Employment Update & Medicare News!

So how are you feeling?  We’ve been at this pandemic issue for about 3 months!  So much has been reported, seen and experienced! Certainly the events over the last few days don’t add to our naturally optimistic view of the short & longer term future.

I wake up every day knowing that we are one day closer to Covid-19 being behind us!

I very much look forward to so much that has been suppressed.  I miss seeing my clients in the office.  Zoom and phone calls are ok; however I much prefer seeing everyone in-person.  I am very optimistic that day will be here!  The sooner, the better, baby!

Unemployment and the Economy

What’s next for the market and the economy?  NO ONE knows for sure!  The stock market, as I’ve been writing this morning, continues to move higher as Investors appear optimistic about a quick economic recovery leading to normalcy.  One of the obvious challenges is how quickly, and to what level do companies rehire employees?

If you’re a small business owner, you must ask yourself: what are my options for rehiring staff?

Several small businesses (certainly not all), have been able to secure short-term business loans through the Payroll Protection Program.  That loan is forgiven if 75% of the funds are used for Payroll purposes within 8 weeks of receipt.  If a business meets the rules, the loan payback is forgiven.  This is certainly an encouragement for businesses to rehire however where does their business stand after the 8 weeks?  Certainly much depends on the economic reopening process.

But hold on for a short moment…..  I believe Small Business Owners will greatly reassess their needs going forward, asking themselves:

  • Can we generate the desired revenue with less staff utilizing more technology?
  • How much bricks and mortar do we really need?

These answers will certainly have a significant impact on rehiring!

This Friday, we’ll hear the unemployment #’s for May.  Many are predicting the unemployment rate will increase from 14.7% in April to over 20%.  So far over 40 million people have filed for unemployment benefits, however last week continuing claims decreased to approximately 21 million.  This is an important weekly number to monitor going forward, for now.

Something else to keep in mind…. It’s been reported that 60% of people collecting unemployment benefits are netting more income than while working!!! Even though they’re apparently required to go back to work when called, many are electing to refuse to return.  I certainly don’t know why we would pay someone MORE for not working, period!

Market Update

Most of the major US Stock Market Indexes increased last week by approximately 3%.  International developed stock indexes up over 5%.

When I look at year to date performance comparing U.S. Growth, Value Stocks, then large to small companies, the performance differential is staggering.  Large, Mid-size growth stocks are in the positive for the year, with Large Growth leading way up over 5%!

Large Value stocks are down (15%) on average while Small Value stocks are down over (25%).

Noteworthy, over the last couple of weeks, value has been leading growth.  This is reflecting the re-opening of America.  Will this continue?  As always, time will tell.  It’s always a good idea to have a good mix between Growth and Value inside of your investment portfolio at all times!

Medicare “Special” Enrollment Update!

Typically when working past age 65, and you are covered by an employee group health insurance program with a company that employees over 20 employees, you do not need to enroll in Medicare until your group medical coverage terminates.  You and your employer then manually fill out a Part B application form that manually needs to be sent to Social Security, prior to completing all of your Medicare enrollments.  This slows down the enrollment process and I’ve had Social Security lose a couple of our client’s applications! This form proves you had continuous coverage from Age 65 up until current coverage termination.  This is why you do not receive a penalty for enrolling after Age 65.

Now, the Part B form can be done online via an electronic signature type of process.  I looked at the online application, and it appears to be a tremendous enhancement to the enrollment process.

For more information on Medicare, please feel free to call our office, and click here for our Medicare Guide for 2020.

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