Francetic Tax Resolution LLC - June 2020


FIXED INDEXED ANNUITIES When it comes to low-risk, high-return investments, fixed indexed annuities (FIA) are the most attractive option for retirees. In 2018, renowned economist professor Roger Ibbotson conducted research into the return history of inflation, U.S. Treasury bills, government bonds, FIAs, and stocks. Unsurprisingly, stocks offered the highest returns historically, but Ibbotson was surprised to find FIAs came in second, beating out bonds and conventional wisdom. Historically, these investments have produced great returns for individuals who are in retirement or who are about to retire. However, remember that everyone’s circumstances are different. Before making any changes to your portfolio, talk to your financial planner about your options.

As you age, it’s wise to make some changes in order to stay healthy, like your diet or your workout routine. Likewise, your portfolio should be adjusted to reduce risk and protect your financial health. After a bad turn in the market, it can take up to a decade to make your money back. If you want to retire in the next five years, then can you really afford that risk? Reducing your risk doesn’t necessarily mean missing out on high-return investments, though. Here are some low-risk, high-return investments to consider adding to your portfolio as you approach retirement. PEER-TO-PEER LENDING Otherwise known as P2P lending, this investment takes place online. Borrowers are matched with

investors for loans that benefit both parties — lending without the bank. Your risk and potential returns depend entirely on which loans you choose to invest in. The two most popular P2P lending platforms are Lending Club and Prosper, and you can start investing in either platform with as little as $25. REAL ESTATE INVESTMENT TRUSTS When you invest in real estate investment trusts (REIT), you’re investing in mortgages or direct equity positions in various properties. When the stock market is in decline, REITs are a good investment because they’re not corrected with stock exchanges. Plus, their yield is usually higher than the dividends investors get from stocks.


The Connection Between Coronavirus and Financial Transparency

As horrible as things are, though, a tiny silver lining to this crisis might exist. In my experience and from what I’ve been seeing in the media, the coronavirus just might change the way we talk about money from now on. Let me explain what I mean. Talking about money used to be taboo. No one talked about their salaries, their bonuses, or their savings, let alone their debts. Over the years, hundreds of clients have come to me with tax problems they’ve kept hidden from their family or friends because revealing them would mean talking about money. Often, this secrecy is a big problem because it keeps them from getting the help they need until things get bad. However, I think that taboo is lifting now simply because so many people are in the same boat. In March, a survey by The Ascent found that 60% of Americans were worried about money, and I bet that number has only climbed in the last few months. Money problems and fears have become a thing we have in common as a nation, and that

has opened people up to more conversations about their hours, salaries, mortgages, and debts, including the ones to the IRS. The fact that so many Americans are struggling is more than a bit scary, but I think this new level of transparency is a good thing, and I hope it outlives the crisis. If we stay open about our money issues, we can share tips and help each other solve our problems. When you check in with your loved ones this month, I’d encourage you to use this new transparency to help them. Ask how they’re doing financially and what their worries are. I bet they’ll open up! If they do, and you find out they have a tax problem, please share my contact information. I can help them resolve their debt and give them some much- needed peace of mind in these tough times.

You don’t need me to tell you the coronavirus pandemic has hit our economy hard. Nationally and right here in Wisconsin, things are more than a little bit nuts. I still remember reading in The New York Times a few months ago that more than 26 million Americans had lost their jobs, and how it hit me like a punch in the gut.



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