This latest Otto & Associates Newsletter is being wrapped up on March 21, the day after Governor Cuomo closed all non-essential business offices in New York State because of the Covid-19 virus. At this point the experts seem to have little idea what’s ahead. Perhaps we will all look back on the contents of this Newsletter as an example of folks who fiddled while Rome burned. At O&A we are not certain even how we are going to get this Newsletter out, or whether we can get the paper needed to do so. Our traditional, grey paper is in the O&A office and it is likely that is not available to us. In any case…

The Newsletter covers a number of topics. Today we have no choice but to begin with an article on the coronavirus, how we are dealing with it at the office, and what long term effect it could have on investment portfolios. We continue with a description of a conference workshop attended by two of us, with a dynamic speaker who encouraged participants to challenge themselves to accomplish important but difficult goals for various areas of their lives. As a part of that article, we discuss the upcoming move of David and Mary.

Next, we introduce Dimensional Fund Advisors, a new family of mutual funds that O&A will begin using soon; an article on scams, targeting particularly older people; and the recently passed SECURE Act and how it will affect and potentially help various aspects of savings. The final articles include the total amount of money given to charity by O&A clients from TD Ameritrade accounts, and Office Matters, which includes a move of the Norwich Office. Happy Reading!

David W. Otto, Editor



Events have unfolded very quickly as it becomes apparent that the U.S. is frantically trying to get control of life in the face of the coronavirus. We write this on March 19 as our government strives to find equitable ways to inject huge amounts of money into our economy, both for individuals and businesses. They are also working to develop viable medicines and provide necessary equipment for patients. We hear predictions that the virus could change our way of living, including shuttering businesses for up to 18 months.

We also get encouragement that maybe we will get lucky because of the draconian measures we are taking, following the path of China, Japan, and Korea, where new cases are leveling off or diminishing. Of course, there is no guarantee that those three countries will continue on that path. We are in uncharted waters.

Because of the rapid changes, we encourage you to contact us with questions and concerns. At this time the five of us at O&A are mostly working in five locations. Joan has been in the Katonah office, David is in the Norwich office, and the other three are generally working from home. For now, this seems to be effective, although Joan will likely switch to working from home too, with the new order for non-essential businesses in NY State. We are happy to set up a telephone conference call with you at any time. It is easy for any of us to be on a call with you. During this time, we prefer more contact with our clients, not less.

As for the effect on investments, the decline in stock market prices has been very quick and dramatic. The Total U.S. stock market hit an all-time high a month ago and has lost close to 30% since that time. Where we go from here depends a great deal on how quickly we get some kind of predictable control of the virus. Deborah found a quote that states well our position: if your goals and your plan haven’t changed, “don’t touch your face or your portfolio.”

We hope you and your loved ones stay healthy and safe.



All of the Otto & Associates staff attended a three-day conference in Orlando at the end of January. Most multi-day financial planning conferences include motivational speakers, often featuring sports figures, or people from the military or government. Alex Sheen was different. Many of those who heard him left enraptured.

Sheen is the founder of “a social movement and nonprofit that is dedicated to the betterment of humanity through promises made and kept.” You may have heard him on one of several TED Talks he has done. He is an engaging speaker who doesn’t take himself too seriously, even though he speaks of vital matters. Likewise, he invites his listeners to be reflective and creative in responding to important matters, particularly by making and keeping promises.

Conference attendees entering the hall were all given a pack of small cards that said “because I said I would…”. Then we heard Alex’s engaging story about how he started this organization. His dad, who was diagnosed with small-cell lung cancer in 2011, initially responded very well to treatment but ultimately lost his battle with cancer.

This is how Alex described his father. “He was no war hero. He never wrote a book. He never ran marathons. He was a pharmacist. No recognition. No fame. But for everything that made my father ‘average’ and ‘an everyday guy’, there was one thing he did exceptionally well. He kept his promises. My father was a man of his word.”

As Alex prepared for his father’s funeral, he realized how exceptional this ordinary man was. He decided to try to honor that quality of his father. That determination was the beginning of the organization “because I said I would.” After Alex described his father, he invited conference attendees to write their own goal(s) on the card as reminders of promises they have made or wanted to make at that time. For more about the organization, you might want to explore his website: I tell you about Alex for two reasons. 1) To offer inspiration from the message of the “because I said I would” organization, and 2) to give a real-life example of your author (David) who, with his wife, Mary, had arrived at something of the same place as Alex – with a bit of a twist.

The planners at O&A regularly talk with our older clients about making preparations for aging. In addition to investments, retirement planning, and tax considerations, thought needs to be given to issues like living in a one-level dwelling, or where you will live if you need care. One good alternative we often mention is a Continuing Care Retirement Community (CCRC).

Last fall Mary and I decided to listen to this advice. Living in a big, old house with no first-floor bedroom and recognizing this would not be a good place in which to grow old, over several years we visited a number of retirement communities and put our names on the lists of three. We eventually decided on Wake Robin, in Shelburne, VT. We tentatively planned to move there in 2021. However, a cottage came available that seemed almost ideal for us, so we made the decision to move sooner. That duplex cottage is currently being renovated and repainted; we expect to make the move sometime in May. The Vermont location of the O&A office, which is now in an extension to our house, will move down the street three doors into an older home that decades ago was converted to a commercial building. We are most fortunate to have found a two-room suite with fireplaces in both rooms. The address is 289 Main Street. This will be the main office for Susan, and David will be in that office less frequently. However, he will also have a small office in the new Wake Robin cottage and be available through the office phone network.

So why do two 78-year old folks who are pretty healthy decide to move at this time? We certainly are ambivalent; we love our home and town and friends. But we think it is the smart thing to do. And also, we are doing it because we said we would. If you are interested, you can find the Wake Robin website at:



For the more than 28 years, O&A has worked to successfully address the various financial needs of clients. We help with wills and related estate documents, monitor and give opinions on income taxes, offer guidance on saving and thoughtful spending, help clients think through charitable donations, plan for retirement – the list goes on. We also spend significant time on investment matters. To that end we are creating a relationship with a mutual fund family that will be new to most clients.

The firm is Dimensional Fund Advisors, formerly known as simply DFA. What follows is a brief overview.

Dimensional is NOT a custodian. They will not take the place of TD Ameritrade, which means we will continue to buy Dimensional funds at TD, just as we have bought a host of different funds there in the past. Dimensional is a fund family, but one that has many offerings and strives to meet all, or most of the investment the needs of clients.

We will proceed slowly and do not intend to sell large numbers of funds owned by clients. However, we expect most clients will eventually have a significant number of Dimensional funds in their portfolio and may have the majority of their money invested in those funds.

In summary, we at O&A think it will work better to have one, over-arching perspective on investing, which Dimensional can provide. We will send a letter to clients explaining Dimensional more fully and commenting on why we are planning a move at this time, and what it will mean to clients. This entire process is, however, likely to be delayed because of the upheaval caused by Covid-19.



We like to think that most people are good, honest folks but sadly, not all are. Technology has made it easier for thieves to scam people. We at Otto & Associates want you to be aware and alert, so that if you get a call or email from a stranger saying that your grandson is in trouble, you’ll think twice before your emotions take over and you send money.

Of course, you want to help your grandson get out of jail for an auto accident in Maryland! Never mind that he lives in NY and doesn’t own a car. If the “lawyer” says that your grandson said not to tell his mother because he’s embarrassed, we hope you’ll call her first.

This common scam happened to one of our clients recently. It followed almost to the letter the typical script from the NYS Consumer Protection Office website:

“These scammers call or email seniors asking for money. They impersonate loved ones who are in some kind of trouble and need cash. Often, the calls are made in the middle of the night, so the adult answering the phone may be disoriented.

“These con artists seem credible because they have become sophisticated in finding and using personal information from social media and Internet searches. In some cases, the scammer impersonates a police officer, a lawyer, or a doctor who is calling on behalf of the relative in trouble. In all cases, the scammers request that money be sent immediately and usually through a wire transfer.”

Of course, the grandparent scam isn’t the only one. There are sweepstakes scams, funeral notification scams, IRS scams, and it didn’t take long for thieves to start coronavirus scams. One of the O&A staff received a call asking if the person had swollen or achy legs and feet, one of the supposed signs of Covid-19. The person who received the call hung up, but we can assume that an affirmative answer to the question of swollen feet would result in the offer of a miracle drug if the person would simply wire money.

So be on your guard when answering your phone and reading emails. Scammers can make phone calls look like a local call or a legitimate organization and they often create emails that look official. Never give personal information to a stranger. Legitimate organizations don’t ask for personal information by phone or email. And to help prevent identity theft, don’t click on links in your emails that seem at all strange.



On December 20, 2019, the SECURE Act was signed into law by President Trump. The full title, “Setting Every Community Up for Retirement Enhancement,” is aimed at preventing older Americans from out-living their assets. While most of the items in the law are related to retirement in one way or another, it is quite a mix of changes.

Because Americans are working longer, one of the new provisions pushes back the age at which taxpayers must begin taking the Required Minimum Distribution (RMD) from their Individual Retirement Accounts (IRAs). Prior to January 1, 2020, you needed to start taking your RMD the year you turned 70½. The age has now been increased to 72. In addition, anyone who has earned income can now contribute to an IRA, no matter how old the person is.

Another change is the elimination of the “stretch IRA” for many beneficiaries. Non-spouses who inherited IRAs used to have the benefit of stretching the IRA distributions over their lifetime. There is no change for those who inherited an IRA prior to December 31, 2019.

Now however, with a few exceptions, those who inherit an IRA of a decedent who died after Dec. 31, 2019, need to withdraw the entire amount within ten years of the original account owner’s death. This change will require careful and creative planning. Since there is no RMD, distributions from the inherited IRA can be taken in year(s) when anticipated income might be lower.

The generalization is that these changes are complicated and nuanced enough that, except for spouses, those who inherit IRAs should seek guidance from us on how and when to take withdrawals. The rules for a spousal inheritance have not changed; when a spouse inherits an IRA, it becomes part of that spouse’s own IRA so these changes do not apply.



Charitable giving is a high priority for many O&A clients. They give to organizations that feed the hungry; shelter the homeless; support the arts, religious organizations, farm to table groups, educational institutions, and more recently, help those who are losing their jobs because of Covid-19. Our clients have, in the last three years, given to charity directly from their TD Ameritrade accounts, on average, the total, remarkable figure of over $550,000 per year.

Charitable gifts are made in one of two ways. First, clients sometimes give appreciated securities from their individual or joint account. Giving appreciated securities allows the donor to take the full value of the security as a tax deduction and the capital gains tax that would normally be paid by the donor is forgiven by the IRS.

Second, for those who are over 70½, a donation may be made directly from an IRA, which accomplishes two things. The charity gets a gift, of course, but in addition the gift helps to satisfy the Required Minimum Distribution (RMD) for those who are over 72. (The government has recently raised the age for beginning the RMD to 72, but the charitable donation may still be made after age 70½. See the previous article on the SECURE Act for more information.)

As the impact of the Coronavirus spreads, clients may want to especially help others who are particularly affected financially because of the virus. Stay alert for organizations who will step in to meet critical needs. We are happy to help if you want to use one of your TD Ameritrade accounts to make vital charitable gifts at this unprecedented time.



This past November Charles Schwab & Co. announced their intention to purchase TD Ameritrade, a rather ironic move for long-time clients of O&A, since we used Schwab as our custodian until we moved all clients to TD Ameritrade in 2012. While the government still needs to approve this acquisition, we will likely be back at Schwab sometime in 2020. We have been told that many details need to be worked out, so at this point there are more questions than answers. Stay tuned.

Reference was made earlier in the Newsletter to the entire office staff going to a January TD Ameritrade conference in Orlando. We often went to separate events that had special interest, but we all thought it was a particularly good conference. Deborah also took the opportunity to reconnect with two old friends in Florida, and Joan met her husband there so the two of them could visit their daughter, Juliette, a junior at the University of Tampa. Kathy was able to spend the following week in southern Florida visiting family.

As for O&A’s use of Dimensional Funds in the near future, the staff has had innumerable conference calls with the Dimensional staff, and also a meeting with them in our office. A seminar at one of the Dimensional offices is still to come, when air travel is again recommended. We hope to achieve that goal before the summer vacation season.

One positive bit of fall-out from our current crisis is that mortgage rates have come down, and at this writing, the drop is significant. The rate for a 15-year mortgage is as low as 3.0%; 30-year loans are as low as 3.5%. Rates could go lower. Give us a call if you wish to discuss this.

As a reminder, O&A has a relatively new office phone system that seamlessly connects the Katonah and Norwich offices, as well as Susan’s home office. In the near future, David’s home office at Wake Robin will also be included. The long-time office numbers, (914) 232-5379 for Katonah and (802) 649-1946 for Norwich, ring at both offices and are also connected with the home office(s).