A properly diversified portfolio should contain a healthy array of different types of investments. One of these investments may be tax-exempt bonds.

What are tax-exempt bonds?
Tax-exempt bonds are municipal bonds. In finance slang, they are commonly referred to as “munis” or “muni bonds”. Municipal bonds are issued by states, counties, municipalities, hospitals, schools, airports, and so on. When you buy these bonds, you are effectively lending money to these government or nonprofit entities. Typical uses for these funds includes construction and maintenance of infrastructure like buildings, bridges, roads, water, sewer, power, etc.

Heartland Trust Company turned 30 this year, and we’ve accumulated a bit of history. Each quarterly newsletter this year will have a feature on one of our old locations.
After about five years in the Lightowler Johnson space, the ever-expanding company was in need of more space once again. HTC found that space a couple of blocks away – the top floor at 120 South Eighth Street. The first floor was home to the Neuropsychiatric Research Institute (NRI).

Adapted from Broadridge Communication Services

You know how important it is to plan for your retirement, but where do you begin? One of your first steps should be to estimate how much income you’ll need to fund your retirement. That’s not as easy as it sounds, because retirement planning is not an exact science. Every situation is different, and your specific needs depend on your goals and many other factors.

The Markets

Stocks rebounded from a dismal March by posting their best monthly returns since 1987, as investors were encouraged by the expectation of additional government stimulus programs and hope that the economy would be reopening soon. The Paycheck Protection Program and Health Care Enhancement Act provided funding for additional small business loans, and offered financial support to hospitals, while increasing the availability of more virus testing. The Federal Reserve added trillions of dollars in funds to its lending programs. A few states began easing lockdown restrictions and reopening a range of businesses. While there were plenty of ups and downs in the market during the month, April closed with each of the benchmark indexes listed here climbing notably higher. The Nasdaq gained 15.45%, followed by the Russell 2000, the S&P 500, and the Dow.

There are many great quotes out there that are relevant right now, but it’s a lyric from Bob Dylan’s song, Brownsville Girl (a B-side track from the 80’s) that is in my mind: “Strange how people who suffer together have stronger connections than people who are most content.”

Yes, the times they are a-changin’ in many different ways, and it is easy to feel alone or isolated as we all do our part to slow the spread of COVID-19. But remember . . . our families, businesses, communities, states, and countries are all in this together. We have all been forced to look at things from a different angle. Ultimately, it is making us stronger and pushing us forward so that we can be more resilient in the future. 

Adapted from Broadridge Investor Communication Solutions

The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27, 2020. This $2 trillion emergency relief package represents a bipartisan effort to assist both individuals and businesses in the ongoing coronavirus pandemic and accompanying economic crisis. The CARES Act provisions for retirement plan relief for individuals under federal tax law are discussed here.

For those seeking access to their retirement funds, these include special provisions for coronavirus-related distributions and loans. For those seeking to preserve their retirement funds, certain required minimum distributions from retirement funds have been suspended.

Coronavirus-related distributions

A 10% penalty tax generally applies to distributions from an employer retirement plan or individual retirement account (IRA) before age 59½ unless an exception applies. Due to the coronavirus pandemic, the penalty tax will not apply to up to $100,000 of coronavirus-related distributions to an individual during 2020. Additionally, income resulting from a coronavirus-related distribution is spread over a three-year period for tax purposes unless an individual elects otherwise. Coronavirus-related distributions can also be paid back to an eligible retirement plan within three years of the day after the distribution was received.

While everybody needs to plan for retirement, women often face special challenges when planning for this time of life. 

For one, their careers are more likely to be interrupted to care for children or elderly parents. Even if women stay in the workforce fulltime, they tend to earn less than men, on average. As a result, their retirement plan balances are often lower. 

In addition to earning less, women generally live longer than men. This means having to stretch potentially limited retirement savings and benefits over many years.

Don’t dismay. Here are a few tips to help yourself or the women in your life manage these challenging financial realities. 

Participate In Retirement Planning. 

You may be balancing so many responsibilities that you haven’t given retirement planning much thought. Or maybe you’d rather let your spouse take on these duties. That’s understandable, but it’s critical for women to take an active role in planning for retirement. Married or not, make sure you are well-informed and are able to make financial decisions that benefit you. 

Adapted from Broadridge Investor Communication Solutions

It’s generally a good idea to review your employer-sponsored retirement savings plan at least once each year and when major life changes occur. If you haven’t given your plan a thorough review within the last 12 months, now may be a good time to do so.

Have you experienced any life changes?

Since your last retirement plan review, have you experienced any major life changes?

For example, did you get married or divorced, buy or sell a house, have a baby, or send a child to college? Perhaps you or your spouse changed jobs, received a promotion, or left the workforce entirely. Has someone in your family experienced a change in health? Or maybe you inherited a sum of money that has had a material impact on your net worth. Any of these situations can affect both your current and future financial situation and should be considered as you review your retirement savings needs.

In addition, your annual review is a good time to examine the beneficiary designations on your plan account to make sure they reflect your current wishes. This is particularly true if your marital situation has changed. With most employer-sponsored plans, your spouse is automatically your plan beneficiary unless he or she waives that right in writing.

Say, for example, you remarried and you would like your children to remain as primary beneficiaries on your retirement plan. In that case, your spouse would need to waive his or her right to the assets in writing.

HTC Team News 

• Missy Zarak has been promoted to the position of Trust Officer. Congratulations, Missy!
• Heather Jung joined Heartland Trust Company as a Retirement Services Administrative Associate. She brings over 13 years of experience assisting plan sponsors, financial advisors, and third party administrators with retirement plans.

• Shara Fischer, Relationship Manager, obtained her Chartered Retirement Planning Counselor (CRPC) designation. Professionals with this designation concentrate on retirement planning by focusing on client-centered, problem-solving. Congratulations, Shara! 
• The HTC team has opened numerous “satellite offices” since March. These offices include our employees’ kitchens, home offices, living rooms, and spare bedrooms. Here’s a glimpse of how we are working from home to reduce the spread of COVID-19.