckham Schmitz, and Zachary Zitkovic - interned with the SJS Team in Sylvania, Ohio. Throughout their internship, they did activities including:

• Learn about a wide variety of topics on personal finance, from taxes to insurance to the financial costs with having a family

• Study the importance of investing, as well as different ways of investing

• Introduction to retirement and other investment accounts (ex. IRA, 401(k), 529, HSA, etc.)

• Research different investors and specific investments

• Read The Investment Answer by Daniel C. Goldie and Gordon S. Murray as well as The Psychology of Money by Morgan Housel, which they get to keep

• Meet with most members of the SJS Team as well as some local business leaders

• Create a LinkedIn profile (Kleiston, CJ, Beckham, Zach) and resume

• Present an investment-related idea for the SJS Team to consider

We asked each student to write a summary of what they learned during the internship, which we share below. We thank Kleiston, CJ, Beckham, and Zach for spending their internship with us, and we wish them well going forward!

Kleiston Bonnell

I very much enjoyed my time at SJS. The staff was welcoming and very conversational. Bobby mentored us throughout the semester. We started with the basics such as what is a stock and a bond and how each works. We also learned early on some of the key characteristics of people who have become and stayed wealthy. We were provided with two books at the start, The Psychology of Money and The Investment Answer.

As our time continued, we met with many of the SJS team members to talk and sit in on calls with them. We would continue to sit with Bobby and learn about more of the jargon of the financial field such as REITS (real estate investment trusts) and ETFs (exchange traded funds). We learned about a way to get a head start on our future with a Roth IRA. We learned about different investment accounts such as 401(k)s, which are retirement plans offered by your job. We also learned about the 529 plan, which can be used to pay for education expenses. 

Halfway through the internship, we met with a SJJ alumnus named Paul Kwapich, who runs River Asset Management. We were able to talk with him about his experience getting started in the real estate field. Coming to the end of our internship, I am very thankful for Kevin and Scott for giving us the opportunity to join them at SJS. And I would also like to thank Bobby for taking the time to mentor us and give us a head start on investing and helping us set ourselves up for success.

CJ Hornbeak

During my internship at SJS Investment Services, I have learned many things about the stock market, as well as many ways to save and potentially gain money. Because investments can lose money over short or even long periods, I need some stable money to keep and not invest (emergency account). I learned the difference between a stock and bond. A stock is a piece of ownership in a company you can buy yourself, and a bond is like a loan to a company or government. Also, owning a share of a REIT is like owning part of real estate, and with that comes the importance of paying off the buildings, taxes, and bonds.

I learned about mutual funds and ETFs, which are types of pooled investment securities. I also learned about different types of investment accounts, such as taxable accounts. I learned about Roth IRAs, in which you must contribute after-tax money. If you follow the rules, your contributions and earnings can grow tax-free, and you can withdraw them tax-free and penalty-free starting at age 59.5.

We went to Paul Kwapich’s real estate company, which owns, operates, and finances income-generating real estate. Bobby also gave us a book called The Psychology of Money, which talks about how dealing with money can be hard for many people. Doing well with money isn’t guaranteed - it’s a lot about how you behave. We also learned how a lot of wealthier people end up losing their wealth by buying nicer things and spending too much money instead of saving money and spending less.

I learned about FICA taxes, which provide necessary funding for the government to pay Social Security and Medicare benefits. FICA taxes are payroll taxes that occur before retirement plan contributions. Medicare provides healthcare primarily for people age 65 and older. Social Security provides income for people as they get older. We also learned about other taxes, as well as about tax deductions. Lastly, I learned about venture capital investing, which provides capital to startup companies and small businesses that may have long-term growth potential.

Beckham Schmitz

During my time at SJS Investment Services, I have been able to broaden my knowledge of the business world. Interning with SJS has presented me with a lot of opportunities and experiences. I had no idea what I was getting myself into when I first joined the internship program at St. John’s. However, I am very fortunate that I decided to intern with SJS and am grateful for the knowledge it has left me.  

During my time at SJS, I have undergone many talks and activities with Bobby Adusumilli. He gave us a rundown of the ins and outs of business. He taught us about managing money and strategies to potentially help set ourselves up for our futures. Also, he taught us a lot of business vocabulary so that we can better comprehend investment markets. Additionally, I am thankful for the different SJS team members we had the opportunity to speak with. Being able to see the different jobs and ask specific questions regarding their positions was very informative. I think learning how to start and operate a business will prepare us for our futures.

I am very thankful to the SJS team for allowing me to intern with them. This internship has left me with a lot of new knowledge and skills. I think this time spent at SJS will better set me up for my future and leave me with connections. I appreciate everyone at SJS for giving us their time and broadening our knowledge in their fields.

Zachary Zitkovic

SJS has helped me learn some of the necessary knowledge needed in order to make smart financial decisions. I really enjoyed and valued our lessons in learning how to manage money. This is a crucial skill that can be vital at such a young age to accumulate wealth over time. You must learn what “enough” is for you. When you learn how to budget but enjoy your money in a humble fashion, it can lead to smarter financial decisions and greater profits in the long run. Whether it means living below your means, value of paying taxes and bills on time, or just learning the value of investing in a broad-market index mutual fund instead of trying to beat the market, I truly can say I’m much more knowledgeable now than I was before this internship. These skills learned will live with me for the rest of my life and I am blessed to have been given the opportunity to be introduced to them at such a young age.

I think it’s incredibly important for many people to know that past performance on the market can’t guarantee what the future may look like. I learned in the book The Psychology of Money (given to us by the Advisors) that almost nothing is ever as good or as bad as you think. It helps to be level-headed in the investment world and not rush decisions because of a high or a low. The best money lesson I've learned over the past few months is that your money mindset is more important than the number in your bank account. If you fear money or think you're terrible with money, that may become true. It was also great learning about the different retirement plans like the IRA and 401(k). You may have the option to do Roth plans where you tax the money you put in right away, or Traditional where it’s taxed when it comes out. Roth is popular among younger investors but both are good plans depending on the company you may work for.

These 75 hours spent at SJS have been some of the most important and crucial time in all my time at St. John’s. It was great seeing how there’s so many different ways to achieving financial success. I’ve realized this based on all the different SJS team members, CEOs, and popular figures we researched, and learned how there’s no one straight path to achieving wealth. It was amazing learning about all the different stories and paths to see how people got to where they are today. The ability to learn from the employees at SJS has been nothing short of a blessing. Bobby has done an incredible job giving us the basics of many financial topics. We were even given the opportunity to tour and learn at Paul Kwapich’s real estate business River Asset Management. There, we were able to learn about the basics of real estate, much like how Bobby taught us in finance. The connections I’ve made with all the team members at SJS and their connections will be relationships that I will cherish for the rest of my life.

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Important Disclosure Information:

There is no guarantee investment strategies will be successful. Past performance is no guarantee of future results. Diversification neither assures a profit nor guarantees against a loss in a declining market.

Advisory services are provided by SJS Investment Services, a registered investment advisor (RIA) with the SEC. Registration does not imply a certain level of skill or training. SJS Investment Services does not provide legal or tax advice. Please consult your legal or tax professionals for specific advice.

Statements contained in this article that are not statements of historical fact are intended to be and are forward looking statements. All forward looking statements are inherently uncertain as they are based on various expectations and assumptions concerning future events and they are subject to numerous known and unknown risks and uncertainties which could cause actual events or results to differ materially from those projected.

Hyperlinks to third-party information are provided as a convenience.

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SJS Outlook: Q3 2022

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SJS Outlook: Q2 2022

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Two Graduating High School Students Shadow SJS Investment Services

One of our favorite traditions at SJS Investment Services is when students shadow us for a week. Many current SJS Team members first learned about SJS through shadowing, so it brings back good memories for us. It is also an opportunity for us to teach the next generation of investors some of what we have learned, as well as learn from them.

From May 09-13, 2022, two graduating Seniors from St. John’s Jesuit High School - Jacob Kelly and Michael Leslie - shadowed the SJS Team in Sylvania, Ohio. Throughout the week, they did activities including:

• Learned about the importance of investing, as well as different ways of investing

• Introduced to retirement and other investment accounts (ex. IRA, 401(k), 529, HSA, etc.)

• Created a LinkedIn profile (Jacob and Michael) and resume

• Read The Investment Answer by Daniel C. Goldie and Gordon S. Murray

• Created sample financial simulations

• Presented an investment-related idea for the SJS Team to consider

We asked each student to write a 2-3 paragraph summary of what they learned during the week, which we share below. We thank Jacob and Michael for spending the week with us, and we wish them well as they embark on their college journeys!

Jacob Kelly

This senior project has allowed me to expand my knowledge of investing and different investment account types much farther than what I previously knew. Being fairly uninformed did help me to keep an open-minded approach, which paid off immensely when discussing the many accounts available to me now as well as later on in life. Learning more about SJS was something very eye-opening to me, as they try to understand the problems people face in today’s world. Their philosophy is very similar to what St. John’s has preached to me through the “The Grad at Grad”. Putting people first is what the “Grad at Grad” strives to achieve, and I have seen throughout my time here that everyone wants success for their clients. SJS has its own form of this, though more expanded, through its many values for all of the clients within their firm to make them feel more as a friend than a customer.

Understanding a company can take you far, but without discipline and patience to gain the full knowledge of what you are going into can cause confusion. This is where I felt the staff at SJS helped immensely to make a comfortable environment for those new to investing or trading. I had zero idea how to open any investment accounts before entering SJS, and now I feel more confident in my knowledge of investment accounts, Roth accounts, and even just IRAs. The biggest takeout for me: time is an asset that can depreciate as fast as it gives value.

Michael Leslie

After spending a week at SJS, I’ve expanded my knowledge and understanding of the stock market. They took our project as an opportunity to really mentor us in their philosophy. Not only did they teach about stocks, but they gave me a lot of advice about life in general. Going into this week I had little to no information about where to even start to invest. With the help of Bobby, I am now confident that by staying disciplined and taking smart risks, I can gain a head up on other young people my age. 

The mentorship will definitely go a long way for me, but how this company functions will certainly stick with me. Having a couple of high school kids hanging around the office for an entire week is something I would imagine to maybe create stress and could feel like a burden. I did not get this feeling from anyone here throughout the week. Everyone that I talked to seemed so nice and truly made me feel like they wanted us there. The Advisors clearly collaborate well, which really makes this office feel like a true team. Several members of the team took us out to lunch, which is something that they did not need to do but went a long way. Going into my career, I will not be able to help but compare other companies to SJS.

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Important Disclosure Information:

There is no guarantee investment strategies will be successful. Past performance is no guarantee of future results. Diversification neither assures a profit nor guarantees against a loss in a declining market.

Advisory services are provided by SJS Investment Services, a registered investment advisor (RIA) with the SEC. Registration does not imply a certain level of skill or training. SJS Investment Services does not provide legal or tax advice. Please consult your legal or tax professionals for specific advice.

Hyperlinks to third-party information are provided as a convenience and we disclaim any responsibility for information, services or products found on websites or other information linked hereto.

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SJS Outlook: Q1 2022

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SJS Outlook: Q4 2021

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SJS Outlook: Q3 2021

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SJS Outlook: Q2 2021

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Three Graduating High School Students Shadow SJS Investment Services

One of our favorite traditions at SJS Investment Services is when students shadow us for a week. Many current SJS Team members first learned about SJS through shadowing, so it brings back good memories for us. Additionally, it is an opportunity for us to teach the next generation of investors some of what we have learned, as well as learn from them.

From May 10-14, 2021, three graduating Seniors from St. John’s Jesuit High School - Max Bruss, Theodore Gothier, Nicolas Conway (in order, pictured above) - shadowed the SJS Team in Sylvania, Ohio. Throughout the week, they did activities including:

• Learned about the importance of investing, as well as different ways of investing

• Learned about retirement and other investment accounts (ex. IRA, 401(k), 529, HSA, etc.)

• Created a LinkedIn profile (Max, Theodore, Nicolas) and resume

• Read The Investment Answer by Daniel C. Goldie and Gordon S. Murray

• Helped create financial presentations and simulations

• Pitched an investment idea for the SJS Team to consider

We asked each student to write a 2-3 paragraph summary of what they learned during the week, which we share below. We thank Max, Theodore, and Nicolas for spending the week with us, and we wish them well as they embark on their college journeys!

Max Bruss

My experience at SJS Investment Services has been very beneficial for me in learning about many aspects of working in the real world. The sense of community as well as team efforts stand out tremendously here. Everyone combines their intelligence and diligence to keep the ship sailing. This allows for agreement on good ideas one may have that others aren’t thinking of, among other things. All colleagues here have something different to offer in a different aspect of the business. I would say the group of people working here is quite optimal for the business and they all fit into their positions quite well. 

One reason I say they fit well here is because they all were able to educate us on everything that goes on here and who has which responsibilities. Mr. Schaetzke taught us about the connections with clientele and how new clients come to the firm for their services. Mr. Adusumilli taught us about how to decide which investments may be right for us. He also showed us how you can approach different situations including getting employed, treating people right, doing research on your investments, making pinpoint decisions based on your research, and starting early on your investments.  

We spoke to Mr. Ludwig and he gave his expertise on bonds and how mass adoption changes the world constantly. An important lesson Mr. Savage gave us was his experience with running a business and making mistakes to get to where he is today. Another thing he presented to us was how important it is to have mentors to guide you in the right direction in becoming extremely successful. After all, if something has worked for someone in the past, it may work for someone else in the future. That, of course, applies to having success in running a business. I would love to include my experiences with all of the extraordinary people I have talked to over the past week but this was just meant to be a brief overview of my experience here. There was a lot of knowledge handed to us; it was quite an interesting experience to have shadowed here. I will be taking the things I have learned during this experience for the rest of my life and into the financial world. 

Theodore Gothier

The opportunity to shadow at SJS has provided me with much more than I expected. Not only did I gain real world insight into the professional world but I was able to learn from everyone at the firm about what they do and how they tie in the needs of their clients to their constantly developing philosophy, MarketPlus Investing. Each individual of the team provided me with knowledge about investing and financial planning that I believe will be very beneficial for my future in finance. They even taught me things to potentially help me better handle my money for the long term prosperity of it, whether that be planning what to invest in retirement accounts or learning to choose a diversified portfolio in a market that is hard to predict.

Spending time with everyone exposed me to different sides of finance, like client facing as well as analytical, which really opened my eyes to the opportunities that exist and how each person plays a different part in the investment world but often work together to benefit the same client. A lot of the time spent was with Bobby Adusumilli, the main point of contact for this experience, who prepared me well to fully immerse myself with this time through planned presentations and a schedule that allowed him to educate us in the multiple facets of equities such as through mutual funds or ETFs, retirement accounts like a Roth IRA, or even bonds of which I was unfamiliar with until I came here. After this, I got to sit down with different SJS employees who each specialize in a different part of the business to learn more about what they do. I was often given resources to do more research and to help guide me. With each person at SJS, employees and in management, I felt like wisdom was passed down that will stick with me. I feel like this was not just a professional experience, but an educational one that will make me better prepared for my future endeavors.

Nicolas Conway

My time here at SJS has been something I will come to remember. Having the opportunity to shadow here has helped create the first step into a field I believe I will enjoy. I have gained a lot of knowledge on lots of aspects related to investing, as well as other things that have stood out about working in the real world. Learning from and listening to many different people throughout SJS has provided wisdom and can serve somewhat as a guide for the future. Through meeting everyone and seeing the different roles they play, I see the knowledge that comes along their strong interests in investing.

With Bobby as the main person talking with us and scheduling our days, he provided a lot of helpful knowledge that can greatly support my money managing when I get older. Through a lot of our talks and discussions, I learned about different types of investment accounts which can potentially help maximize returns over time. Starting to invest early is one of the biggest things for someone like me in order to help me potentially maximize my returns and be financially stable for the future. We also learned about different ways that someone can invest money through the different types of investments like stocks, bonds, real estate, etc., depending on the volatility that someone is willing to accept. All things together, I enjoyed shadowing here, as they showed me a lot of different aspects of the workplace environment and gave me an overview of the finance field.

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Important Disclosure Information:

There is no guarantee investment strategies will be successful. Past performance is no guarantee of future results. Diversification neither assures a profit nor guarantees against a loss in a declining market.

Hyperlinks to third-party information are provided as a convenience and we disclaim any responsibility for information, services or products found on websites or other information linked hereto.

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SJS Outlook: Q1 2021

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SJS Outlook: Q4 2020

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CARES ACT: Key Changes in Tax/Benefits Provisions for Families and Businesses

By SJS President Kevin Kelly, CFA.

In these times of change, when news seems to hold more emotion and impact, it can be difficult to keep track of relevant news and sift through the noise. To that end, we wanted to share a summary of recent legislation that may affect you as you are navigating through the next couple of months of decision-making for your families and your businesses.

Tax Filing Dates and Estimated Tax Payments

As you may be aware, the IRS delayed the date for filing and making federal tax payments from April 15 to July 15, 2020.¹ This change applies to individual returns, payment due from trusts and estate, and C corporations. Businesses or other entities that have filing due dates other than April 15 have not been granted a tax extension.

While some states have adjusted their tax return filing and payment deadlines to match the new federal dates, each state is making their own decision. To see if your state has delayed its filing deadline, you may check this website.

For those who pay estimated taxes, the first payment will be due June 15, with the second payment following on July 15.² As always, please be sure to check in with your tax professional for guidance.

IRA Contribution Deadline Extension

The IRS has extended the deadline to make IRA contributions for tax year 2019 to July 15, 2020.

Relief for Small to Midsized Businesses and Their Employees

On March 18, Congress passed the Families First Coronavirus Response Act. Taking effect on April 2, this law provides benefits to businesses with up to 500 employees, with possible waivers for businesses under 50 employees. While some of the details are being determined by the Department of Labor, the Act assists both employees and employers. Workers may be eligible for up to 80 hours of paid sick leave and expanded paid childcare leave. Employers are eligible to receive 100% reimbursement for paid leave pursuant to the Act, including coverage for health insurance costs and payroll tax liability. Self-employed taxpayers are eligible to receive a similar credit.³

CARES Act Stimulus

On March 27, 2020, Congress passed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), a $2 trillion stimulus package. This is the third piece of legislation since March 6 aimed at combating the economic disruptions caused by the coronavirus epidemic. Some notable provisions of the CARES Act include the following⁴:

• Cash Payment Payout: Individuals will receive $1,200 as a one-time cash payment from the federal government, while married couples will receive $2,400. Note that cash payments are available to individuals who had less than $75,000 of Adjusted Gross Income (AGI) in 2019, and to married couples with less than $150,000 AGI. Taxpayers will receive an additional $500 per qualified child. Payments are anticipated to be made in April.

• Small Business Help: Certain businesses with fewer than 500 employees impacted by coronavirus will be able to take out loans of up to $10 million. These loans may be eligible for forgiveness if used to cover payroll, rent and utilities. Employers will also be able to delay paying Social Security payroll tax normally paid in 2020; payments will be due at the end of 2021 and 2022.

• Unemployment Benefits Expansion: There will be an increase of $600 per week for up to four months for unemployment benefits. Benefits will also be extended to self-employed individuals and independent contractors.

• Student Loan Payment Deferral: Federal student loan payments are deferred through September 30, 2020.

• IRA Withdrawal Changes: Required minimum distributions from IRAs are waived for tax year 2020. The ten percent early withdrawal penalty that may apply to distributions made from retirement accounts for “Coronavirus-Related Distributions” is eliminated.

Additional IRA Distribution Information

As part of the CARES Act, Required Minimum Distributions (RMDs) are now suspended for 2020. RMDs do not have to be taken from Traditional IRAs, SEP IRAs, SIMPLE IRAs, 401(k), 403(b), and governmental 457(b) plans. Individuals who turned 70 ½ in 2019, do not have to take their 2019 RMD (normally due by April 1, 2020) or their 2020 RMD.

Distribution rules vary for beneficiaries of inherited IRAs. Beneficiaries taking “stretch IRA” distributions over their lifetimes do not have to take these distributions for calendar year 2020. However, beneficiaries of IRAs who must distribute the entire inherited IRA in a five-year period are given an additional year to distribute the full inherited IRA balance. Those beneficiaries subject to a ten-year distribution schedule for inherited IRAs will not receive an extension, as the first IRA distribution would be required in 2021.

So, should you still take an IRA distribution if there is no requirement? The answer is, it depends. If you need to take IRA distributions to support your lifestyle expenses, then you may still need to make distributions. You might consider making a partial or full IRA distribution if you can do so at a relatively low tax rate. Also keep in mind that if you are at least 70 ½, you can continue to use IRA distributions to make charitable gifts, which may reduce taxable income distributed to you, if you cannot itemize deductions on your tax return.

What should you do if you have already taken a distribution? In some circumstances, it may be possible to reverse unnecessary RMDs.

1. RMD has taken place within the last 60 days:
An individual may be able to write a check or transfer an amount equal to the distribution back into a retirement account before the end of the 60-day rollover window. Care must be taken to comply with the once-per-year rollover rule (the funds cannot have been rolled from a plan in the last 365 days, go to a plan in the next 365 days, and/or no other IRA-to-IRA rollover can have been made within the past 365 days).

2. RMD took place more than 60 days ago:
If the individual meets one of the qualifications for taking a Coronavirus-Related Distribution (CRD) in 2020, then the IRA funds can be repaid within three years from the date of distribution. Alternatively, the distribution can be taxed over three years. Distributions of up to $100,000 from an IRA or retirement plan may be eligible for CRD treatment if the taxpayer, spouse or a dependent is diagnosed with COVID-19, or any of the following circumstances apply:

• Experience adverse financial consequences as a result of being quarantined, furloughed, being laid off, or having work hours reduced because of the disease;
  Become unable to work due to lack of childcare as a result of the disease;

• Own a business that has closed/operate under reduced hours because of the disease; or

• Meet some other reason approved by the IRS.

What about for beneficiaries of inherited IRAs who made distributions already? These individuals are not able to make a rollover or return the funds to an inherited IRA. The only exception is for surviving spouses who took distributions from an inherited spousal IRA – the surviving spouse may be able to deposit the RMD back into their own retirement account as a spousal rollover.

Please know that your SJS team is here to help guide you and your organization through these difficult times.

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Important Disclosure Information and Sources:

[1] Erb, Kelly Phillips. “All You Wanted To Know About The IRS Tax Filing & Payment Extensions & Relief But Were Afraid To Ask.” Forbes.com. March 19, 2020. www.forbes.com/sites/kellyphillipserb/2020/03/19/all-you-wanted-to-know-about-the-recent-irs-tax-payment-relief-but-were-afraid-to-ask/#73b88b8845d5

[2] “Filing and Payment Deadlines Questions and Answers.” IRS.gov. March 24, 2020. www.irs.gov/newsroom/filing-and-payment-deadlines-questions-and-answers

[3] “Treasury, IRS and Labor announce plan to implement Coronavirus-related paid leave for workers and tax credits for small and midsize businesses to swiftly recover the cost of providing Coronavirus-related leave.” IRS.gov. March 20, 2020. www.irs.gov/newsroom/treasury-irs-and-labor-announce-plan-to-implement-coronavirus-related-paid-leave-for-workers-and-tax-credits-for-small-and-midsize-businesses-to-swiftly-recover-the-cost-of-providing-coronavirus

[4] “Analyzing The CARES Act: From Rebate Checks To Small Business Relief For The Coronavirus Pandemic.” Kitces.com. March 27, 2020. www.kitces.com/blog/analyzing-the-cares-act-from-rebate-checks-to-small-business-relief-for-the-coronavirus-pandemic/.

SJS Investment Services does not provide legal or tax advice. Please consult your legal or tax professional for specific advice. This material has been prepared for informational purposes only.

Hyperlinks to third-party information are provided as a convenience and we disclaim any responsibility for information, services or products found on websites or other information linked hereto.

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5 Financial Tips For Your College Grad

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By SJS Managing Director Jennifer Smiljanich

It’s that most wonderful time of year!  School buses are back on the roads, those long, hot summer days are getting cooler and shorter, and autumn is right around the corner. Some of you are experiencing the happy, and maybe bittersweet, occasion of a son or daughter (or grandson or granddaughter) who has recently graduated from college and is now leaving the nest.

Maybe your new college grad is moving across the country, and you’re worried about him supporting himself while paying big-city rent. Or maybe your child is worried about what it means to really be “on her own,” and what to do if she runs short on cash.

We know you’ve worked to provide a good foundation to help your son or daughter get started on the right foot. Building good financial habits takes both time and discipline. But sometimes it takes a mistake – or two – along the way to learn the lesson. To avoid some of the most painful lessons, here are five tips for helping your 20-somethings get on solid ground:

Set a budget, and stay within it.

One of the most important life lessons is living within your means. For someone living on their own for the first time, handling all of the bills may be new. Budgeting tools can help your graduate plan on how they can cover the rent on the “have to have” apartment, while paying the loan on their car, utilities, groceries, and other basic needs.[1]

Count on there being an emergency! Be prepared.

An emergency fund goes a long way to easing the stress of the unexpected. Keeping extra funds set aside in a checking or savings account, up to three to six months of living expenses, is a good plan.[2]

Keep score, and be diligent about debt.

Building good credit at a young age is important, especially as entry-level incomes may be low.[3] Be sure to pay off credit card balances each month, pay rent on time, and keep up on any student loan debt payments. Then, when they are ready to buy a house in the future, they won’t need you as a co-signer!

The future is now – start saving.

After setting aside emergency funds and covering ongoing debt and expenses, encourage your adult children to save as much as they can. Even just saving enough to maximize their employer retirement plan match is a good start. As their salaries grow, or if they earn a bonus, they can think about increasing contributions. If your grad doesn’t have access to a retirement plan, he or she can contribute to an IRA.[4] And if you would like to help with their savings, you might consider gifting them funds they could use for IRA contributions – as long as they have adequate earned income.

Don’t forget the insurance.

Health insurance. Renter’s insurance. Disability insurance. These important coverages can help protect your children and their livelihood, as well as their personal belongings.[5]

And of course, the team at SJS is here to help. We know that money doesn’t come with an instruction manual, and financial decisions can sometimes be complicated. We are happy to offer our suggestions, or just lend an ear to listen.

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Sources:

[1] “7 Simple and Free Budgeting Tools,” money.usnews.com. January 14, 2015.

[2] “Emergency Fund: Why It Matters,” nerdwallet.com. August 8, 2018.

[3] “How to Build Credit,” www.experian.com. 2018.

[4] “2018 IRA Limits on Contributions and Income,” thebalance.com. July 13, 2018.

[5] “A New Grad’s Guide to Insurance,” bankrate.com. July 7, 2018.

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Let’s Talk Finances … With Your Kids!

By SJS Advisor Andrew Schaetzke CFP®

Maybe you’ve tried to talk with your kids or grandkids many times about financial responsibility. Or maybe you haven’t wanted to bring up the “taboo” subject of money. That’s okay. We can. And we can have the conversation on your behalf. Just call us to set up an appointment to talk finances and how money works.

Every young person needs to know that money can be his or her friend… or enemy. We can help make it the first one, by covering a few basics with them over the course of about an hour. We can touch on everything from living within your means, to paying yourself first. We’ll even share how saving money works, and how to make it work for you. We’ll talk about the difference between good debt and bad debt and what happens if you have any of the latter.

You say your son or daughter isn’t a math fan? He or she will like hearing about and seeing this math. We’ll discuss what money invested today has the possibility to become in 30 years. And, what opportunities may be missed if those same dollars are spent impulsively on a purchase with little or no lasting value.

It’s an eye-opening education that may be difficult for parents to deliver, but something we do all day. Take us up on the offer. It costs nothing but could be worth so much. And, at the very least, can begin to plant the seed of financial awareness and responsibility. You’ve worked to provide for those you love in every other way. Here’s one more very important way to show you care.

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