I’m participating on a panel at the end of the month on Best Ideas in Financial Planning for 2021. The audience is CPA financial planners, but I thought that you might also like to know what we’re thinking about. We’ve had a year to reflect and adapt to this pandemic environment. Hope is in sight and healing is what we need.

Where to Begin?

One of our staff asked me last week if there were any changes to our agenda for client annual reviews this year. YES! was my response. I want to start every meeting with A Year of Reflection. Every one of us has a story to tell about how the last year has affected us. Our goals may have changed. Our preference for risk or need for emergency funds may be viewed through a slightly different lens. We need to take a minute and just talk human being-to-human being.

When asked about my three top takeaways from 2020, my response was:

  1. Impermanence: Everything can change in an instant. Are we as prepared as we can be? We need to stay flexible.
  2. Adaptability: Be ready to change the agenda when circumstances warrant it. Don’t overcomplicate things in a confusing time.
  3. Hope: Accept where we are in present time, but keep our sights looking forward to remain optimistic.

I also make it a point to talk about What’s Going on in the World? at the beginning of every meeting. I want to know what you think. I want to share what we’ve observed. Our conversation promotes partnership, perhaps some healing, possibly even hope. Or if not, an understanding of what’s keeping you up at night.

And in this new tech-accelerated world, I want to know how we can make communication better. Not everybody wants to get their meeting materials through a portal. Would secure email or another avenue be easier? Not everyone is a pro with Zoom. Can we set up a pre-meeting with one of our staff to help walk you through the mechanics of a video meeting? Or if it’s better for you, our client, to just have a phone call, that’s perfectly fine! We are here to serve. Not insist.

High Level Overview

One of the reasons I love starting most annual review meetings with a Mind Map is that this conversation starts with revisiting goals. What has been accomplished in the past year? This year I want to talk about how COVID may have affected how we prioritize goals for the future. Many retirees’ #1 goal in retirement was travel. Has that changed? Been delayed? Now include extended family? Do you want to work toward owning a family compound where everyone can gather “safely”?

A high-level overview of goals, income, savings, spending, giving, relationships, estate flow, insurance needs, college funding, interests, values, tax, and retirement issues serves to remind us why we have gathered. What pops out as needing attention? What can you pat yourself on the back for accomplishing? Goals change over a lifetime. As your trusted sounding board, we can help spur ideas for what might be next. And this is not necessarily about money. More likely it’s about meaning.

A net worth statement update is another one of my “go-to” diagnostics. It’s a snapshot in time of where we stand with what we own and what we owe. A quick look can tell us if there are red flags that need addressing. A comparison with last year gives us a sense of how we are moving forward (or not). A net worth statement can also give us clues about estate planning. With possible tax law changes ahead of us, what if anything needs to be reviewed? Just for fun, compare this year’s net worth statement to the very first one you ever did. What does that tell you?


2020 was a wild year in the markets. Both for stock and bond markets. We saw the stock market drop 34% in March and then spring back up in subsequent months. I heard one economist describe it as “falling off a cliff on to a trampoline. But we still fell off a cliff.” A bear and a bull cycle all wrapped up in a few months?? Hmmm.

And bond rates are close to zero. If you listen to the Fed, that’s likely to continue for years. That has implications for where you want to be with the duration of your bond holdings. But it can be dangerous to make assumptions about what you think is going to happen because you never can be sure, can you? Even so, you can make intelligent decisions based on evidence and your understanding of the markets.

Some people want to sit on more cash because they are frozen with fear. Maybe they are melting now, but they still are reluctant to commit in such an unstable time. It’s good to think about how much you want to hold in very liquid investments. You want to have a solid emergency fund. The pandemic may have changed your thinking about how many months of expenses you want to hold.

Or it may be time to talk about your asset allocation–your mix of stocks and bonds. Did you change anything during the market drop? Literally, 2020 is hindsight, but with such a quick recovery, you may find your emotions weren’t a particularly good indication of what was the best course of action. The goal is to find a mix that you can stick with in all types of markets and still sleep at night.

Another insight was tax loss harvesting in times of chaos. Taking some losses when the market was down helped to cushion the large gains that we saw some mutual funds take toward year-end. We tend to see some periods of market volatility every year, so we will probably be able to do that again at some point.

When we think about market factors, like the value style or small-cap stocks, do we need to revisit how we allocate in sub-asset classes? We saw the start of an upswing in both value and small-cap stocks starting in October. Sometimes the investment climate coming out of a recession can be conducive for these styles. Or perhaps you see a weaker U.S. dollar and want to revisit how much your allocation is to international stocks. Could there be a currency rate advantage? Or with a Biden administration, should you continue adding to securities that invest in sustainability? Your advisor can help you think through these and other issues.

Ultimately, focus on what you can control: keeping costs low, watching what you spend, finding the right asset allocation for your risk tolerance and capacity, preparing how you will handle healthcare issues and, in general, how you want to prepare for the unexpected.


Required minimum distributions are back this year. So you need to think about when and how you are going to take those. Or perhaps you want to donate part of that payment to charity. You can give up to $100,000 from a retirement account to a charity (not a Donor Advised Fund) and not pay tax on that portion. That may keep Medicare premiums lower or reduce tax on Social Security benefits.

Medical deductions are now back to 7.5% of Adjusted Gross Income (AGI). That means more of you may be able to deduct those costs. And 2020 may have seen higher medical costs for millions of people.

Standard deductions are still relatively high: $12,550 for singles, $25,100 for married filing jointly. If you want to be able to deduct charitable donations, you can use the $300 allowance for singles, $600 for married couples. Or you can “bunch” deductions and take more in alternate years so that your deductions add up to more than the standard deduction.

If you want a “cheat sheet” on 2021 tax rates, click here. This only covers Single, Household and Married Filing Jointly marginal brackets, but that’s what I tend to use most on a day-to-day basis.

Part of Joe Biden’s platform was to raise both corporate and individual tax rates. But with such a closely divided House and Senate, we may see compromise on how quickly or how far those rates will change. Corporate tax rates are likely to see changes first and may be wrapped into an infrastructure bill that has bipartisan support.

2021 is likely to be a year of healing, so possibly the first legislative initiatives will focus on stimulus, fighting COVID, getting people back to work and making sure health care is there so we can put this pandemic behind us. That will take time, but there is hope with the amazing advances in medical solutions.

Estate Planning

If you’ve been procrastinating about getting estate documents in place, perhaps this past year has helped you move this to the front of the list. While COVID is most deadly in the over age 65 population, we’ve all seen it hit people of all ages. Protecting your family with an up-to-date will, powers of attorney and perhaps some life and/or disability insurance are key. Hopefully if we vaccinate older people in the first waves of available shots, we can make a huge dent in the mortality rate of this deadly disease.

Unfortunately, many of you will know someone who has died from COVID. Sometimes it wasn’t the initial diagnosis, but they caught it while seeking medical treatment. In those situations, someone had to step into the role of executor or trustee or guardian. Do you know who would play those roles in your situation? Are there issues you should discuss like your preference if you need a ventilator? Your healthcare power of attorney (POA) may say not to use artificial means to keep you alive. Talk to the agent named in your POA so they are clear on what you want.

If you have a Donor Advised Fund (DAF), do you remember who your successors are? Did you list people who would step in and do they know the types of charitable causes you would support now? Or did you list ultimate charitable beneficiaries? In light of COVID, would anything change now?

Many times family members are not prepared for the roles we’ve placed them in. A family meeting may be appropriate as you help them understand what each of these roles entails. If you are not ready to share the dollars involved, you can go over the flow of the assets and the different types of entities that are involved. This can help promote confidence and security in what may lie ahead and how everyone needs to help.

Even if you have your estate documents up-to-date, you may still need to tell your family where to find everything.
Click here for a worksheet you can use to write that down »


My brother’s first full year of retirement was 2020. You can bet it didn’t look anything like he thought it would. He and his wife did some local travel. They hiked in the forest preserves. They got some home repairs done. They stayed in touch by Zoom with book club, family and friends. But Thanksgiving and Christmas were cancelled. To say my 88-year-old mom was disappointed would be a colossal understatement.

Being grounded has its good and bad aspects. To state the obvious, for the over age 65 crowd, staying alive was Job #1. And we probably all know people who lost that battle in the past year. Trying to be more positive, focusing on what needs attention at home brought insights, awareness and a realization we can be happy living with less.

But watch out for a surge in travel and leisure in the second half of 2021 (or whenever we finally get COVID under control). Wanderlust is just waiting for the right moment. Some clients are telling me they are dreaming of where they want to go and the experiences they want to share with each other and their loved ones. It’s just a matter of time. Something we are more aware may be in shorter supply.

So if you have thought about changes to the original plan for retirement, it might be a good year to revisit your retirement projection. Test out the new ideas on paper before you fully commit. Periodically it’s a good idea to check the assumptions underlying the projection too: rates of inflation and investment returns, required retirement distributions, possible Roth IRA conversions, or anything affecting the sequence of withdrawals from different asset pools.

The SECURE Act ended the stretch-out for IRAs. So everything has to be out in ten years now after you die unless a spouse inherits (with some exceptions). If you have a charitable intent, you might try using a Charitable Remainder Trust as a way of stretching out payments to family for more than ten years.

Continuing Care Retirement Communities (CCRCs) have been a popular solution for the changing needs of care in retirement. But we’ve also seen nursing homes get hit hard with COVID. That’s caused some people to rethink how they want to approach healthcare needs in retirement. It’s a major concern for many retirees, so it will have significant implications for all of us as we think about keeping seniors safe.

Best Ideas

At the end of our panel, we were all asked what our best advice would be as we start 2021. Here’s what I thought:

  1. Focus on relationships. It might take a little more effort when you’re still functioning in a socially distant world, but people are what make life so worthwhile. Family, friends, colleagues, clients, community. Think about the important relationships in your life and reach out to them.
  2. Look for opportunities. In any kind of chaos is opportunity. But it’s sometimes hard to spot. We’ve had plenty of chaos, so I’m looking forward to LOTS of opportunities in the days ahead.
  3. Amplify hope. Offer positive support (but not false hope) until we can see more clearly. Look for the helpers.

Well, as I said at the beginning of this, as a planning profession, we’re sharing ideas with each other for what we can do to best be of service to our client community. It’s a constantly changing world we live in, so communication is paramount. Our best ideas will be filled with hope, inspiration and healing this year. The best way to change the world for the better is to do what little you can with what you have each day with whomever you meet.

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