As part of your 2020 planning, now is the time to review funding your retirement accounts.
By establishing your contribution goals at the beginning of each year, the financial impact of saving for your future should be more manageable. Here are annual contribution limits:
Retirement Plans
2019
2020
Change
Age 50 or older catch up
IRA: Traditional
$6,000
$6,000
none
add: $1,000
IRA: Roth
$6,000
$6,000
none
add: $1,000
IRA: SIMPLE
$13,000
$13,500
+$500
add: $3,000
401(k), 403(b), 457 plans
$19,000
$19,500
+$500
add: $6,500
Take action
If you have not already done so, please consider:
Reviewing and adjusting your periodic contributions to your retirement savings accounts to take full advantage of the tax advantaged limits
Setting up new accounts for a spouse or dependent(s)
Using this time to review the status of your retirement plan
Reviewing contributions to other tax-advantaged plans including flexible spending accounts and health savings accounts
Extraordinarily low interest rates and a rapidly evolving business climate has made inventory management a lost art. Other business initiatives may seem to be more urgent and impactful, but in reality, mastering inventory levels is a key to most successful and growing businesses. Here are reasons why prioritizing your inventory management is a must:
Less shrink. Shrinkage represents cash that goes to waste because inventory is damaged or past sell date. It is a sign of a weakness in the inventory control process. Adding quality control practices that account for climate control and other factors can help avoid damaging valuable stock and catch defective purchases before they make it into your warehouse. Tightening up your inventory controls equals less stuff to throw away which means less money wasted.Action: Create a shrink scorecard. Note all product that is non-saleable, and track units tossed, their dollar value, and who supplied it. Compare waste to prior year and against your goals.
More cash. In a perfect world, you receive your inventory as soon as it is sold. Material or product that sits in the warehouse adds storage costs and risks turning into unsaleable product. Aligning your inventory operation with your sales cycle plays directly with improving your cash flow. Understanding sales trends will allow you to optimize your stock levels and save money in the process. When you spend less on unnecessary inventory costs you have more cash to invest into marketing, new product initiatives or capital equipment that can bolster your bottom line.Action: Implement just in time (JIT) with key suppliers. Explore ways to deliver product when you need it versus purchasing a larger amount and then storing it.
Improved forecasting. The old saying garbage in, garbage out applies perfectly when trying to forecast inventory demand. If you can’t trust your inventory process, it’s impossible to accurately predict future output. This leaves you flying blind when budgeting and preparing for future expenditures. With a firm grip on your inventory needs and procurement-to-sales cycle, your forecasting will become more accurate.Action: Create a rolling 12-month forecast of sales. The forecast should provide details on major product lines. Translate this forecast into lead times for your inventory procurement.
Better customer relations. Once you’ve optimized your operation, the quality of your customers’ experience increases exponentially. You can cut prices without sacrificing margin, improve lead times, and add new product lines with your extra cash. While the effective inventory process you built is humming along, you can focus your attention on improving your products to better match the needs of your target market. This will help boost your sales!Action: Set inventory targets to shorten lead times. Measure how many back orders you have and note how often products are returned as defective. If your inventory management is improving you should see positive results in both areas.
Inventory management will not take care of itself. Giving your inventory system the attention, it deserves will pay major dividends both now and in the future.
Washington – Following President Donald J. Trump’s
emergency declaration pursuant to the Stafford Act, the U.S. Treasury
Department and Internal Revenue Service (IRS) today issued guidance allowing
all individual and other non-corporate tax filers to defer up to $1 million of
federal income tax (including self-employment tax) payments due on April 15,
2020, until July 15, 2020, without penalties or interest. The guidance
also allows corporate taxpayers a similar deferment of up to $10 million of
federal income tax payments that would be due on April 15, 2020, until July 15,
2020, without penalties or interest. This guidance does not change
the April 15 filing deadline.
“Americans should file
their tax returns by April 15 because many will receive a refund. Those
filing will be able to take advantage of their refunds sooner,” said Treasury
Secretary Steven T. Mnuchin. “This deferment allows those who owe a
payment to the IRS to defer the payment until July 15 without interest or
penalties. Treasury and IRS are ensuring that hardworking Americans and
businesses have additional liquidity for the next several months.”
Today’s guidance will
result in about $300 billion of additional liquidity in the economy in the near
term. Treasury and IRS will issue additional guidance as needed and
continue working with Congress, on a bipartisan basis, on legislation to
provide further relief to the American people.
GA DOL Establishes Emergency Unemployment Claims
Process – Employers Must Take Action
The Georgia Department of Labor (GDOL) has adopted an emergency
Rule 300-2-4-0.5 Partial Claims, effective March 16, 2020. The rule
mandates all Georgia employers to file partial claims online on behalf of their
employees for any week during which an employee (full-time/part-time) works
less than full-time due to a partial or total company shutdown caused by the
COVID-19 public health emergency. Any employer found to be in violation of this
rule will be required to reimburse GDOL for the full amount of unemployment
insurance benefits paid to the employee. Download the How
Employers File Partial Claims Desk-Aid found on the GDOL Alert Page and
follow the step-by-step instructions.
Filing partial claims results in your employees
receiving unemployment insurance (UI) benefit payments faster, usually within
48 hours for claims filed electronically. Employees for whom you file a partial
claim are NOT required to report to a Georgia Department of Labor career
center, register for employment services, or look for other work.
Please continue to monitor the Georgia DOL website at gdol.ga.gov for any updates to these
guidelines.
Often if you are in dire need for money the most tempting area to look is your IRA, 401(k), and other qualified retirement accounts. These funds, set aside for your retirement, may seem to be the answer to your financial woes.
Should I take an early withdrawal?
Is it a good idea to tap into retirement account funds prior to reaching age 59½? Here are some things to consider:
The penalty. Retirement funds taken out for non-qualified use are not only subject to regular income tax, but are also subject to a 10% early withdrawal penalty.
Debt collectors love it. Debt collectors are commonly prohibited from access to your retirement accounts. So if you are using the funds to put off debt collectors, be aware that you may be using funds that might be protected if you became insolvent.
There is an opportunity cost. Currently the funds in your traditional IRA, 401(k), and similar retirement plans grow tax deferred. So a dollar today will compound until you withdraw the funds at retirement. This growth is lost with early withdrawals.
Not for your kids. It is usually not a good idea to use early withdrawals to help pay a child’s debt or school costs. There are better ways to help children financially than to pay the stiff penalty on your early withdrawal.
If you still need to make the early withdrawal
Withdraw “after-tax” contributions first. This can be Roth IRA contributions or other after-tax contributions. Why? Since these funds have already been taxed, there is often no additional tax burden or early withdrawal penalty.
Certain withdrawals from qualified plans are allowed. This includes hardship withdrawals for qualified medical expenses, qualified educational expenses, and up to $10,000 to purchase a first time home.
Consider taking out a loan from your employer-provided 401(k). You will then repay this loan to your retirement account with interest. But be careful, you are required to repay any outstanding balance when you leave your job.
Look into substantially equal payments. Look into taking the distributions as part of a series of substantially equal periodic payments over your life expectancy. If done right, this can help avoid the 10% early withdrawal penalty.
While it is never a great idea to tap into funds that are specifically set aside to make your retirement stress-free, if you must do so it is worth being thoughtful about how you go about the withdrawal.
