A Blank Slate Media Special Section • September 18, 2020
28 Blank Slate Media Newspapers, Friday, September 18, 2020
How COVID-19 may affect your bond portfolio Many retirees position Municipal Bonds as a form of income and balance to their overall portfolio. Historically, muni bonds have experienced a very low default rate. In fact, over the past 100 years, there has been one state that went bankrupt, Arkansas. This was in 1933, which occurred during the Great Depression. Today is very similar to 1933, our debt to GDP is greater than 1933, the US is running a $3trillion dollar deficit and the Federal Reserve is printing money to try and reflate the economy. In the middle of all of this, states and cities across the nation are struggling financially due to the cost of COVID-19. Many states and cities had issues even prior to COVID. COVID, however, hits municipalities from several directions. Real estate delinquencies rise and sales tax revenue falls. Toll road and mass transit revenue also decline significantly. Meanwhile, the governmental cost of dealing with COVID is rising. Without some help from the Federal government, those municipalities that were already running deficits and/or had large
debt burdens can find themselves in more dire financial straits fairly quickly. Those managed more conservatively may not have similar problems right away, and can last longer, but ultimately will confront the same fate despite those conservative fiscal policies without help or an economic rebound. The size of a bail-out for state and local governments is a major sticking point to cutting a deal between the Democrats and the Republicans. Here is where the differences lie: The Democratic proposal (HEROES Act) includes about 1$ trillion to bail out strapped state and local governments burdened with COVID expenses and significant declines in revenue.The Republicans are of the opinion that $1 trillion is far more than is needed to offset COVID costs and lost revenue. The issue here is that Republicans are determined to prevent COVID relief from being used to solve existing funding problems that have nothing to do with COVID, such as structural deficits and underfunded pensions. Republicans are currently offer-
ing no new funding for state and local government but would expand the existing CRF (Coronavirus Relief Fund) availability for local governments through fiscal 2021. However, these funds cannot be used for replenishment of rainy-day funds or state pensions. Reality likely lies somewhere in between. Our municipal market contacts indicate that any package in the $300 to $500 billion range would be well received by the market. In addition, Moody’s, a major bond rating agency, says: “Under baseline economic assumptions, we project that Congress and the White House will need to enact approximately $500 billion in additional flexible aid to states and local governments over the next two fiscal years to avoid major damage to the economy.”[1] In speaking to many large municipal bond money managers, they all seem to have the same tone; “Default will never happen”. A lot has occurred financially over the past twenty years that many said would never happen, and it did happen. We are certainly not suggesting to outright sell your municipal bonds, but it is extremely
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important to take the time to understand and assess what you own and the role it plays in your overall financial plan and portfolio. While we do not expect widespread defaults, we do expect the recent volatility in municipal bonds to continue until the issue of state and municipal funding improves. Evaluate with your advisor if there is a risk of default on each bond you own if a stimulus deal is or is not passed. An additional step might be to consider diversifying your portfolio amongst some of the more financially healthy states versus being concentrated in one single state. While you may lose the triple tax-exempt status on some bonds within your home state, protecting the principal from extreme volatility through diversifying the portfolio would be more important. If you have a passive and/ or laddered strategy that you or a broker have been managing, where you just “set-it and forgot it”, you may want to take a more active approach going forward. We are advising clients to work with us in conjunction with professional municipal bond
managers that oversee the credit and interest rate risk simultaneously. At the same time, we are updating our due diligence on these managers. In any event, we suggest reviewing your municipal holdings through your advisor to ensure that your retirement savings is protected over the longterm. Palumbo Wealth Management (PWM) is a registered investment advisor. Advisory services are only offered to clients or prospective clients where PWM and its representatives are properly licensed or exempt from licensure. For additional information, please visit our website at www.palumbowm.com The information provided is for educational and informational purposes only and does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor’s particular investment objectives, strategies, tax status or investment horizon. You should consult your attorney or tax advisor [1] Moody’s Analytics published June 25, 2020
ADVERTORIAL
Ask the Funeral Director… By Joseph Velotti, Funeral Director Roslyn Heights Funeral Home
Preplanning a funeral is undoubtedly one of the biggest and most important decisions you will make in your lifetime. Whether it is for you or a loved one, the first step is obtaining all the necessary information to make an informed decision. More and more people are choosing to preplan/prepay their funeral and burial expenses. In doing so, they recognize that it is smart financial planning and provides great emotional relief for themselves and their loved ones. Prepaying your funeral will allow you to make your own funeral plans, but, more importantly, preplanning will spare surviving relatives and loved ones from the emotional burden of having to make decisions at a time of great stress and grief. The most common questions people ask when they are considering preplanning their funeral arrangements are:
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#1. Why Pre Plan at all? • Allows individuals the opportunity to make personal and specific selections for the funeral service that most closely meets their needs. • Spares loved ones from having to second-guess the wishes of the deceased at the time of need. • Allows for time to research funeral homes, burial options, and financial considerations; • Provides an option to set aside funds for final expenses, relieving family members of an unexpected financial burden. #2. Why Pre Pay for my arrangements? • Placing the cost of the funeral (at today's prices) in an investment vehicle, so that the interest earned will keep pace with inflation to cover the cost of the funeral (at future prices) when the death occurs. • Prevents life insurance policies from being depleted at the time of a loved one's death. • Allows individuals to consider options while they are better prepared to make sound, fiscally responsible decisions. • Spares loved ones the unexpected cost of a funeral during a stressful time. Roslyn Heights Funeral Home offers price guaranteed pre-arrangement thru PREPLAN a funeral trust pre-funding program backed by the NYS Funeral Directors Association, Inc. call 516-621-4545 for more information.
75 Mineola Avenue Roslyn Heights, NY 11577 516-621-4545 Visit Us At: www.RoslynHeightsFH.com Conveniently Located 5 Blocks North of LIE Exit 37 Willis Ave.
75 Mineola Avenue, Roslyn Heights, NY 11577 • 516-621-4545
Blank Slate Media Newspapers, Friday, September 18, 2020
Did you know?
T
hose poised to begin a health regimen that includes probiotics would be wise to also educate themselves about the closely named, yet vastly different, “prebiotics” that are also beneficial to health. Prebiotics are to probiotics what fertilizer is to a vegetable garden. Prebiotics are essentially a special type of soluble fiber that is used by the beneficial bacteria as fuel, advises the prebiotic supplement company Prebiotin. Examples of good sources of prebiotics include bananas, onions, garlic, Jerusalem artichokes, apple skins, beans, and chicory root. The prebiotic fiber moves through the small intestine undigested and fermented until it reaches the large intestine. Once there, beneficial bacteria break it down and use it as food. Thusly, the prebiotics can then multiply readily and improve the balance of good and bad bacteria in the gut. Eating prebiotic foods can fuel the process, but many probiotic supplements now have a combination formula that includes prebiotics in the recipe.
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30 Blank Slate Media Newspapers, Friday, September 18, 2020
Senior perks and discounts
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Lovely & Quaint Grounds Open Daily Open To All Faiths Headstone, Flat Marker & Cremation Grave Sites and New Mausoleum Payment Options Available For Pre-Need
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rowing older may come with some added laugh lines or a few extra aches and pains, but many will attest to the benefits and wisdom earned from a life welllived. And if that’s not enough, the discounts and other perks afforded seniors can make reaching one’s golden years a bit easier to embrace. Every day the list of companies offering special deals for people of a certain age continues to grow. Individuals willing to do the research or simply ask retailers and other businesses about their senior discount policies can be well on their way to saving serious money.
Keep in mind that the starting points for age-based discounts vary, with some offering deals to those age 50 and up, and others kicking in at 55 or 60-plus. The following is a list of some of the discounts that may be available. Confirm eligibility as companies change their policies from time to time. Also, the editors of Consumer World say that the senior discount might not always be the lowest price, so comparison shopping is a must to find out which discount or coupon is the best deal. Amtrak: Travelers age 65 and older can enjoy a 10 percent discount on rail fares on most Amtrak trains. For those who prefer ground travel but want to leave the car at home, this can be a great way to get around. Fast-food/sit-down restaurants: Establishments like Wendy’s, Arby’s, Burker King, Denny’s, Applebees, Carrabba’s Italian Grill, and Friendly’s offer various senior discounts. Most are 10 to 15 percent off the meal. Others offer free beverages or an extra perk with purchase. Kohl’s: This popular department store provides a 15 percent discount
every Wednesday to shoppers ages 60-plus. Other stores like Modell’s, Belk, Bon-Ton, and SteinMart offer similar discounts. Marriott: Travelers age 62 and older are privy to a 15-percent discount on room rates at Marriott brand hotels, subject to availability. Roto-Rooter: Plumbing problems can get expensive, but online sources cite a 10 to 15 percent discount depending on location for this drain cleaning service provider in North America. National Parks: The U.S. National Parks Service offers steep discounts on the annual pass, which provides entry to more than 2,000 federal recreation sites. Grocery store: Food shopping gets a little easier with discounts at Bi-Lo, Fred Meyer, Gristedes, Harris Teeter, Piggly-Wiggly, and Publix. Be sure to check with local supermarkets about senior discounts, as they vary, particularly as to what day of the week and for what age they kick in. AARP membership: It is important to note that many companies require enrollment in AARP for people to get senior discounts. AARP also has its own AARP Prescription Discount Card so that members and families can save around 61 percent on FDAapproved drugs that prescription insurance or Medicare Part D plans fail to cover. T-Mobile: This carrier offers two lines with unlimited talk, text and LTE data for $35 with AutoPay for seniors age 55-plus. Only the primary account holder has to be 55. With a little digging, seniors can find scores of discounts to help them save money while enjoying their golden years.