Meridian Blog

October is my favorite time to live in Virginia…I know we take our knocks when it comes to the weather, but October is the payoff for the crazy weather we have all year long..

I do love the shades of green in April and the springtime flowers of May, but October is when Virginia comes alive to me…the crisp fall air in the mornings, the beautiful rainbow of foliage, and fires on cool starry nights are my absolute favorites.

We love all the offerings of our area—the leaves, the pumpkin patches, the apple orchards…

It’s a busy time of year for sure!

At Meridian, fall kicks off a whole bunch of other traditions:

1. Tax planning—In October, we work with clients and their accountants to look at their current taxable events to date. We work in concert with our client’s accountants to uncover any tax efficient or tax savings strategies and get them implemented before year end.
2. Tax harvesting—in taxable portfolios at Meridian, we review the capital gains and losses for the year to determine if we can use them to our client’s advantage. For example, in 2020, many stocks still have significant losses for the year (we’re looking at you, energy stocks…).  If these funds/stocks are sold and replaced by another similar (but different) fund or stock, the loss will be realized and can be used to offset other gains or income.  And, the portfolio still maintains its desired exposure to the asset class, so there is no disruption to the overall investment strategy.
3. Required minimum distributions—while IRA owners who have reached age 72 must take a required amount out of their IRA annually, that requirement is waived due to COVID-19 relief legislation. That being said, it may make sense for some IRA owners to go ahead and take distributions this year to take advantage of low tax brackets.  While we are never certain where tax rates will be in the future, the general consensus is that they will be higher than they are today.  President Trump’s tax cuts expire in 2025, and the proposals discussed during the election campaigns have been higher as well…so general trend seems to be up.  For clients who have room in the 12% tax bracket for 2020, we are reviewing their tax situation to determine if it makes sense to take enough IRA income to take full advantage of that lower tax rate!
4. Review of portfolio objective and current positioning—while we are reviewing this all year long, we do a full review of the portfolio performance and current positioning as we close the year out. It is also a great time to confirm the portfolio strategy with clients, as their circumstances or preferences may have changed throughout the year.
5. Look forward into 2021 cash needs, gifting desires, and other desired distributions to make sure the portfolio is positioned correctly for the upcoming cash flow needs.

It is a lot to go over, but we love making sure our clients are well positioned heading into the new year.  But it sure makes fall crazy busy time, all around!

Happy Fall!!