With the end of 2020 just a few weeks away, we are already looking forward to a new year—and to a world very different from the one we’re leaving behind. Some areas of the economy have been damaged and may never fully recover, but other areas will adapt, reinvent, and help reinvigorate growth.
2021 is primed to deliver advances to further limit the impact of COVID-19, and the goal remains keeping the economy as open as possible while keeping people safe. Continued progress in the response to COVID-19, including further stimulus measures by the government, will be key to sustaining the economic recovery. As the pandemic subsides, restrictions are lifted, and consumers’ daily lives return to something close to normal, the pace of the recovery most likely will pick up speed—probably in the middle of 2021.
Another major milestone will be moving past the market uncertainty caused by presidential elections. Historically, the post-election environment has been positive for the stock market. S&P 500 Index returns have been strongest with a divided Congress—one party controlling the House of Representatives and the other party controlling the Senate. A split Congress with President-elect Joe Biden in the White House could be viewed as friendly to the markets.
Even with 2021 on the horizon, there are still a few things one can do this year to impact your financial life.
- Review withholdings and make any adjustments in the final pay period or any distributions, if retired.
- If still working, consider increasing your contributions to your retirement plan such as your 401(k).
- Consider charitable donations including any tax credits available to you.
- Review your credit report to check for errors as you are entitled to one free credit report each year.
Be sure to contact your CPA with specific questions as the above is not tax advice.
Have a great weekend.
Chris Zeches, CFP®